In this paper, we introduce the psychological concept of anxiety into agency theory. An important benchmark in the anxiety literature is the inverted-U hypothesis which states that an increase in anxiety improves performance when anxiety is low but reduces it when anxiety is high. We consider a...

This is an exposition of the BLP method of structural demand estimation using the random-coefficients logit model.

We provide a unified treatment of alternative models of information acquisition/transmission that have been advanced to rationalize price dispersion in online and offline markets for homogeneous products. These different frameworks -- which include sequential search, fixed sample search, and...

We develop an equilibrium sequential search model which includes most of the literature as special cases. In particular, the model can accommodate heterogeneity in buyers’ search costs and demand functions and firms’ cost functions, with general demand and cost functions. We identify...

We consider the credibility, persuasiveness, and informativeness of multidimensional cheap talk by an expert to a decision maker. We find that an expert with state-independent preferences can always make credible comparative statements that trade off the expert's incentive to exaggerate on each...

We examine ascending auctions with independent private values and a buyout option. The buyout option gives each buyer the opportunity to end the auction prematurely and acquire the object for a fixed price. We fully characterize the unique symmetric equilibrium and show that buyers with...

The literature on voluntary agreements studies self-regulation, negotiated agreements and public voluntary programs, typically in the shadow of a legislative threat. Prior studies have examined each of these instruments in isolation, but interactions between them have received less attention. We...

This chapter provides a data-driven overview of the different online platforms that consumers use to search for books and booksellers, and documents how the use of these platforms is shifting over time. Our data suggest that, as a result of digitization, consumers are increasingly conducting...

Under the doctrine of shareholder primacy, the duty of a corporate director is to act for the benefit of the shareholders. This is not the same as profit maximization. It is only the same if shareholders care about profit and nothing else. The current Hobby Lobby case regarding a corporation’s...

Are new versions of products necessarily better? We analyze product innovation by a firm that engages in research and development designed to improve an existing product, the outcome of which is uncertain. If the firm adopts the innovation its modified product appears to consumers as new and...