We develop a parametric model in which a high-quality dominant firm faces a low-quality competitive fringe. We show that in this model, an increase in the dominant firm's product quality increases total welfare and consumer surplus. An increase in fringe firm quality has an ambiguous effect on...

There is an extensive existing literature on the cost efficiency of banking institutions that estimates cost inefficiencies of the order of 15 to 30%. The persistence of such staggering inefficiencies is surprising given the competitive nature of the industry. Using a novel estimation framework...

The diffusion of knowledge generates positive externalities if knowledge flows increase the productivity of Research and Development (R&D) by the recipients of these flows. This paper investigates the extent to which this positive spillover effect of knowledge diffusion depends on the similarity...

We use geocoded administrative data from Texas on all business establishments to estimate the effects of localization economies on the spatial persistence of industrial employment for the software industry. We decompose this persistence into components arising from entry rates, firm growth, and...

We examine bidding in a rare book sequential auction that has features of a natural experiment: lots were arranged in alphabetical order, the reserve set non-strategically and half the bids placed by mail-in bidders. We distinguish between the effects induced by the print order of the catalogue...

Many firms are undertaking environment-friendly organizational change by applying the philosophy of total quality management with its emphasis on reducing waste and increasing efficiency. Their objective is to improve their management of pollution and increase customer satisfaction. This article...

The increasing reliance of environmental policy on market-based incentives has led firms to shift from regulation-driven management approaches to proactive strategies involving the voluntary adoption of environmental management systems (EMSs). We examine the factors leading to differences in the...

We study a common value auction in which two bidders compete for an item the value of which is a function of three independent characteristics. Each bidder observes one of these characteristics, but one of them is 'naive' in the sense that he does not realize the other bidder's signal contains...

This paper demonstrates that a seller prefers to exclude final consumers from an auction and sell only to resellers when these resellers can gain access, at a cost, to a sufficiently bigger market than the seller himself. The intuition is that resellers recoup their expenses for marketing the...

We study how the sequential formation of free trade areas affects trade flows between member countries. In a three-country, three-good model of comparative advantage if two countries have an FTA, and both sign a similar agreement with the third, trade between the two decreases. However, if only...