We derive the closed-form solution that characterizes the equilibrium in the circular city model, when competing firms have heterogeneous production costs. Tractability issues in this setting are well-known and have not been resolved in prior work. In this paper, the equilibrium solution...

Transaction cost theory has largely considered specific investments as exogenous, leading to calls for studying them as endogenous decisions. We examine firms' specific investment decisions through a game-theoretic model of bilateral, sequential decisions in an extant franchisor-franchisee...

This paper provides a theory of rationing where rationing functions as an effective mechanism for second degree price discrimination by a monopoly seller. When a seller charges multiple prices on homogenous products to all consumers, supply at the lowest price is limited and rationed among...

Third-party sellers in online marketplaces provide wide product/service variety and are highly heterogeneous in the capability of delivering value to buyers. Seller variety and value heterogeneity shape seller competition, which then affects the marketplace owner’s profit. This paper presents...

The relationship between brand equity and channel governance is recognized in practice and is of particular interest to senior managers. However, research in marketing on this topic is limited and practitioners and scholars seem divided on the nature of this relationship. To guide practice and...

This paper examines a monopoly platform's two-sided pricing strategies in a setting with seller competition, which gives rise to not only positive cross-side network effects between buyers and sellers, but also a negative same-side network effect among sellers. We show that platform pricing...

We analyze project choice in the motion pictures industry and find evidence consistent with revenue maximization and excessive hedging. We focus on the production of violent films and films that feature sex and violence. We find that such movies do not provide excess returns, but they increase...

The large literature on the impact of advertising on consumers and firm behavior in marketing and economics has tried to distinguish between the informative and the persuasive roles of advertising. The extant literature typically uses advertising expenditure and implicitly assumes that...

This paper presents a model of contracts for the sale of intellectual property. We explain why many intellectual property contracts are contingent on eventual production or success, even without moral hazard on the part of risk-averse sellers. Our explanation is based on differences of opinion...

This paper presents a model of intellectual property contracts. We explain why many intellectual property contracts are contingent on eventual production or success, even without moral hazard on the part of risk-averse sellers. The explanation is based on differences of opinion between buyers...