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Coordination and Lock-In: Competition with Switching Costs and Network Effects

Farrell, Joseph; Klemperer, Paul - C.E.P.R. Discussion Papers - 2006

Switching costs and network effects bind customers to vendors if products are incompatible, locking customers or even markets in to early choices. Lock-in hinders customers from changing suppliers in response to (predictable or unpredictable) changes in efficiency, and gives vendors lucrative ex...

Persistent link: https://www.econbiz.de/10005124423

Contracting with Diversely Naive Agents

Eliaz, Kfir; Spiegler, Ran - C.E.P.R. Discussion Papers - 2004

A principal contracts with agents who have diverse abilities to forecast changes in their future tastes. While the principal knows that the agent’s tastes are changing, the agent believes that with probability ?, their future preferences will be identical to their present preferences. The...

Persistent link: https://www.econbiz.de/10005504207

How Strong Buyers Spur Upstream Innovation

Inderst, Roman; Wey, Christian - C.E.P.R. Discussion Papers - 2005

We challenge the view that the presence of powerful buyers stifles suppliers' incentives to innovate. Following Katz (1987), we model buyer power as buyers' ability to substitute away from a given supplier and isolate several effects that support the opposite view, namely that the presence of...

Persistent link: https://www.econbiz.de/10005136445

Selling to a cartel of retailers: a model of hub-and-spoke collusion

Sahuguet, Nicolas; Walckiers, Alexis - C.E.P.R. Discussion Papers - 2013

This model describes the working of hub-and-spoke collusion that has been discussed recently by competition policy authorities. We develop a model of tacit collusion between a manufacturer and two retailers, competing a la Rotemberg and Saloner (1986). The best collusive equilibrium between...

Persistent link: https://www.econbiz.de/10011083474

Exclusive Dealing and Vertical Integration in Interlocking Relationships

Nocke, Volker; Rey, Patrick - C.E.P.R. Discussion Papers - 2014

We develop a model of interlocking bilateral relationships between upstream firms (manufacturers) that produce differentiated goods and downstream firms (retailers) that compete imperfectly for consumers. Contract offers and acceptance decisions are private information to the contracting...

Persistent link: https://www.econbiz.de/10011084283

The design and efficiency of loyalty rewards

Caminal, Ramon - C.E.P.R. Discussion Papers - 2009

The goal of this paper is to reexamine the optimal design and efficiency of loyalty rewards in markets for final consumption goods. While the literature has emphasized the role of loyalty rewards as endogenous switching costs (which distort the efficient allocation of consumers), in this paper I...

Persistent link: https://www.econbiz.de/10008458297

Corruption And Competition In Public Market Auctions

Compte, Olivier; Lambert-Mogiliansky, Ariane; Verdier, … - C.E.P.R. Discussion Papers - 2000

This paper investigates the effect of corruption on competition in government procurement auctions. Our assumption is that the bureaucrat (i.e. the agent that administers the market), if corrupt, may provide a favour in exchange for a bribe. The favour we consider in most of our analysis is the...

Persistent link: https://www.econbiz.de/10005662229

Speculative Contracts

Eliaz, Kfir; Spiegler, Ran - C.E.P.R. Discussion Papers - 2005

We propose to view action-contingent contracts as bets, motivated by different prior beliefs between the contracting parties (rather than, say, as an instrument for overcoming moral hazard problems). Such differences in prior beliefs may arise from inherent biases such as over-optimism. Menus of...

Persistent link: https://www.econbiz.de/10005666429

Art Auctions: A Survey of Empirical Studies

Ashenfelter, Orley C; Graddy, Kathryn - C.E.P.R. Discussion Papers - 2002

This Paper contains a review of the burgeoning research that has been designed to shed light on how the art auction system actually works and what it indicates about price formation. First, we find that in recent years returns on art assets appear to be little different from returns on other...

Persistent link: https://www.econbiz.de/10005666866

Should Mergers Be Controlled?

Fridolfsson, Sven-Olof; Stennek, Johan - C.E.P.R. Discussion Papers - 2001

' incentives to merge (a hold-up mechanism). Firms delay merger proposals, thereby foregoing valuable profits and hoping other … demonstrate a surprising inter-temporal link. Merger incentives may be reduced by the prospect of additional profitable mergers in … the future. The prospect of a future merger increases the value of becoming an insider in the first merger, which tends to …

Persistent link: https://www.econbiz.de/10005788894

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