This paper investigates the effect of market size on innovation activities across different durable good industries in the Chinese manufacturing sector. We use a potential market size measure driven only by changes in the Chinese income distribution which is exogenous to changes in prices and...

It is commonly assumed in private label literature that store brands are of lower quality than competing national brands. In this paper, we contest this notion by studying quality competition between a national- brand manufacturer and a store-brand retailer. The manufacturer sells its...

Tax evasion is a serious and growing problem in the United States. From 2008 through 2010, the Internal Revenue Service estimated underreported taxes at $264 billion. Servers, who receive a large portion of their income through tips, do not always comply with tax laws when reporting their tip...

The year on year statistics about buying on-line clearly indicates a positive trend both in terms of value and volume. The marketers are expected to look at the scenario with a new approach to understand the consumer need as it is a new medium. This paper attempts to estimate category of product...

The positive association between moderate alcohol consumption and wages is well documented in the economic literature. Positive health effects as well as networking mechanisms serve as explanations for the "alcohol-income puzzle". Using individual-based microdata from the GSOEP for 2006, we...

We study the ability of banks and merchants to influence the consumer's payment instrument choice. Consumers participate in payment card networks to insure themselves against three types of shocks| income, theft, and their merchant match. Merchants choose which payment instruments to accept...

This paper analyzes price competition in an infinitely repeated duopoly game. In each period, consumers remember the existence and location of their previous supplier. New information is gathered via search or word-of-mouth communication. Market outcomes are history-dependent, and the Markov...

We study the effect of government encouraged or mandated interchange fee ceilings on consumer and merchant adoption and usage of payment cards in an economy where card acceptance is far from complete. We believe that we are the first to use bank-level data to study the impact of interchange fee...

The so called flat-rate bias is a well documented phenomenon caused by consumers’ desire to be insured against fluctuations in their billing amounts. This paper shows that expectation-based loss aversion provides a formal explanation for this bias. We solve for the optimal two-part tariff when...

Basu (2006) argues that the prevalence of 99 cent prices in shops can be explained with rational consumers who disregard the rightmost digits of the price. This bounded rational behaviour leads to a Bertrand equilibrium with positive markups. We use data from an Austrian price comparison site...