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Inducing variety: A theory of innovation contests

Letina, Igor; Schmutzler, Armin - 2019

This paper analyzes the design of innovation contests when the quality of an innovation depends on the research approach, but the best approach is unknown. Inducing a variety of research approaches generates an option value. We show that suitable contests can induce such variety. The...

Persistent link: https://www.econbiz.de/10011993818

Promise, trust and betrayal: Costs of breaching an implicit contract

Levy, Daniel C.; Young, Andrew T. - 2019

We study the cost of breaching an implicit contract in a goods market, building on a recent study that documented the presence of such a contract in the Coca-Cola market, in the US, during 1886-1959. The implicit contract promised a serving of Coca-Cola of a constant quality (the "real thing"),...

Persistent link: https://www.econbiz.de/10012057429

Testing out contractual incompleteness : evidence from soccer

Carbonell-Nicolau, Oriol; Comin, Diego - 2005

The theory of incomplete contracting is rival to that of complete contracting as a frame of reference to understand contractual relationships. Both approaches rest upon diametrically opposed postulates and lead to very different policy conclusions. From a theoretical viewpoint, scrutiny of the...

Persistent link: https://www.econbiz.de/10010263264

Migrants, ethnicity and strategic assimilation

Epstein, Gil S.; Gang, Ira N. - 2006

Ethnic networks are a way of overcoming informal barriers to trade such as information costs, risk, and uncertainty by … building trust and by substituting for the difficulty of enforcing contracts internationally. We study networks which emerge … home country. The degree of assimilation and the strength of the networks do not just happen", but are the outcomes of …

Persistent link: https://www.econbiz.de/10010266350

Reputation, social identity and social conflict

Smith, John - 2007

We interpret the psychology literature on social identity and examine its implications in a population partially composed of such agents. We model a population of agents from two exogenous and well defined social groups. Agents are randomly matched to play a reduced form bargaining game. We show...

Persistent link: https://www.econbiz.de/10010266354

Explicit Evidence on an Implicit Contract

Young, Andrew T.; Levy, Daniel - 2005

We offer the first direct evidence of an implicit contract in a goods market. The evidence we offer comes from the market for Coca-Cola. We demonstrate that the Coca-Cola Company left a substantial amount of written evidence of its implicit contract with its consumers—a very explicit form of...

Persistent link: https://www.econbiz.de/10013204750

Can Economics Explain Where All-Inclusive Deals are Offered?

Bladh, Christian; Holm, Håkan J. - 2012

This paper investigates why all-inclusive travel packages are offered at some hotels but not at others. By using the theory of transaction cost, it is argued that all-inclusive contracts mitigate a hold-up problem and that the severity of this problem varies with regards to the hotel's distance...

Persistent link: https://www.econbiz.de/10013208603

Cooperation with Externalities and Uncertainty

Habis, Helga; Csercsik, Dávid - 2012

We introduce a new class of cooperative games where the worth of a coalition depends on the behavior of other players and on the state of nature as well. We allow for coalitions to form both before and after the resolution of uncertainty, hence agreements must be stable against both types of...

Persistent link: https://www.econbiz.de/10013208623

Backscratching in Hierarchical Organizations

Maggian, Valeria; Montinari, Natalia; Nicolò, Antonio - 2015

In this paper we investigate the role of reciprocity in sustaining the emergence of implicit collusive agreements in hierarchical organizations. We conduct a laboratory experiment in which an agent hires, on behalf of the principal, one worker out of two candidates. The two candidates differ in...

Persistent link: https://www.econbiz.de/10013208719

Estimating firms' bank-switching costs

Liaudinskas, Karolis; Grigaitçe, Kristina - 2021

We explore Lithuanian credit register data and two bank closures to provide a novel estimate of firms' bank-switching costs and a novel identification of the hold-up problem. We show that when a distressed bank's closure forced firms to switch, these firms started borrowing at lower interest...

Persistent link: https://www.econbiz.de/10012661576