We examine pricing in markets where products may be of heterogeneous quality and buyers have heterogeneous preferences. The sellers cannot credibly communicate the quality they offer, and consequently price acts as a signal of quality. We determine the equilibria of the model both when the...

We consider a finite economy with men and women. The agents have status concerns such that when a particular agent has k agents of the same type below him/her in the income distribution, he/she gets utility kA, where A0, from status. Acquiring income is costly and once the income distribution is...

We study the price competition between two firms that have to advertise to reach consumers. Advertising can be either informative or persuasive (branding); the latter increases consumers' willingness to pay. When both firms advertise informatively, the pricing is in mixed strategies, and the...

Systematic empirical evidence on the consequences of incomplete contracts is meagre, because contracts are often classified as business secrets, and are accordingly difficult to obtain for research purposes. In this study we employ the extensive information from the life of a Finnish research...