We combine two data sets to study price rigidity. The first consists of weekly time series of retail, wholesale, and spot prices for twelve products. These time series contain two exogenous cost shocks. We find that prices exhibit more rigidity in response to the second shock than the first. The...

The purpose of this paper is to assess the sequence of technological changes occurred in the retail banking sector of the United Kingdom against the emergence of customer services by developing an evolutionary argument. The historical paradigm of Information Technology provides useful insights...

The Klein-Leffler (1981) model of product quality does not explain why high-quality firms would dissipate the rents they earn from quality- assuring price premia, and it relies on consumers knowing the cost functions of firms. In the present paper, consumers do not know any firm's cost of...

This paper develops a model of pricing and advertising in a matching environment with capacity constrained sellers. Sellers' expenditure on directly informative advertising attracts consumers only probabilistically. Consumers who happen to observe advertisements randomize over the advertised...

The economics of information goods suggest the need for institutional intervention to address the problem of revenue extraction from investments in resources characterized by high fixed costs of production and low marginal costs of reproduction and distribution. Solutions to the appropriation...

In this paper we extend Lizzeri's simple model of information transmission through certification intermediaries. A seller with no means to signal his quality has the possibility to be certified by an institution that owns a technology to discover the true quality and can credibly commit to a...

Integrating hitherto separate IT systems while keeping within with tight budgetary restrictions is becoming the dominant software trend in this decade. Optimism is currently starting to spread again in software houses. However, there are marked regional differences in potential. Contrary to some...

A durable-goods monopolist may use quality degradation as a commitment not to lower price in the future. The introduction of damaged goods expedites low-valuation consumers’ future demands, and helps the firm to mitigate the Coasian time-consistency problem. In such a case, damaged goods are...

Many transactions are now computer mediated, making it possible for sellers to condition their pricing on the history of interactions with individual consumers. This paper investigates conditions under which price conditioning will or will not be used. Our simplest model involves rational...

We analyze a model of repeated bilateral trade with moral hazard, where the quality of goods received can differ from the quality despatched due to deterioration during transportation. Since the sender does not observe the quality of good received and the receiver does not observe the quality...