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Rotemberg and Imperfect Common Knowledge : A Solution Algorithm

Šauer, Radek - 2020

This paper develops an algorithm that enables to solve macroeconomic models with Rotemberg pricing and imperfect common … knowledge. Under the concept of imperfect common knowledge, Rotemberg pricing requires the solution algorithm to take prices … algorithm has to search for the policy function of the aggregate price and for the policy function of the firm-specific price …

Persistent link: https://www.econbiz.de/10012841148

Collusion by Algorithm : The Role of Unobserved Actions

Martin, Simon; Rasch, Alexander - 2022

We analyze the effects of better algorithmic demand forecasting on collusive profits. We show that the comparative statics crucially depend on the whether actions are observable. Thus, the optimal antitrust policy needs to take into account the institutional settings of the industry in question....

Persistent link: https://www.econbiz.de/10013296270

Collusive Compensation Schemes Aided by Algorithms

Martin, Simon; Schmal, Wolfgang Benedikt - 2021

Sophisticated collusive compensation schemes such as assigning future market shares or direct transfers are frequently observed in detected cartels. We show formally why these schemes are useful for dampening deviation incentives when colluding firms are temporary asymmetric. The relative...

Persistent link: https://www.econbiz.de/10013310765

Aversion to Hiring Algorithms : Transparency, Gender Profiling, and Self-Confidence

Dargnies, Marie-Pierre; Hakimov, Rustamdjan; Kübler, … - 2022

We run an online experiment to study the origins of algorithm aversion. Participants are either in the role of workers … in the role of a manager or by an algorithm. In a second set of experiments, managers choose whether they want to … delegate their hiring decisions to the algorithm. In the baseline treatments, we observe that workers choose the manager more …

Persistent link: https://www.econbiz.de/10014244326

Dynamic Ic and Dynamic Programming

Kwon, Suehyun - 2019

This paper develops a dynamic programming method when the one-stage deviation principle in the sense of mechanism design literature doesn’t hold. The commonly used dynamic programming method is valid only if the one-stage deviation principle in the sense of mechanism design literature is...

Persistent link: https://www.econbiz.de/10012889686

Exploiting Symmetry in High-Dimensional Dynamic Programming

Kahou, Mahdi Ebrahimi; Fernández-Villaverde, Jesús; … - 2021

with a large (but finite) number of heterogeneous agents using deep learning. The „curse of dimensionality“ is avoided due … the most generalizable over-parameterized deep learning approximation without calculating the stationary distribution or …

Persistent link: https://www.econbiz.de/10013221172

Optimal Epidemic Suppression Under an ICU Constraint

Miclo, Laurent - 2020

How much and when should we limit economic and social activity to ensure that the health-care system is not overwhelmed during an epidemic? We study a setting where ICU resources are constrained while suppression is costly (e.g., limiting economic interaction). Providing a fully analytical...

Persistent link: https://www.econbiz.de/10012833733

Pay What You Want as a Marketing Strategy in Monopolistic and Competitive Markets

Schmidt, Klaus; Spann, Martin; Zeithammer, Robert - 2014

seller competes with a traditional seller. Finally, we endogenize the market structure and let sellers choose their pricing … PWYW pricing strategy. We discuss the implications of these results for the use of PWYW as a marketing strategy. …

Persistent link: https://www.econbiz.de/10010435768

Demand Estimation Using Managerial Responses to Automated Price Recommendations

Garcia, Daniel; Tolvanen, Juha; Wagner, Alexander K. - 2021

-function approach to two classic questions in the dynamic pricing literature: the evolution of price elasticity of demand over time as …

Persistent link: https://www.econbiz.de/10012599214

Gender and Collusion

Haucap, Justus; Heldman, Christina; Rau, Holger Andreas - 2022

Many cartels are formed by individual managers of different firms, but not by firms as collectives. However, most of the literature in industrial economics neglects individuals’ incentives to form cartels. Although oligopoly experiments reveal important insights on individuals acting as firms,...

Persistent link: https://www.econbiz.de/10013296722