The main goal of this paper is to develop an empirical framework for evaluating the patient welfare benefits arising from pharmaceutical innovation. Extending previous studies of the welfare benefits from innovation (Trajtenberg, 1990; Hausman, 1996), this paper unpacks the separate choices made by...

This paper evaluates the sources of transitory market power in the market for personal computers (PCs) during the late 1980's. Our analysis is motivated by the coexistence of low entry barriers into the PC industry and high rates of innovative investment by a small number of PC manufacturers. We...

This paper studies the consequences of physician authority on pharmaceutical prescribing. Physicians engage in a costly process of particular conditions and characteristics. The relative efficiency of this matching process results from the diagnostic skill of the physician along with the...

July 12, 1995

power of our framework using several large-scale Monte Carlo experiments.

This paper uses a model of endogenous sunk cost (ESC) competition to explain the industrial structure of the supermarket industry, where a few powerful chains provide high quality products at low prices. The predictions of this model accord well with the features of the supermarket industry...