Laitinen (1980) derives an input allocation model for a multiproduct firm that first maximizes revenue and second maximizes profit. While theoretically elegant, the model has never been formulated empirically because of the complexity of the model’s price-deflated terms. This paper derives the...

We endogenize the trading mechanism selection in a model of directed search with risk averse buyers and show that the unique symmetric equilibrium entails all sellers using fixed price trading. Mechanisms that prescribe the sale price as a function of the realized demand (auctions, bargaining,...

We demonstrate that the Varian (1980) model of sales has a unique Nash equilibrium when firms incur costly advertising to compete for informed consumers. The equilibrium is symmetric. In particular, with costly advertising, the asymmetric equilibria highlighted by Baye et al. (1992) do not arise.

This paper extends the eductive learning approach in settings with non-atomistic agents. It shows the connection between the characterization of rationalizable sets by Basu (1991) and the seminal result by Guesnerie (1992) in the context of Cournot oligopoly models.

We characterize equilibrium and efficient modes of production by comparing nested (vertical) outsourcing with horizontal outsourcing. Nested outsourcing is found to be inefficient unless the cost of monitoring outsourced production lines increases sharply with the number of subcontractors and...

This article studies the firm-level productivity convergence process in the 1990s and the 2000s in France. The speed of convergence has slowed during the course of the 1990s, a fact which is explained principally by the acceleration of the productivity of firms on the technological frontier....

We investigate the effects of downstream firms’ managerial incentives on upstream collusion. Downstream profit-and-revenue incentive schemes make upstream manufacturers easier to collude than a pure-profit incentive scheme does when retailers compete in prices. However, the opposite occurs...

The paper shows that producer-owned firms are more efficient in quality provision than investor-owned firms if input quality is observable, while they are less efficient when the input quality is unobservable and the size of the organization is large.

This paper analyzes the impact of wage comparisons among inequity-averse agents on optimal incentive intensities in a linear–exponential–normal moral hazard model with multi-tasking. We consider individual and team production tasks that differ in that only individual production causes wage...

Using grocery store data we study the relationship between dispersion and the business cycle. Our findings reveal that overall there is no robust and significant relationship; however, these mask important heterogeneity in the cyclicality of dispersion at the category level.