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Rent-sharing, Holdup, and Wages : Evidence from Matched Panel Data

Card, David - 2010

When wage contracts are relatively short-lived, rent sharing may reduce the incentives for investment since some of the returns to sunk capital are captured by workers. In this paper we use a matched worker-firm data set from the Veneto region of Italy that combines Social Security earnings...

Persistent link: https://www.econbiz.de/10012462464

Investment under Uncertainty : Testing the Options Model with Professional Traders

List, John A. - 2010

An important class of investment decisions is characterized by unrecoverable sunk costs, resolution of uncertainty through time, and the ability to invest in the future as an alternative to investing today. The options model provides guidance in such settings, including an investment decision...

Persistent link: https://www.econbiz.de/10012462614

Sunk Costs and Risk-Based Barriers to Entry

Pindyck, Robert S. - 2009

In merger analysis and other antitrust settings, risk is often cited as a potential barrier to entry. But there is little consensus as to the kinds of risk that matter - systematic versus non-systematic and industry-wide versus firm-specific - and the mechanisms through which they affect entry....

Persistent link: https://www.econbiz.de/10012463892

Last-In First-Out Oligopoly Dynamics

Abbring, Jaap H. - 2009

This paper extends the static analysis of oligopoly structure into an infinite-horizon setting with sunk costs and demand uncertainty. The observation that exit rates decline with firm age motivates the assumption of last-in first-out dynamics: An entrant expects to produce no longer than any...

Persistent link: https://www.econbiz.de/10012463973

Monopoly Power and Endogenous Product Variety : Distortions and Remedies

Bilbiie, Florin O. - 2008

The inefficiencies related to endogenous product creation and variety under monopolistic competition are two-fold: one static--the misalignment between consumers and producers regarding the value of a new variety; and one dynamic--time variation in markups. Quantitatively, the welfare costs of...

Persistent link: https://www.econbiz.de/10012464264

Sunk Costs and Real Options in Antitrust

Pindyck, Robert S. - 2005

Sunk costs play a central role in antitrust economics, but are often misunderstood and mismeasured. I will try to clarify some of the conceptual and empirical issues related to sunk costs, and explain their implications for antitrust analysis. I will be particularly concerned with the role of...

Persistent link: https://www.econbiz.de/10012467249

Outsourcing and Technological Change

Bartel, Ann - 2005

In this paper we argue that an important source of the recent increase in outsourcing is the computer and information technology revolution, characterized by increased rates of technological change. Our model shows that an increase in the pace of technological change increases outsourcing...

Persistent link: https://www.econbiz.de/10012467527

Entry and Asymmetric Lobbying : Why Governments Pick Losers

Baldwin, Richard E. - 2002

Governments frequently intervene to support domestic industries, but a surprising amount of this support goes to ailing sectors. We explain this with a lobbying model that allows for entry and sunk costs. Specifically, policy is influenced by pressure groups that incur lobbying expenses to...

Persistent link: https://www.econbiz.de/10012469959

Market Entry Costs, Producer Heterogeneity, and Export Dynamics

Das, Sanghamitra - 2001

As the exchange rate, foreign demand, production costs and export promotion policies evolve, manufacturing firms are continually faced with two issues: Whether to be an exporter, and if so, how much to export. We develop a dynamic structural model of export supply that characterizes these two...

Persistent link: https://www.econbiz.de/10012470087

Trade Adjustment Dynamics and the Welfare Gains from Trade

Alessandria, George - 2014

We study how the transitions following a trade reform are shaped by the time it takes for new exporters to grow in the … firm trade models: Investing in exporting gradually and stochastically lowers the costs of exporting. The model captures … exporters. In the model, aggregate trade dynamics arise from producer-level decisions to invest in lowering their future …

Persistent link: https://www.econbiz.de/10012458002

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