Showing 1 - 10 of 172
We study the effects of improvements in market transparency on eBay on seller exit and continuing sellers’ behavior. An improvement in market transparency by reducing strategic bias in buyer ratings led to a significant increase in buyer valuation especially of sellers rated poorly prior to...
Persistent link: https://www.econbiz.de/10010877941
We determine the optimal health policy mix when the average utility of patients increases with the supply of drugs available in a therapeutic class. Health risk coverage rely on two instruments, copayment and reference pricing, that affect the supported risk composed by health expenses and...
Persistent link: https://www.econbiz.de/10010610086
Adding a stage of signal acquisition to the expected utility model shows that Bayesian updating results in a well defined law of demand for financial information when asset return distributions are conjugate priors to signals such as in the gamma-Poisson case. Signals have a positive marginal...
Persistent link: https://www.econbiz.de/10005405923
We study the influence of reason and intuition on decision making over time. Facing a sequence of similar problems, agents can either decide rationally according to expected utility theory or intuitively according to case-based decision theory. Rational decisions are more precise but create...
Persistent link: https://www.econbiz.de/10011103391
Economic evaluation of projects involving changes in mortality risk conventionally assumes that lives are statistical, i.e., that risks and policy-induced changes in risk are small and similar among a population. In reality, baseline mortality risks and policy-induced changes in risk often...
Persistent link: https://www.econbiz.de/10005094325
We show that ambiguity aversion increases the value of a statistical life as soon as the marginal utility of wealth is higher if alive than dead. The intuition is that ambiguity aversion has a similar effect as an increase in the perceived baseline mortality risk, and thus operates as the...
Persistent link: https://www.econbiz.de/10005406403
Human capital theory distinguishes between training in general-usage and firm-specific skills. In his seminal work, Becker (1964) argues that employers will not be willing to invest in general training when labor markets are competitive. However, they are willing to invest in specific training...
Persistent link: https://www.econbiz.de/10005766086
Economists have emphasized the role of dissipative advertising and price as signals of quality. Most works, however, limit the number of types to two options: high and low quality. Yet, production costs and quality both result from R&D efforts and therefore are both uncertain. I characterize the...
Persistent link: https://www.econbiz.de/10005094288
We model non-binding retail-price recommendations (RPRs) as a communication device facilitating coordination in vertical supply relations. Assuming both repeated vertical trade and asymmetric information about production costs, we show that RPRs may be part of a relational contract,...
Persistent link: https://www.econbiz.de/10008583652
Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer or the seller? Our answer - the seller - follows from a nontrivial analysis revealing a clear intuition. Buyer-induced certification acts as an inspection device,...
Persistent link: https://www.econbiz.de/10008853867