This paper analyzes the behavior of prices and finished-goods inventories in a model of monopolistic competition, where the motivation for holding inventories is the prospect of lost sales. An eventual goal of the present investigation is the development of an empirical framework, based on a...

An important issue in many antitrust lawsuits involving professional sports leagues and their member teams is the extent to which franchises within the same, and across different, professional sports leagues compete with one another for fans and advertisers. Complicating the issue is the fact...

This paper studies two-part tariffs with explicit consideration of cost uncertainty and risk aversion. It finds that firms charge a risk premium over expected marginal cost for each unit they sell. This pricing rule is socially optimal if and only if the modeled market is fully covered in...

When firms' shrouding of charges, as in Gabaix and Laibson (2006), meets with consumers' salient thinking, as in Bordalo et al. (2013), this can have severe welfare implications. The ensuing excessive competition for headline prices tends to inefficiently bias consumers' choice towards...

How should firms optimally choose prices and promotional strategies and how should they position their products when consumers are "relative thinkers"? We provide answers in a model that extends the seminal contributions of Varian (1980) and Narasimhan (1988) and derive both managerial...

We here want to analyze how the imperfect competition mark-up and pass-through are transmitted through the production chain and how they change, as a function of the number of firms existing at each production stage. In order to have an analytical closed form solution, we use the standard linear...

I consider an oligopoly model where, prior to price competition, firms invest in persuasive advertising and induce brand loyalty in consumers who would otherwise buy the cheapest alternative on the market. This setting, in which persuasive advertising is introduced to homogeneous product...

A methodology is proposed to estimate structural models of product line competition. This methodology enables researchers to estimate demand systems accounting for the endogeneity of the mix of products available in each market, an issue which is typically ignored in the empirical literature. In...

We present a laboratory experiment on the impact of price framing on consumer decision making. Consumer subjects face a search market where two sellers offer a homogenous good. We examine six different price frames with linear per-unit pricing (that is displayed as such) serving as a benchmark....

The theoretical relationship between market structure (number of firms) and conduct (pricing behavior) of the generic drug industry was investigated. The effects of qualitative variables such as therapeutic category, duration of use, popularity, and market entry aggressiveness on the...