Extended warranties are popular but expensive. This paper examines how consumers value these warranties, and asks whether economic considerations alone can account for their popularity. Results from two field surveys show that consumers greatly overestimate both the likelihood and the cost of...

Unrealistic optimism is all around us, and it is a well-documented psychological phenomenon. The purpose of this study is to take a critical approach of the main research done in the area and to analyze the important impact that it has in many economic and managerial contexts. We also analyze...

This study defines an aspect of consultant knowledge that provides credibility without claiming unrealistic status for a field like consulting. Our focus is the "sector knowledge" that consultants accumulate which derives from repeated assignments in the industrial sector in which the client...

Despite a pervasive belief that the world's largest firms compete globally, the vast majority have most of their sales in their home regions. Of the top 500 firms for which regional sales data are available, 118 are from Europe, and they compete predominantly within the European region. On...

We present a Hotelling model of price and advertising competition between prescription drugs that differ in quality/side effects. Advertising results in the endogenous formation of two consumer groups: brand loyal and non-brand loyal ones. We show that advertising strategies are strategic...