This paper presents a framework to analyze the potential changes in transaction costs due to theintroduction of e-commerce on transactions between businesses. It then illustrates and applies thisframework using internal data from an Internet-based firm to measure process improvements,marketplace...

We analyse firms' incentives to provide two-way compatibility between two network goodswith different intrinsic qualities. We study how the relative importance of verticaldifferentiation with respect to the network effect influences the price competition as well as thecompatibility choice. The...

We present evidence on social incentives in the workplace, namely on whether workers’ behavioris affected by the presence of those they are socially tied to, even in settings where thereare no externalities among workers due to either the production technology or the compensationscheme in...

Large companies are usually organized into business units, yet some activitiesare almost always centralized in a company-wide functional unit. We firstshow that organizations endogenously create an incentive conflict between functionalmanagers (who desire excessive standardization) and...

In this paper we analyze how the technology used by downstream firms can influence inputand output market prices. We show via an example that both these prices increase under adecreasing returns technology while the contrary holds when the technology is constant....