The next generation of e-commerce will be conducted by digital agents, based on algorithms that will not only make purchase recommendations, but will also predict what we want, make purchase decisions, negotiate and execute the transaction for the consumers, and even automatically form...

This paper examines the influence of information on market performance in an advance purchase setting. Information reduces the risk that an advance purchase results in a mismatch between consumer preferences and product characteristics. However, information may also raise the number of advance...

International openness enhances social interactions between citizens of different countries or regions and vice versa. Social exchanges, in turn, increase trade flows between countries and influence markets and prices. We analyze the increased mobility that follows from openness between two...

We study the pricing decision of firms in the presence of consumer inertia. Inertia can arise from habit formation, brand loyalty, switching costs, or search, and it has important implications for the interpretation of equilibrium outcomes and counterfactual analysis. In particular, consumer...

We provide a framework for empirical analysis of negotiated-price markets. Using mortgage market data and a search and negotiation model, we characterize the welfare impact of search frictions and quantify the role of search costs and brand loyalty for market power. Search frictions reduce...

This paper studies the implications of consumer misperception in a market for a (horizontally) differentiated product. Two distinct type of misperceptions are considered: (i) a common misperception that leads consumers to similarly overestimate the benefit from both firms' products; and (ii) a...