The main objective of this study was to analyze the effect of advertising on social welfare in a perfectly competitive market where the level of advertising is chosen by a social planner. The theoretical model revealed that social planner sponsored advertising that increases the equilibrium...

We conducted a survey and a randomized natural experiment with the same subjects to investigate the effect of information about calorie intake on fast food choices. This combined approach allows us to maximize both internal and external research validity and test consistency of findings. We find...

The article offers measures of own and cross cost pass-through in a structural framework. Unlike the traditional reduced-form analysis used in the previous literature, our approach is applicable in situations where firm marginal cost data are unobserved. The empirical value of the model is...

The endogeneity of retail market power arises in the retail pricing equation due to the correlation between margins and unobserved cost components. Nevertheless, it has long been ignored in the equilibrium analysis of retail behavior. We address the issue via a control function approach in a new...

This study investigates whether importers of U.S. wheat form an integrated market or a series of segmented markets. Two market integration tests are applied: one based on equilibrium price relationships and one based on disequilibrium price relationships. With the exception of a few importers,...