We show that the intuition underlying the supplier-induced demand (SID) hypothesis is reflected in the cheap-talk literature from game theory, and in the credence-good literature from the economics of information. Applying these theories, we conclude that a neoclassical version of the SID...

This paper distinguishes between two scenarios for the physician-patient encounter. In the cure scenario, the patient does not know whether a loss can be recovered. In the prevention scenario, the patient faces a threat but does not know whether this threat is real enough to justify preventive...

The literature on the electronic mail game shows that players' mutual expectations may lock them into requiring an inefficiently large number of confirmations and confirmations of confirmations from one another. This paper shows that this result hinges on the assumption that, with the exception...

This paper empirically investigates the impact of fixed asset subsidies to firms on market shares. By means of a tobit regression on a sample of over 13 000 Belgian firms we find a significant and positive joint influence of all fixed asset subsidies on market shares, acknowledging that this is...

In a recent issue of this journal, Basu (2013, Metroeconomica, 64 (2), pp. 293–318) presented some conditions under which replacement cost-based profit rates and historical cost-based profit rates evolve similarly, making, under these conditions, the choice between them irrelevant when...

The present paper investigates into the relationship between Competitive Intelligence (CI) factors, characteristics, information sources, needs, requirements and the export intensity of exporting companies in two distinct samples (Flanders and South Africa). We establish whether there are...

Using a stylized oligopoly model, we analyze the effect of cartel deterring fines, taking into consideration exemptions granted to cartel members cooperating with the competition authorities. We conclude that the fines can act as a deterrent to breaking collusive agreements, thus stabilizing the...

This paper recognizes that individuals working in the nonprofit sector can have different motives and investigates which type of manager nonprofit organizations should best employ. It first considers a situation in which the manager is allowed to attract only one employee and later extends the...

Holding companies, which play an important role in corporate finance in Belgium and in other Continental European countries, often trade at a discount to their estimated net asset value (NAV). First, we discuss possible explanations for this discount: holding company destroys value, NAV...

We investigate the role of trade credit as a source of financing. Using a sample of 661 large non-financial Belgian firms for the 1989-1991 period, we find that the amount of trade credit a buyer takes is determined by his need for funds and the internally available funds. Trade credit is...