This paper presents and analyzes the results of a decision‐making experiment in inventory management under uncertainty. The experiment included 81 participants who played the role of a small car importer facing random demand as in the (Q,R) model. The results show strong evidence of learning...

This paper examines the pricing behavior of a risk‐averse monopolistic firm under demand uncertainty. The firm produces a single good at a constant marginal cost. To facilitate sales, the firm uses a two‐part pricing contract that includes a membership fee and a selling price per unit. The...

We test and cannot reject the hypothesis that retail pricing of natural gas is transparent for commercial and residential customers served by regulated local distribution companies in the United States. The periods of adjustment to a wholesale price change are 1.54 months for the commercial...

We examine strategic delegation in a multiproduct mixed duopoly with nonprofit organization (NPO) and for‐profit organization (FPO). We will demonstrate that the nonprofitable mission service can reduce both the interest conflicts between the NPO and FPO owners and those between the NPO owner...

We conduct two empirical studies to test two hypotheses: (1) rivals' customer satisfaction increases a firm's own customer satisfaction; and (2) rivals' customer satisfaction reduces a firm's sales. Study One uses a panel dataset of annual store‐level customer satisfaction data from a...

The allocation of control rights is a key issue in incomplete contracts. In this paper, we add an exit option, the right of early termination, to the standard agency model for employment contracts. We address two questions: (1) Who should have this right? (2) What is the effect of its inclusion...

This article examines the sensitivity of employment to sales contractions in a negative growth scenario for high‐tech entrepreneurial ventures. Using the lens of transaction cost economics, we move from the centrality of human capital for these firms to theoretically discuss and empirically...

There is great interest in evaluating the impact of private equity investments on innovation and economic growth. However, there is no direct empirical evidence on the effects of such transactions on the innovation strategies of entrepreneurial firms. We fill this gap by examining a rich...