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Money is an Experience Good: Competition and Trust in the Private Provision of Money

Marimon, Ramon; Nicolini, Juan Pablo; Teles, Pedro - C.E.P.R. Discussion Papers - 2009

We study the interplay between competition and trust as efficiency-enhancing mechanims in the private provision of money. With commitment, trust is automatically achieved and competition ensures efficiency. Without commitment, competition plays no role. Trust does play a role but requires a...

Persistent link: https://www.econbiz.de/10004976784

Pricing and Trust

Huck, Steffen; Ruchala, Gabriele K.; Tyran, Jean-Robert - C.E.P.R. Discussion Papers - 2007

We experimentally examine the effects of flexible and fixed prices in markets for experience goods in which demand is driven by trust. With flexible prices, we observe low prices and high quality in competitive (oligopolistic) markets, and high prices coupled with low quality in non-competitive...

Persistent link: https://www.econbiz.de/10005792278

Competition Fosters Trust

Huck, Steffen; Ruchala, Gabriele K.; Tyran, Jean-Robert - C.E.P.R. Discussion Papers - 2006

We study the effects of reputation and competition in a stylized market for experience goods. If interaction is anonymous, such markets perform poorly: sellers are not trustworthy, and buyers do not trust sellers. If sellers are identifiable and can, hence, build a reputation, efficiency...

Persistent link: https://www.econbiz.de/10005136615

Selling to Consumers with Endogenous Types

Boone, Jan; Shapiro, Joel - C.E.P.R. Discussion Papers - 2006

For many goods (such as experience goods or addictive goods), consumers' preferences may change over time. In this paper, we examine a monopolist's optimal pricing schedule when current consumption can affect a consumer's valuation in the future and valuations are unobservable. We assume that...

Persistent link: https://www.econbiz.de/10005497874

Direct and Indirect Network Effects are Equivalent: A Comment on “Direct and Indirect Network Effects: Are They Equivalent?”

Church, Jeffrey; Gandal, Neil - C.E.P.R. Discussion Papers - 2012

do not, in the case of indirect network effects, make standardization more likely, but (ii) indirect network effects are … associated with excessive standardization. We show in Clements’ framework that neither of these results are correct …: standardization is more likely as the number of software firms increases and when the type of market equilibrium is unique— there are …

Persistent link: https://www.econbiz.de/10011084429

Legal Evolution, Contract Evolution, and Standardization

Gennaioli, Nicola; Perotti, Enrico C; Ponzetto, Giacomo AM - C.E.P.R. Discussion Papers - 2014

law matures. Contract standardization avoids this cost, statically improving enforcement; but it crowds out innovative …

Persistent link: https://www.econbiz.de/10011084669

The Rules of Standard Setting Organizations: An Empirical Analysis

Chiao, Benjamin; Lerner, Josh; Tirole, Jean - C.E.P.R. Discussion Papers - 2007

This paper empirically explores standard-setting organizations’ policy choices. Consistent with Lerner-Tirole (2006), we find (a) a negative relationship between the extent to which an SSO is oriented to technology sponsors and the concession level required of sponsors and (b) a positive...

Persistent link: https://www.econbiz.de/10005792070

Network Effects, Standardization, and the Internet: What Have We Learned From The DVD Vs. DIVX Battle?

Dranove, David; Gandal, Neil - C.E.P.R. Discussion Papers - 1999

standardization, that is, left alone the market may fail to achieve standardization when it is socially desirable and (2) even if the …

Persistent link: https://www.econbiz.de/10005666918

A Quantitative Analysis of the Retail Market for Illicit Drugs

Galenianos, Manolis; Gavazza, Alessandro - C.E.P.R. Discussion Papers - 2015

We develop a theoretical framework to study illicit drugs markets and we estimate it using data on purchases of crack cocaine. Buyers are searching for high-quality drugs, but they determine drugs' quality (i.e., their purity) only after consuming them. Hence, sellers can rip off first-time...

Persistent link: https://www.econbiz.de/10011145480

A Linder Hypothesis for Foreign Direct Investment

Fajgelbaum, Pablo; Grossman, Gene; Helpman, Elhanan - C.E.P.R. Discussion Papers - 2011

We study patterns of FDI in a multi-country world economy. First, we present evidence for a broad sample of countries that firms direct FDI disproportionately to markets with income levels similar to their home market. Then we develop a model featuring non-homothetic preferences for quality and...

Persistent link: https://www.econbiz.de/10009367424