In November 1991, the Commission of the European Communities commissioned the Institut für Weltwirtschaft to carry out a report on ‘Taxation in Border Regions’. This study is a revised version of the report, which was submitted in 1993. The purpose of this study is to analyse the present...

Our concern is with economizing behavior when preferences depend on experience. It is shown that such dependence, reflecting 'deep psychological structure', even when it is stable or habit forming in a fixed environment, can be destabilizing in a market context when prices are adjusting, even...

A model is set up where migrants must choose a level of social traits and consumption of ethnic goods. As the consumption level of ethnic goods increases, the migrants become ever more different to the local population and are less assimilated. Less assimilation affects the reaction of the local...

One striking development associated with the explosion of e-commerce is the increased transparency of sellers' quality history. In this paper we analyze how this affects firms' incentives to invest in quality when the outcome of investment is uncertain. We identify two conflicting effects. On...

If producers have more information than consumers about goods' attributes, then they may use non-price (rather than price) adjustment mechanisms and, consequently, the market may reach a new equilibrium even if prices remain sticky. We study a situation where producers adjust the quantity (per...

This paper shows that prices may be sticky when buyers must search to determine the current market price and there is uncertainty about the expected duration of cost changes. Specifically, during periods when costs, and hence prices are high, low valuation consumers optimally stop searching and...

Empirical evidence suggests that prices are sticky with respect to cost changes. Moreover, prices respond more rapidly to cost increases than to cost decreases. We develop a search theoretic model which is consistent with this evidence and allows for additional testable predictions. Our results...

We study the properties of a profit-maximizing monopolist's optimal price distribution when selling to a loss-averse consumer, where (following Koszegi and Rabin (2006)) we assume that the consumer's reference point is her recent rational expectations about the purchase. If it is close to...

This paper is concerned with the tension between consumer persuasion and freedom of choice. We study how assertive language (as in the slogan Just do it!) affects consumer compliance in hedonic vs. utilitarian contexts. Previous literature consistently claimed that forceful language would cause...

This paper shows that privacy concerns in commercial contexts are not solely driven by a desire to control the transmission of personal information or to avoid intrusive direct marketing campaigns. When they express privacy concerns, consumers anticipate indirect economic consequences of data...