In the context of a single equation in a system of simultaneous equations there is evidently some confusion in the literature as to the correct approach to the problem of prediction. Here we explore this problem and compare three different approaches to it. We also relate this discussion to...

This note discusses partial identification in a nonparametric triangular system with discrete endogenous regressors and nonseparable errors. Recently, Jun et al. (2011, JPX) provide bounds on the structural function evaluated at particular values using exclusion, exogeneity and rank conditions....

We consider a differentiated duopoly and endogenise the firm choice of the strategy variable (price or quantity) to play on the product market in the presence of network externalities. We model this choice by assuming both competition between entrepreneurial (owner-managed) firms and competition...

We provide a game-theoretic alternative of the kinked demand curve explanation of rigid prices. We analyze a duopoly where firms choose quantities and objectives. We identify cases under which firms choose to maximize their revenue. Under these cases, prices are insensitive to unit costs.

Dynamic pricing strategies are likely an important consideration of Singapore condominium developers because of the durability of condominiums, price transparency, and the long sales period. While we do not observe any systematic relationship between the new sale prices and time of purchase, we...

In infinite horizon, a credible durable-good monopolist may resort to intertemporal price discrimination. We provide an analytical characterization of his optimal price policy when consumers and the monopolist have different values for the trade because of distinct discount factors.

This paper analyzes in a relational contracting framework when a principal should fully delegate a task to a team of hired workers or only partially delegate the task and work herself in the team. It is shown that full delegation is more likely to be optimal under a less efficient monitoring...

Theoretical articles on incentive systems almost exclusively focus on linear compensations, while, in practice, nonlinear elements, such as quota bonuses, are not uncommon. Our article tries to bridge that gap; it shows how the use of quotas can increase the owners’ profits, which agents are...

Focusing on a panel of unlisted firms from transition economies, we observe that only firms facing low irreversibility exhibit high and significant investment-cash flow sensitivities. Our findings provide a new explanation for why some financially constrained firms may exhibit low sensitivities.