We analyse optimal environmental policies in a market that is vertically differentiated in terms of the energy efficiency of products. Considering energy taxes, subsidies to firms for investment in more eco-friendly products, and product standards, we are particularly interested in how...

This paper asks whether brand extension can serve as a signal of product quality given that it costs less than a new brand. (Existing literature has assumed either that brand extension is cost-neutral or that it costs more.) I show that it can as a perfect Bayesian equilibrium, but the argument...

This paper analyzes the role of product quality and labor efficiency in shaping the trade patterns and trade intensities within and across two groups of countries, the developed and richer North and the developing South. Recent empirical literature identifies a positive relation between income...

We examine the relationship between a country's institutional environment and the quality of its exports. Institutional factors such as widespread corruption, inefficient bureaucracy, and high risk of expropriation of private property by government can create uncertainty among producers and...

For many goods, quality improvements involve the use of more sophisticated, higher quality inputs. The production of these sophisticated inputs requires greater collaboration between suppliers and final good producers, with suppliers developing relationship-specific inputs, and final good...

We model a vertically differentiated duopoly with quantity-setting firms as an extended game in which firms noncooperatively choose the timing of moves at the quality stage, to show that at the subgame, perfect equilibrium sequential play obtains, with the low-quality firm taking the leader’s...

More and more firms today rely on product configurators to more efficiently and effectively meet increasingly diverse customers’ needs. In literature, however, the discussion of the performance outcomes of product configurator use is limited and largely based on anecdotal evidence. Our paper...

This paper estimates a heterogeneous firms trade model using sector level data on export participation, trade flows, and unit value prices in a multi-country setting. Examining within-exporter variation in prices across destinations, prices are increasing in the difficulty of entering the...

In order to ensure the continuing expansion and success of electronic commerce, the issue of how to assess product quality of items sold over the Internet must be addressed. The formal literature of microeconomics presents a conceptual framework for this assessment that is applied in the case...

In this paper, we provide a general model discussing the impact of non-homothetic preferences on the vertical comparative advantage of countries, i.e. the existence of demand-based determinants of the quality content of production and exports. We show that while average income positively impacts...