This paper presents theory and experiments to investigate how network architecture influences route-choice behavior. We consider changes to networks that, theoretically, exhibit the Pigou-Knight-Downs and Braess Paradoxes. We show that these paradoxes are specific examples of more general...

We analyze Varian's (1980) Model of Sales, and show that when the number of uninformed consumers increases, prices become less competitive for all consumers. Thus, the influx of uninformed consumers generates a negative externality increasing prices paid by informed consumers.

Many firms divide the price a consumer pays for a good into two pieces---the price for the item itself and the price for shipping and handling. With fully rational customers, the exact division between the two prices is irrelevant---only the total price matters. We test this hypothesis by...

We study, both theoretically and in the lab, the performance of open outcry debt and equity auctions in the presence of both private information and hidden e¤ort in an independent private value setting. We characterize symmetric equilibrium bidding strategies and show that these lead to e¢...

We provide a unified treatment of alternative models of information acquisition/transmission that have been advanced to rationalize price dispersion in online and offline markets for homogeneous products. These different frameworks -- which include sequential search, fixed sample search, and...

We study the impact of the Euro on prices charged by online retailers within the EU. Our data spans the period before and after the Euro was introduced, covers a variety of products, and includes countries inside and outside of the Eurozone. After controlling for cost, demand, and market...

The market values of online platforms, such as Yahoo, stem from their ability to monetize the clicks they generate for firms advertising on their sites. We exploit a unique dataset on clicks from one of Yahoo's price comparison sites to estimate the determinants of clicks received by online...

This paper presents theory and experiments to investigate how network architecture influences route-choice behavior by comparing outcomes across several different networks. The network changes we consider are based on abstract examples illustrating the Pigou-Knight-Downs and Braess Paradoxes. We...