We consider a two-period model in which duopolists sell experience goods and practice behavior-based price discrimination (BBPD). We give general conditions for when firms should offer a lower price to existing customers (‘pay-to-stay’) or to new customers (‘pay-to-switch’). We also...

We show that, in general, consistent estimates of cost pass-through are not obtained from reduced-form regressions of price on cost. We derive a formal approximation for the bias that arises even under standard orthogonality conditions. We provide guidance on the conditions under which bias may...

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...

This paper studies the impact of relative performance evaluation (RPE) on the equilibrium locations in a Hotelling model with quadratic transportation cost. It is shown that equilibrium location varies from maximum differentiation to minimum differentiation, depending upon the relative strength...

Cressy (2000) argues that the positive correlation between assets and the rate of business startups is due to DARA preferences. We show however that the required property is prudence, and prudence is consistent with DARA, IARA or CARA.

Regional corruptness in China has a positive effect on the profitability of private firms, but not that of state-owned firms. A natural experiment of exogenous trade policy change suggests that corruption may help private firms circumvent government regulation.

We use data from approximately 50,000 crowdfunding projects to assess the relative funding performance of for-profit and non-profit campaigns. We find that non-profit projects are significantly more likely to reach their minimum funding goals and that they receive more money from the average...

A monopoly that sells to brand-name loyal customers and to price-sensitive customers must decide whether to carry both name-brand and private-label products and how much to charge. The monopoly may charge either more or less for the brand name if it carries a private label, and the price...

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...

I develop a semi-structural approach to identify network effects on two-sided monopoly platforms without data on prices and quantities. When total revenue data is available, the test is sufficient. When separate revenue data is available on the two sides, the test is both necessary and sufficient.