This paper compares equilibrium outcomes in search markets with and without referrals. Although consumers would benefit from honest referrals, it is not at all clear whether firms would unilaterally provide information about competing offers since such information could encourage a consumer to...

In many industries, firms reward their customers for making referrals. We analyze the optimal policy mix of price, advertising intensity, and a referral fee for monopoly when buyers choose to what extent to refer other consumers to the firm. We find that the firm advertises less under referrals,...

Jun and Kim (2008) consider the optimal pricing and referral strategy of a monopoly that uses a consumer communication network to spread product information. They show that for any finite referral chain, the optimal policy involves a referral fee that provides strictly positive referral...

In many contests, players can influence the outcome through efforts in multiple activities, several of which can be chosen before others. In this paper, we develop a model of dynamic multiactivity contests. Players simultaneously choose efforts in long-run activities, observe each other's...

This paper compares the equilibrium outcomes in search markets with and without referrals. Although it seems clear that consumers would benefit from referrals, it is not at all clear whether firms would unilaterally provide information about competing offers since such information could...

Transaction costs are usually thought to be a major source of inefficiency because they do not allow efficient trades to take place. One might think that lowering transaction costs is always welfare-improving. This paper argues that, in contrast to conventional wisdom, it may be beneficial to...

In many real world contests, players can influence their chances of winning through two or more activities or "arms." In this paper, we analyze the equilibrium properties of a two-player two-armed contest, and compare them to those of a standard two-player one-armed contest. Several interesting...

This paper explores the importance of investment-specific technology changes in anticipated TFP fluctuations. To this end, we identify two types of news shocks with the maximum forecast error variance approach: news shocks to TFP and news shocks to the relative price of investment. We show in a...

In a signaling game between a receiver and senders, prejudice occurs if senders are prejudged based on an index such as race without reference to their qualifying signals. This paper investigates what makes the receiver ignore senders' informative signals in favor of the uninformative index....

We analyze the welfare implication of regulating the price of last-mile access to consumers provided by local Internet service providers (ISPs). We consider a new two-sided market model that highlights the vertical relationship between two platforms, a local ISP and a large content provider...