Why do some consumers pay a premium for branded products? According to the consumer information theory, brands signal the quality of experience goods (products whose quality cannot be determined on inspection) to consumers for whom personal search and testing is relatively costly. We find that...

One might mistakenly think that the long tradition of economic analysis in antitrust law would mean there is little new to say. Yet the field is surprisingly dynamic and changing. The specially commissioned chapters in this landmark volume offer a rigorous analysis of the field’s most...

How can two physically identical gasoline stations differentiate themselves? In this article we develop and test a model of service time competition: some stations set higher prices and thereby offer shorter queues, whereas others offer lower price and longer queues. We find that retail demand...

Firms can form partial ownership arrangements by purchasing claims to competitor's profits in order to commit to less aggressive competition. These arrangements can increase profits for all firms in the industry even in the absence of synergies. Using a conjectural variations model, the author...

In Cournot-based oligopoly models there is an incentive for firms to pursue overly aggressive behavior, resulting in prices and profits below those of the Cournot equilibrium. Compensating managers in proportion to a combination of profits and sales provides one mechanism through which...

Firms selling a product with congestion externalities to a heterogeneous population of customers have an incentive to offer differentiated levels of quality. In a price competitive market, differentiation arises endogenously through the prices chosen by firms. In equilibrium, firms offer a range...