Cigarettes are experience goods - most of their utility value only gets revealed when one consumes them. We hypothesize a three phase consumer life cycle for experience goods. Consumers initially do not know their utility from the good or their preferences for particular characteristics, and may...

Cigarettes are experience goods - most of their utility value only gets revealed when one consumes them. We hypothesize a three phase consumer life cycle for experience goods. Consumers initially do not know their utility from the good or their preferences for particular characteristics, and may...

We develop and test a pricing model for a monopolist that sells an addictive good. The model illustrates the conditions under which a monopolist lowers the price he charges youth when a future tax is imposed. Using household survey data, we investigate whether individuals use “cents-off”...

In this study, we develop and estimate a model of sophisticated bargaining between hospitals and insurers, based on a model of intrafirm bargaining set out by Stole and Zwiebel (1996). When an insurer decides whether to include a hospital in its network, it must take into account the fact that...