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. When the seller lacks such commitment power, however, there instead exists an equilibrium in which the seller's expected …
Persistent link: https://www.econbiz.de/10010332208
It is often touted that decisiveness is one of the most important qualities to be possessed by leaders, broadly defined. To see how and why decisiveness can be a valuable asset in organizations, we construct a model of strategic information transmission where: (i) a decision maker solicits...
Persistent link: https://www.econbiz.de/10010332366
This paper explores the consequences and implications of the dual role of promotion in an environment where a firm must simultaneously achieve two distinct goals - assignment and incentive provision - via the strategic use of promotions. We argue that the efficient promotion rule is generally...
Persistent link: https://www.econbiz.de/10010332465
recursive equilibrium structure under no commitment which can be exploited to obtain a full characterization of equilibrium. The … analysis allows us to evaluate the exact value of commitment for any given set of parameters and provides insight into when it …
Persistent link: https://www.econbiz.de/10012013628
The search for new ideas by profit-seeking firms and knowledge spillovers are well-known and fundamental sources of modern economic growth. This paper examines the implications of idea production and knowledge capital for monetary business cycles. We construct a sticky-wage model where workers...
Persistent link: https://www.econbiz.de/10013349602
Following the shocks of the COVID-19 pandemic, the economy may be significantly changed relative to the pre-pandemic world. One critical shift induced by the COVID- 19 pandemic is a need for physical distance (at least 6 feet apart) between workers and customers. In this study, we examine the...
Persistent link: https://www.econbiz.de/10013349606
When faced with economic stagnation, innovation, product innovation in particular, is often cited as an effective stimulus because it is thought to encourage household consumption and lead to higher demand. Using a secular stagnation model with wealth preference, we examine the effects of...
Persistent link: https://www.econbiz.de/10014540495
Does trade affect the equilibrium rate of unemployment? To theoretically examine this question, we incorporate firm-union bargaining considerations into a model with a booming external sector and a stagnating manufacturing sector. In the model, a sustained improvement in the terms of trade...
Persistent link: https://www.econbiz.de/10010332190
We propose a microeconomic foundation of the multiplier effect and that of the consumption function using a dynamic optimization model that explains a shortage of aggregate demand and unemployment. We show that government purchases boost aggregate demand through a multiplier-like process but...
Persistent link: https://www.econbiz.de/10010332220
In a Diamond-type overlapping-generations setting public debt issuance places no burden on future generations including those who repay the debt if prices and wages are fixed and unemployment occurs in the periods in which public bonds are issued and repaid. Whether the collected fund is spent...
Persistent link: https://www.econbiz.de/10010332241