We study a model of imperfect competition and limited production capacity in which a key feature is the trade-off between quality and quantity. In particular, lowering product quality enables firms to increase total production. We illustrate that, in the presence of limited capacity, the choice...

Empirically, we find that Web logs (or "blogs") often link to other blogs in the same category. We present an analytical model that explains why a rational blogger may choose to link to another blog. We allow bloggers to differ along two dimensions: (1) the ability to post news-breaking content,...

Consumers often purchase goods that are "hard to find" to conspicuously display their exclusivity and social status. Firms that produce such conspicuously consumed goods such as designer apparel, fashion goods, jewelry, etc., often face challenges in making optimal pricing and production...

Film studios occasionally withhold movies from critics before their release. Because the unreviewed movies tend to be below average in quality, this practice provides a useful setting in which to test models of limited strategic thinking: Do moviegoers seem to realize that no review is a sign of...

The pharmaceutical industry has always used sales representatives to target physicians (detailing), who are a key link in sales and market share for prescription pharmaceuticals. Since August of 1997, when the Food and Drug Administration eased the restrictions on direct-to-consumer advertising...

In final-offer arbitration the two parties to a dispute submit final offers to an arbitrator. The arbitrator then chooses as the binding solution that offer which is closest to his own view of the appropriate outcome. Because the disputants are imperfectly informed about the arbitrator's...

This paper examines the product positioning decisions of firms that enter a market sequentially and that have potentially different cost structures. It shows that if the first mover knows the second mover to have a lower production cost, it positions away from the most attractive location in the...

Consumers purchase conspicuous goods to satisfy not only material needs but also social needs such as prestige. In an attempt to meet these social needs, producers of conspicuous goods like cars, perfumes, and watches, highlight the exclusivity of their products. In this paper, we propose a...

Market games constitute a class of cooperative n-person games with sidepayments in which several coalitions may form simultaneously. In order to study coalition forming behavior in such games and to test the descriptive power of four major solution concepts that yield differing prescriptions for...