We show that a monopolist's problem of optimal advance selling strategy can be mathematically transformed into a problem of optimal bundling strategy if four conditions hold: i. consumers and the firm agree on the probability of the states occurring, ii. the firm pre-commits to the spot prices...

We examine a multinational firm which has a decreasing marginal cost, and the optimal sales tax policies of the regions where that firm operates. We show that the regions set higher sales taxes than those given by a cooperative equilibrium. Each region fails to fully internalize the effects of...

Debate over the U.S. federal estate tax has intensified recently as a result of the sunset provisions in the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 and changes in law passed in conjunction with the "fiscal cliff" at the end of 2012. Despite recent changes in the law,...

This paper analyzes the strategic use of bilateral supply contracts in sequential negotiations between one manufacturer and two differentiated retailers. The first main result is that, despite the feasibility of general supply contracts which are functions of own quantity (but cannot be...

While considering differentiated products for purchasing decisions, it is costly for consumers to obtain the necessary information to weigh the various alternatives. The vast amount of information available online has revolutionized the way firms present consumers with product options....

Non-compliance with medication therapy remains an unsolved and expensive problem for health care systems around the world. Yet we know little about the factors that determine a patient's decision to follow treatment recommendations. This study uses a unique panel dataset comprising all...

type="main" <p>When consumers search for differentiated products, a given search decision can be explained either by low search cost or by low tastes for the set of products already found. We propose an identification strategy that allows to estimate the search cost distribution in the presence of...</p>

In this paper we estimate a structural model of search for differentiated products, using a unique dataset of individual search histories for hotels online. We propose and implement an identification strategy that allows to separately estimate consumer's beliefs, search costs and preferences....

In this paper, we emphasize that choice sets generated by a search process have two properties: first, they are limited; second, they are endogenous to preferences. Both factors lead to biased estimates in a static demand framework that takes choice sets as given. To correct for this bias, we...

This article is an empirical application of the search model with an unknown distribution, as introduced by Rothschild in 1974. For searchers who hold Dirichlet priors, we develop a novel characterization of optimal search behavior. Our solution delivers easily computable formulas for the...