The present paper develops a basic framework for evaluating and optimizing profits in a business operation. In developing a business we are often faced with an infinity of choices ranging from what products or services to sell and what customers to target to how to structure and manage the...

The article presents a theory that I denote “Relative Thinking Theory,” which claims that people consider relative differences and not only absolute differences when making various economics decisions, even in those cases where the rational model dictates that people should consider only...

Given that demand for durable goods is not constant over time, we propose in this article a transformation of the utility function, which accounts for discrete time and for the effect of different levels of income in the utility of buying. With this, the original Coase paradox will collapse. The...

This article evaluates two different remedies for consumers who have been injured by a price overcharge on the sale of a good. Under a coupon remedy, injured consumers are awarded coupons that can be used for a limited period of time to purchase the good at a price below that which prevails...

Resumo: O consumidor de um bem durável tem uma expectativa face ao momento futuro, que é caracterizada pelo usufruto de uma inovação do produto introduzida através da publicidade experimentável, a qual contribui para a diminuição do preço dos bens duráveis no momento actual. A...

I study Cournot competition under incomplete information about demand while assuming that market price must be non-negative for all demand realizations. Although this assumption is very natural, it has only rarely been made in the earlier literature. Yet it has important economic consequences:...

We study the effects of unequal representation in the interest-group system on the degree of information transmission between a lobbyist and a policymaker. Employing a dynamic cheap-talk model in which the lobbyist cares instrumentally about his reputation for truthtelling, we show that the...

This study is part of a continuing program of research into the performance of economic infrastructure industries, which was commenced by the Bureau of Industry Economics. It is the third Waterfront Benchmarking report in the cycle. The study builds on the two previous waterfront studies by...

Recent surveys in the United States and the Muslim world show widespread misinformation about the events of September 11, 2001. Using data from 9 predominantly Muslim countries, we study how such beliefs depend on exposure to news media and levels of education. Standard economic theory would...