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Armstrong, Mark; Chen, Yongmin - C.E.P.R. Discussion Papers - 2013

We investigate the marketing practice of framing a price as a discount from an earlier price. We discuss two reasons why a discounted price---rather than a merely low price---can make a consumer more willing to purchase. First, a high initial price can indicate the product is high quality....

Persistent link: https://www.econbiz.de/10011083448

Vague Lies: How to Advise Consumers When They Complain

Drugov, Mikhail; Troya Martinez, Marta - C.E.P.R. Discussion Papers - 2012

This paper analyzes the incentives of a seller to provide (un)biased and (im)precise advice about a complex product such as insurance, banking and telecommunication services. Misleading the buyers by biasing the advice upwards increases the revenues but also the expected fine imposed by the...

Persistent link: https://www.econbiz.de/10011083992

Financial Advice and Stock Market Participation

Georgarakos, Dimitris; Inderst, Roman - C.E.P.R. Discussion Papers - 2014

We introduce professional financial advice in households’ choice to hold risky financial assets. Consistent with the predictions from a formal model, we present evidence that households’ trust in financial advice only matters when their perceived own financial capability is low. Instead, for...

Persistent link: https://www.econbiz.de/10011084072

Add-on Pricing, Naive Consumers, and the Hidden Welfare Costs of Education

Kosfeld, Michael; Schüwer, Ulrich - C.E.P.R. Discussion Papers - 2011

Previous research shows that firms shroud high add-on prices in competitive markets with naive consumers leading to inefficiency. We analyze the effects of regulatory intervention via educating naive consumers on equilibrium prices and welfare. Our model allows firms to shroud, unshroud, or...

Persistent link: https://www.econbiz.de/10009367427

Macroeconomic Consequences of Terror: Theory and the Case of Israel

Eckstein, Zvi; Tsiddon, Daniel - C.E.P.R. Discussion Papers - 2004

relative to the present is reduced. Hence, due to a rise in terror activity, investment goes down, and in the long run income …

Persistent link: https://www.econbiz.de/10005504271

Decentralized Trade, Entrepreneurial Investment and the Theory of Unemployment

Coles, Melvyn G - C.E.P.R. Discussion Papers - 1996

and investment, so it may take some time before an unemployed worker finds a job. Wages are determined by bargaining. A … subsidize entrepreneurial investment (there is a wage bargaining distortion and a search externality), simulations show that the …

Persistent link: https://www.econbiz.de/10005504418

Death and Development

Lorentzen, Peter L.; McMillan, John; Wacziarg, Romain - C.E.P.R. Discussion Papers - 2005

fertility, and lower investment in physical and human capital. Furthermore, the feedback effect from economic prosperity to …

Persistent link: https://www.econbiz.de/10005504520

Natural Resources and Economic Growth: The Role of Investment

Gylfason, Thorvaldur; Zoega, Gylfi - C.E.P.R. Discussion Papers - 2001

and investment. When the share of output that accrues to the owners of natural resources rises, the demand for capital … allocation of capital may, however, enhance the quantity as well as the quality of new investment and sustain growth. Empirical … thereby inhibiting economic growth. The results also suggest that abundant natural resources may hurt saving and investment …

Persistent link: https://www.econbiz.de/10005504629

External Debt and Political Instability

Ozler, Sule; Tabellini, Guido - C.E.P.R. Discussion Papers - 1991

This paper provides a theoretical and empirical analysis of the role played by domestic political incentives in the accumulation of large external debts by developing countries between 1972 and 1981. The theoretical model characterizes two equilibrium regimes. In one the borrower is on its...

Persistent link: https://www.econbiz.de/10005504639

Monetary Policy in an Open Economy: The Differential Impact on Exporting and Non-Exporting Firms

Ber, Hedva; Blass, Asher; Yosha, Oved - C.E.P.R. Discussion Papers - 2002

Using firm-level data, we provide evidence that, although monetary policy affects real investment, the effect operates …

Persistent link: https://www.econbiz.de/10005504673