I examine the dynamics of oligopolies when fi rms derive subjective value from being the market leader. In equilibrium, prices alternate in tandem between high levels and occasional price wars, which take place when market shares are similar and market leadership is at stake. The stationary...

Taking the early U.S. automobile industry as an example, we evaluate four competing hypotheses on regional industry agglomeration: intra-industry local externalities, inter-industry local externalities, employee spinouts, and location fixed-effects. Our findings suggest that inter-industry...

Critics of Microsoft and Google's dominance claim these companies are nothing but "giants standing on the shoulders of babies," whose dominance destroys the incentives for entrants to innovate. By contrast, pro-Microsoft and pro-Google analysts stress the benefits of large, innovative firms. We...

In a competitive environment, switching costs have two eects. First, they increase the market power of a seller with locked-in customers. Second, they increase competition for new customers. I provide conditions under which switching costs decrease or increase equilibrium prices. Taken together,...

I develop a theory of corporate reputation as a source of sustainable competitive advantage. I show how a relatively simple and reasonable assumption regarding the dynamics of corporate reputation leads to a self-reinforcing process whereby cross-firm differences in corporate reputation (and...

We run a series of controlled field experiments on eBay where buyers are rewarded for providing feedback. Our results suggest that the feedback rate increases when a rebate is given, though the effect is small. Moreover, the nature of buyer feedback is influenced by rewards: buyers are more...

Taking the early U.S. automobile industry as an example, we evaluate four competing hypotheses on regional industry agglomeration: intra-industry local externalities, inter-industry local externalities, employee spinouts, and location fixed-effects. Our findings suggest that inter-industry...

We provide a simple framework to analyze the effect of rm dominance on incentives for Ramp;D. An increase in firm dominance, whichwe measure by a premium in consumer valuation, increases the dominant firm's incentives and decreases the rival firm's incentives for Ramp;D. These changes inuence...

Frequently, new technologies arise under two or more alternative designs. Moreover, the state of each design evolves over time as a result of various cumulative improvements. In this paper, we study the strategic interaction between \incumbentquot; firms (those who already own a design) and...

We provide a simple framework to analyze the effect of firm dominance on incentives for Ramp;D. An increase in firm dominance, which we measure by a premium in consumer valuation, increases the dominant firm's incentives and decreases the rival firm's incentives for Ramp;D. These changes...