We conduct a field experiment in a large retail chain to test basic predictions of tournament theory regarding prize spread and noise. A random subset of the 208 stores participates in two-stage elimination tournaments. Tournaments differ in the distribution of prize money across winners of the...

We ran a field experiment in a Dutch retail chain consisting of 128 stores. In a random sample of these stores, we introduced short-term sales competitions among subsets of stores. We find that sales competitions have a large effect on sales growth, but only in stores where the store's manager...

We compare reported job satisfaction with vignette evaluations of hypothetical jobs by using a British, Greek and Dutch data set, containing 95 randomly assigned vignettes. In order to test comparability of international data sets recently the method of anchoring vignettes has been introduced by...

This paper extends the static analysis of oligopoly structure into an infinite-horizon setting with sunk costs and demand uncertainty. The observation that exit rates decline with firm age motivates the assumption of last-in first-out dynamics: An entrant expects to produce no longer than any...

This paper considers the effects of raising the cost of entry for a potential competitor on infinite-horizon Markov-perfect duopoly dynamics with ongoing demand uncertainty. All entrants serving the model industry incur sunk costs, and exit avoids future fixed costs. We focus on the unique...

The supposed irrelevance of historical costs for rational decision making has been the subject of much interest in the economic literature. In this paper we explore whether individual decision making under risk is affected by the cost of the supplied information. Outside of the lab, it is...

According to standard economic wisdom, fixed costs should not matter for pricing decisions. However, outside economics, it is widely accepted that firms need to increase their prices after a fixed cost rise. In this note, we show that a liquidity-constrained firm that maximizes lifetime profits...

We apply theories of capital market failure to ana1yzeoptima1 financing of risky higher education. In the market solution,students can only finance their education through debt. There isunderinvestment in human capita1, because some students with socia1lyprofitable investments in human capita1...

We provide evidence from a large-scale field experiment on the causal effects of audit rules on compliance in a market for long-term care. In this setting care should be provided quickly and, therefore, the gatekeeper introduced ex-post auditing. Our results do not show significant effects of...