The paper examines the behaviour of "evolutionary" models with epsilon-noise like those which have been used recently to discuss the evolution of social conventions. The paper is built around two main observations: that the "long run stochastic stability" of a convention is related to the speed...

This paper studies whether agents must agglomerate at a single location in a class of models of two-sided interaction. In these models there is an increasing returns effect that favors agglomeration, but also a crowding or market-impact effect that makes agents prefer to be in a market with...

We examine the competition between a group of Internet retailers that operate in an environment where a price search engine plays a dominant role. We show that for some products in this environment, the easy price search makes demand tremendously price-sensitive. Retailers, though, engage in...

Data on memory modules sales are used to explore aspects of e-retail demand. Aggregate sales are examined in state-level regressions. Discrete choice techniques are used to examine (incomplete) hourly sales data from a price comparison site. We find a strong relationship between e-retail sales...

We examine two reasons why a monopoly supplier of software may introduce more upgrades than is socially optimal when the upgrade is backward but not forward compatible, so users who upgrade reduce others' network benefits. One explanation involves a commitment problem: profits and social welfare...

This article reexamines the experience of the Joint Executive Committee, an 1880s railroad cartel, to assess the applicability of the Green and Porter (1984) and Rotemberg and Saloner (1986) theories of price wars. After discussing necessary modifications to the theories, I estimate a number of...

This paper studies agents who consider the experiences of their neighbors in deciding which of two technologies to use. We analyze two learning environments, one in which the same technology is optimal for all players and another in which each technology is better for some of them. In both...