We propose a model describing consumer demand for a luxury good, in which the perceived quality of the good is related to its exclusivity, that in turn depends on the number of consumers buying it. We use this model to analyze the optimal production and price setting decisions of a luxury good...

We compare the concept of Economic Value Added (EVA) with the traditional Discounted Cash Flows (DCF) method of investment appraisal. We find that DCF suffers from dynamic inconsistency and may approve suboptimal investment decisions. In contrast, EVA does not suffer from these shortcomings and...

We present a simple model describing the relationship between two main effects of vertical integration - raising rivals' costs (RRC) and elimination of double marginalization (EDM) - in a differentiated product setting. We find that RRC and EDM are intrinsically linked: the same force creates an...