The paper shows how prolonged price inertia can arise in a macroeconomic system in which there are temporary price rigidities as well as production lags in the use of intermediate goods. In this context, changes in production demand-generated, say, by changes in the money supply - have...

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We study the effects of parallel trade in the pharmaceutical industry. We develop a model in which an original manufacturer competes in its home market with parallel-importing firms. The theoretical analysis results in two key hypotheses. First, if the potential for parallel imports is...

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What is the impact of the increasing dominance of conventional firms in e-commerce? We use a simple model to show that retailers who only sell through Internet have lower on-line prices than retailers who also sell through conventional stores. This proposition is firmly supported by our...

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We study risk taking on behalf of others in an experiment on a large random sample. The decision makers in our experiment are facing high-powered incentives to increase the risk on behalf of others through hedged compensation contracts or with tournament incentives. Compared to a baseline...