After an unsatisfactory purchase, many firms are quick to apologize to customers. It is, however, not clear why they should do that. As the apology is costless, it should be regarded as cheap talk and thus ignored by the customer. In this paper, we test in a controlled field experiment whether...

In this paper we develop a spatial Cournot trade model with two unequally sized countries, using the geographical interpretation of the Hotelling line. We analyze the trade and welfare effects of international trade between these two countries. The welfare analysis indicates that in this...

This paper considers a spatial discrimination Cournot model with asymmetric demand. We use the geographical interpretation of the linear market and introduce differentiated products. We analyze a location-quantity game and show that agglomeration or dispersed locations may arise, depending on...