We investigate a setting in which members of a population, bifurcated into a majority and a minority, transact with randomly matched partners. All members are uniformly altruistic, and each transaction can be carried out cooperatively or through a market mechanism, with cooperative transactions...

In this paper we consider the effect of quantity restrictions and scrutiny on the consumption of quasi-free goods. A good is quasi-free if it is zero priced, but it is consumed in the context of a social setting (e.g., as an employee, client, friend, etc.). Examples include cookies at a picnic,...

We consider default rules for instances in which parties to a contract did not allocate the risk of a certain contingency, and both sides could have helped avoid the occurrence of breach of the contract or lessen the damages from it occurring. We compare alternative regimes with a fault-based...

We compare predictions from a theoretical model based on the structure of the main outdoor retail market in Jerusalem with the results of an empirical analysis of price response to changes in cost. We find that firms without adjacent competition exhibit both upward and downward price rigidity,...

We exploit cross-sectional and temporal differences in search intensity in order to examine the relationship between search costs and price dispersion using a hand-collected panel data set from Jerusalem’s Shuk Mahane Yehuda outdoor market. We present empirical evidence that price dispersion...

A network market is a market in which the benefit each consumer derives from a good is an increasing function of the number of consumers who own the same or similar goods. A major obstacle that plagues the introduction of a network good is the ability to reach critical mass, namely, the minimum...

In this paper we import a mainstream psycholgical theory, known as attachment theory, into economics and show the implications of this theory for economic behavior by individuals in the ultimatum bargaining game. Attachment theory examines the psychological tendency to seek proximity to another...

In this paper we considered a new solution to the credibility problem present in network industries. This problem arises because the value of a network good to its owner depends positively on the number of consumers who buy the good. Because of this property, it is in the interest of the...

In this paper we analyze a network market in which it is beneficial for a producer to invite competitors to share a market, even when this is not needed in order to affect consumer beliefs. Because of the nature of such goods, the demand curve for network markets typically rises and then falls....

No matter how many times a prisoner’s-dilemma-like game is repeated, the only equilibrium outcome is the one in which all players defect in all periods. However, if cooperation among the players changes their perception of the game by making defection increasingly less attractive, then it is...