This paper surveys models of markets in which some consumers are "savvy" while others are not.  We discuss when the presence of savvy consumers improves the deals available to non-savvy consumers in the market (the case of search externalities), and when the non-savvy fund generous deals for...

The trend towards Internet self-regulation is driven both by governments that feel reluctant to invest in direct regulation (because of freedom of speech concerns or high costs of monitoring and enforcement) and by the industry that is under the threat of rising public concerns over content...

Market share objectives are prominent in many industries, especially where managers pay much attention to league table rankings. This paper explores the strategic rationale for giving managers incentives based on market share in an oligopoly competing in strategic substitutes. Moreover, the...

We consider an observer who makes a finite number of observations of an industry producing a homogeneous good, where each observation consists of the market price and firm specific production quantities.  We develop a revealed preference test (in the form of a linear program) for the hypothesis...

Edgworth's taxation paradox states that an excise tax can decrease the market price of a good.  This paper presents a new version of the paradox in which a tax reduces price because it attracts entry of additional firms into the market.  The paper also presents two new applications: (i) an...

A seller wishes to prevent the discovery of rival offers by its prospective customers.  We study sales techniques which serve this purpose by making it harder for a customer to return to buy later after a search for alternatives.  These include making an exploding offer, offering a "buy-now"...

This paper investigates discount pricing, the common marketing practice whereby a price is listed as a discount from an earlier, or regular, price.  We discuss two reasons why a discounted price - as opposed to a mearly low price - can make a rational consumer more willing to purchase the...

A common sales tactic is for a seller to encourage a potential customer to make her purchase decision quickly, before she can investigate rival deals in the market.  We consider a market with sequential consumer search in which firms can achieve this either by making an exploding offer (which...

Ultimatum games have been extensively used in experimental studies. By studying the consequences that restrictions shared by ultimatum games have in subject`s behaviour, this paper argues that some results are falsified by design constraints. This paper also presets a taxonomy of certification,...

Through an experiment this study investigates the effects that verification has on honest traders. This paper demonstrates that by reducing the scope for trust verification can have a negative effect on the behaviour of honest individuals. Specifically, the analysis shows that trustworthy agents...