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This paper argues that the conventional definition of the elasticity of complementarity is not well suited to deal with the case of increasing returns. It proposes a slightly different formula, that uses a distance function formulation instead of a production function. The proposed definition...
Persistent link: https://www.econbiz.de/10011337999
This paper presents an equation of the dynamic path of prices in a monopolistically competitive market in which firms sell to both old and new customers. Both types are able to search for the lowest price, given search costs, where the expected number of searches is given by the inverse of the...
Persistent link: https://www.econbiz.de/10013403841
We introduce a model of oligopoly dynamic pricing where firms with limited capacity face a sales deadline. We establish conditions under which the equilibrium is unique and converges to a system of differential equations. Using unique and comprehensive pricing and bookings data for competing...
Persistent link: https://www.econbiz.de/10013362001
The dominant view of inflation holds that it is macroeconomic in origin and must always be tackled with macroeconomic tightening. In contrast, we argue that the US COVID-19 inflation is predominantly a sellers' inflation that derives from microeconomic origins, namely the ability of firms with...
Persistent link: https://www.econbiz.de/10014229825
There is a wide consensus that the chronological order of firms entering new product markets can affect long-term market shares. Commonly, it is expected that early entrants are able to gain long-lasting competitive advantages over their followers. This is corroborated by a large body of...
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