This paper refers to herding behaviour as developed in Bikhchandani et al. (1992), Bannerjee (1992) and Choi and Scarpa (1994). We examine the behaviour of a potential customer who does not know how many of her predecessors decided not to purchase the product. We show that, ceteris paribus, a...

In this paper we try to explain how price discrimination can cause bilateral trade patterns of the type seen under countertrade agreements. We interpret countertrade as a form of transaction bundling which can discriminate between potential trading partners and we combine characteristics from...

The purpose of this paper is to analyze from a law and economics perspective, two issues that have become increasingly prominent in Europe and East Asian relations. The first is that of product origin, and includes the issue of Japanese automobile “transplants†in Europe. The second is...

In 2011, China continues to be the world’s largest recipient of direct foreign investment—which in 2010 totaled US$105 billion. China is also the world’s second largest economy after the U.S. Once a staunchly Communist state, China now advocates a “social market...

Different societies use different mechanisms to assist people or organizations achieve cooperation. The purpose of this paper is to compare three different approaches to achieving cooperation. They are a contractual approach widely used in Anglo-Saxon societies, a trust approach more common in...