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model from the existing models by incorporating survey-based shortage indicators into the model and estimation. Our shortage … disequilibrium model informed by a shortage indicator fits the data better than the Maddala-Nelson model, and has better out …
Persistent link: https://www.econbiz.de/10011977792
In many markets, sellers advertise their good with an asking price. This is a price at which the seller is willing to take his good off the market and trade immediately, though it is understood that a buyer can submit an offer below the asking price and that this offer may be accepted if the...
Persistent link: https://www.econbiz.de/10009696885
We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect … theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility … an otherwise standard dynamic neoclassical model of monopolistic competition. The resulting theory of price adjustment is …
Persistent link: https://www.econbiz.de/10010350414
This paper examines the impact of trade liberalization on firms' product and labor market power. We estimate the prevalence and intensity of firm-level price-cost markups and either wage markups or wage markdowns. We take the dependence between these model-consistent measures of product and...
Persistent link: https://www.econbiz.de/10012169328
This paper takes advantage of a natural experiment to examine the relationship between the price and saliency of health services. A large employer e-mailed individually-targeted health education encouraging high-value care to high-risk employees. Weeks before the program launched, a company...
Persistent link: https://www.econbiz.de/10012314696
Medical providers often have a significant influence on treatment decisions which they can use in their own financial interest. Classical models of supplier-induced demand predict that medical providers will supply fewer services if they face increasing prices. We test this prediction based on a...
Persistent link: https://www.econbiz.de/10011308552
Previous research shows that firms shroud high add-on prices in competitive markets with naive consumers leading to inefficiency. We analyze the effects of regulatory intervention via educating naive consumers on equilibrium prices and welfare. Our model allows firms to shroud, unshroud, or...
Persistent link: https://www.econbiz.de/10009516903
We study experimentally the effect of bargaining power in two sequential mechanisms that offer the possibility to trade at a fixed price before an auction. In the "Buy-It-Now" format, the seller has the bargaining power and offers a price prior to the auction; whereas in the "Sell-It-Now"...
Persistent link: https://www.econbiz.de/10011407823
This paper extends Hall's (1988) methodology to analyse imperfections in both the product and the labour market for firms in the Belgian manufacturing industry over the period 1988-1995. We investigate the heterogeneity in price-cost mark-up and workers' bargaining power parameters among 18...
Persistent link: https://www.econbiz.de/10002574573
Evidence on behavior of experts in credence goods markets raises an important causality issue: Do "fair prices" induce "good behavior", or do "good experts" post "fair prices"? To answer this question we propose and test a model with three seller types: "the good" choose fair prices and behave...
Persistent link: https://www.econbiz.de/10009536497