Recent work on the economics of the firm and other organizations has emphasized the importance of internal organization and incentives. The issue of competition within the firm has not arisen, however. In this article I construct a model of nonprice competition among members of a professional...

This article provides a formal representation of Telser's (1966) "deep-pocket" argument by considering a model in which the entrant's and the incumbent's financial structures are endogenous. The entrant's financial vulnerability may be explained by informational asymmetries in financial markets....

In this article I shall analyze a principal-agent model with moral hazard and adverse selection. I show that for a large class of environments, communication has no value to the principal and that he cannot do better than to average over the different types of agents. This observation is then...

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In a multistage model of defense procurement we show that a second source of production is often of limited value. In many instances, second sourcing will result in strictly less expected welfare than is generated by sole sourcing.

This article examines the use of prices and warranties as signals of product quality to consumers who choose how to maintain their purchases. The seller's incentives are strongly affected by the interaction of quality and maintenance in determining product reliability. Two different assumptions...

In this article, we analyze the pricing strategies of firms that compete for the demand of an assortment of goods in a complete information static framework. In particular, we model the competition between two symmetric firms in a market that consists of two types of consumers, each of which may...

We identify an important class of economic problems that arise naturally in several applications: the allocation of multiple resources when there are uncertainties in demand or supply, unresponsive supplies (no inventories and fixed capacities), and significant demand indivisibilities...

This article analyzes the market for experience goods when the product's quality is uncertain. Unlike the case of certain product quality, in this setting, a customer who receives a bad product cannot automatically infer that the producer has "cheated." In this two-period model, producers select...

Results from first-price, sealed-bid auctions, in which there is uncertainty regarding the number of bidders, are reported. Consistent with recent theoretical findings, concealing information regarding the number of bidders raises more revenue for the seller than revealing information....