The long-run evolution of per-capita income exhibits a structural breakoften associated with the Industrial Revolution. We follow Mokyr (2002) and embedthe idea that this structural break reflects a regime switch in the evolution of technologicalknowledge into a dynamic framework, using Airy...

We study the effect of hyperbolic discounting on competitive equilibria in secondary markets for a durable good. Under exponential discounting, secondary markets are irrelevant in our model. They do not affect the price in the initial period and are neutral to the allocation. Under hyperbolic...

Digital technology has dramatically changed the structure of many industrial sectors. The rise of the Internet and increased broadband access have given rise to new business models and strategies for firms dealing with both electronic and physical goods. Industrial Organization and the Digital...

The paper formalizes the observation that submarkets for high-quality and low-quality variants are markedly different from each other. We study a simple model where variants of low quality cannot be horizontally differentiated, whereas customers disagree about the value of variants in the...

In a three-stage duopoly game with product design at stage 1, advertising & marketing at stage 2, and price competition at stage 3, advertising & marketing enable customers to distinguish the goods from each other thus relaxing price competition. The subgame perfect equilibria of the three stage...

Two one-product firms compete in prices on a market with differentiated products. Goods are differentiated because customers switch from one good to the other at different relative prices. With the specification that mean demand in the market is unit-elastic 1 pro vide conditions on the shape of...

Models of product differentiation try to provide answers to the question which good will be provided in an imperfectly competitive market and how it will be priced. In such models consumers have been modeled as buying one unit of one good in the market. I construct counterparts to frequently...

With differentiated goods and heterogenous consumers, firms set prices above marginal costs when product choice is endogenous. When consumer tastes are identical and all consumers prefer one possible variant to all other possible variants at the marginal costs of production, then all firms...

We consider a market in which producers and an intermediary have perfect information about the qualities of the goods. Consumers do not observe the qualities. Producers can perfectly reveal that a good is of high quality through certification. This entails socially wasteful costs. Firms can...

Firms willing to enter a market with a new product often face the problem that the market does notknow its quality. Selling through a retailer might avoid excessive entry costs by renting thereputation of an incumbent. The incumbent can apply excusive dealing clauses to his retailer. Weshow that...