We analyze the incentives for incumbent bricks-and-mortar firms and newentrants to start an online retail channel in a differentiated goods market. Tothis end we set up a two-stage model where firms first decide whether or notto build the infrastructure necessary to start an online retail...

We analyze a market where firms compete in a conventional and an electronicretail channel. Consumers easily compare prices online, but some incur purchaseuncertainties on the online channel. We investigate the market shares of the two retailchannels and the prices that are charged. We find that...

This discussion paper has led to a publication in the <I>Journal of Business Ethics</I>, 2013, 117(3), 601-13.<P> Halal certification of financials product may reduce transaction costs for its buyers when it provides a trusted standard for investors that seek to comply with Islamic law. However, we show...</p></i>

This discussion paper led to an article in <I>Games and Economic Behavior</I> (2012), pp. 120-138.<P> We consider an oligopolistic market where firms compete in price and quality and where consumers are heterogeneous in knowledge: some consumers know both the prices and quality of the products offered,...</p></i>

Firms signal high quality through high prices even if the market structure is highly competitive and price competition is severe. In a symmetric Bertrand oligopoly where products may differ only in their quality, production cost is increasing in quality and the quality of each firm’s product...

One of the drivers of green consumerism are social network externalities that are associated with buying 'green' because green consumerism is fashionable, or because of reputation effects. We analyze how the strength of this social network effect impacts green consumerism, environmental...

This paper studies the relationship between three key elements of the marketing mix, namely, price, product, and promotion, in a model where a seller employs informative advertising to launch a new product. We propose a fairly general advertising technology for the study of three promotional...

This paper discusses the design, implementation and use of standards from the perspective of transaction costs economics. A proper design and implementation of standards may lead to a considerable reduction of transaction costs, which enhances trade and, consequently, economic welfare. A major...

This paper models strategic interactions between a product supplier, a provider of information about product quality, and end users, in the context of road transportation. Using a game-theoretical analysis of suppliers' pricing strategies, we assess the social welfare effects of traffic...

This paper shows how a firm can use non-targeted advertising to exploit consumers' desire for social status. A monopolist sells multiple varieties of a good to consumers who each care about what others believe about his wealth. Advertising allows consumers both to buy different varieties and to...