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Self-interest, Social Wealth, and Competition as a Discovery Procedure : A classroom experiment that makes the "invisible hand" visible

Kirstein, Roland; Schmidtchen, Dieter - 2003

theory of human behavior. Even classroom experiments may serve this purpose. This paper describes a simple classroom … experiment that serves as an empirical test of Adam Smith?s invisible- hand hypothesis. Furthermore, it demonstrates to the … students that competition acts as a discovery procedure. The experiment is of high didactical value, since the students gain …

Persistent link: https://www.econbiz.de/10010296887

Eigennutz als Triebfeder des Wohlstands: Die "invisible hand" - im Hörsaal-Experiment sichtbar gemacht

Kirstein, Roland; Schmidtchen, Dieter - 2002

zumindest ihre grundlegenden Verhaltenshypothesen testen zu können. Dieser Beitrag stellt ein einfaches Hörsaal-Experiment vor …, das Adam Smiths Hypothese von der "unsichtbaren Hand" im Marktgeschehen empirisch überprüft. Das Experiment zeigt zudem … experiments to test at least the basic assumptions of the economic theory of human behavior. This paper describes a simple …

Persistent link: https://www.econbiz.de/10010296963

Anti-dumping, intra-industry trade and quality reversals

Moraga-González, José Luis; Viaene, Jean-Marie - 2004

We examine an export game where two firms (home and foreign), located in two different countries, produce vertically differentiated products. The foreign firm is the most efficient in terms of R&D costs of quality development and the foreign country is relatively larger and endowed with a...

Persistent link: https://www.econbiz.de/10010261110

Vertical product differentiation when quality is unobservable to buyers

Orosel, Gerhard O.; Zauner, Klaus G. - 2004

We analyze vertical product differentiation in a model where a good's quality is unobservable to buyers before purchase, a continuum of quality levels is technologically feasible, and minimum quality is supplied under competitive conditions. After purchase the true quality of the good is...

Persistent link: https://www.econbiz.de/10010261256

Strikes, Scabs and Tread Separations: Labor Strife and the Production of Defective Bridgestone/Firestone Tires

Krueger, Alan B.; Mas, Alexandre - 2003

This paper provides a case study of the effect of labor relations on product quality. We consider whether a long, contentious strike and the hiring of replacement workers at Bridgestone/Firestone?s Decatur plant in the mid-1990s contributed to the production of defective tires. Using several...

Persistent link: https://www.econbiz.de/10010261592

Asymmetric information and overinvestment in quality

Belleflamme, Paul; Peitz, Martin - 2009

In a standard adverse selection world, asymmetric information about product quality leads to quality deterioration in the market. Suppose that a higher investment level makes the realization of high quality more likely. Then, if consumers observe the investment (but not the realization of...

Persistent link: https://www.econbiz.de/10010264613

Wealth as a signal in the search model of money

Okumura, Tsunao - 2005

This paper investigates the possibility that wealth (holdings of money) serves as a signal of ability to produce high quality products for agents who cannot directly observe the quality of the products. A producer's wealth may advertise past success in selling products to agents who knew the...

Persistent link: https://www.econbiz.de/10010266277

The choice of environmental policy instruments: Energy efficiency and redistribution

Haupt, Alexander; Stadejek, Magdalena - 2010

We analyse optimal environmental policies in a market that is vertically differentiated in terms of the energy efficiency of products. Considering energy taxes, subsidies to firms for investment in more eco-friendly products, and product standards, we are particularly interested in how...

Persistent link: https://www.econbiz.de/10010270546

Consumers and the brain drain: product design and the gains from emigration

Kuhn, Peter; McAusland, Carol - 2008

We consider the welfare effects of skilled worker emigration in a context where skilled labor plays a role in product design. We show such emigration can benefit the residents left behind, even when consumers' tastes exhibit a form of home bias. This is because emigration improves the design of...

Persistent link: https://www.econbiz.de/10010274534

Product quality, informality, and child labour

Fotoniata, Eugenia; Moutos, Thomas - 2011

This paper studies the interactions between the structure of product demand, relative wages, and the allocation of economic activity across two sectors. The agrarian sector produces a homogeneous good and consists of informal firms employing adults and children. The modern sector produces a...

Persistent link: https://www.econbiz.de/10010277363