We analyze the effect of different pricing schemes on horizontally differentiated firms' ability to sustain collusion when customers have the possibility to combine (or mix) products to achieve a better match of their preferences. To this end, we compare two-part tariffs with linear prices and...

This paper studies static rational inattention problems with multiple actions and multiple shocks. We solve for the optimal signals chosen by agents and provide tools to interpret information processing. By relaxing restrictive assumptions previously used to gain tractability, we allow agents...

In the face of capacity disruptions (due, for example, to traffic incidents or poor weather), information provision and congestion pricing are alternative alleviating policies. A state-dependent toll equals the state-dependent marginal external cost (MEC), which is higher if traffic condition is...

This paper highlights the moderating effect of retailer CSR perception and CSR contribution type on the relationship between advertised reference price (ARP) and consumer evaluations. A two-by-three between-subjects factorial design is employed with the manipulation of ARP and CSR contribution...

This paper discusses the role of secret versus public reserve prices when bidders’ valuations depend positively on the seller’s private signal. A public reserve price is announced before the auction starts, and a secret reserve price is disclosed after the highest bid has been reached. The...

Virtual cross-border medical tourism allows many residents in the United States to purchase brand name medicines from companies in Mexico without travelling there. Monthly economic reports indicate that the online brand name pharmaceutical product prices in Mexico are noticeably lower than the...

Manufacturers often engage in practices that impede consumer search. Examples include proliferating product varieties, imposing vertical informational restraints, and banning online sales to make it more difficult for consumers to compare prices. This paper models vertical bargaining over...

We study an optimal liquidation problem with multiplicative price impact in which the trend of the asset's price is an unobservable Bernoulli random variable. The investor aims at selling over an infinite time-horizon a fixed amount of assets in order to maximize a net expected profit...

This paper studies nonparametric identification and counterfactual bounds for heterogeneous firms that can be ranked in terms of productivity. Our approach works when quantities and prices are latent, rendering standard approaches inapplicable. Instead, we require observation of profits or other...

This paper investigates the presence of the bubbles that are experienced in the global vanilla (VNL) price, using the GSADF approach. The results show that there are five bubbles in the VNL price that are driven by specific reasons. Also, in this regard, the opening and ending points of each...

Using CPI micro data for 11 euro area countries covering about 60% of the euro area consumption basket over the period 2010-2019, we document new findings on consumer price rigidity in the euro area: (i) each month on average 12.3% of prices change, which compares with 19.3% in the United...

This note provides an update of social protection responses to the food, fuel, fertilizer, and other price shocks sparked or accelerated by the Ukraine war. The vast majority of measures were introduced in early 2022 (February-April), although some specific interventions to mitigate prices were...

Prices are among the most frequently discussed topics in consumer research. Although word-of-mouth is known to be highly influential and it is considered to be of growing importance, previous research has largely neglected price-related word-of-mouth, especially in a cross-cultural context. The...

Using CPI micro data for 11 euro area countries covering about 60% of the euro area consumption basket over the period 2010-2019, we document new findings on consumer price rigidity in the euro area: (i) each month on average 12.3% of prices change, which compares with 19.3% in the United...

Integrating the health services and insurance industries (HMOs) could lower expenditure by reducing either the quantity of services or unit price. We compare the treatment of heart attacks and newly diagnosed chest pain in HMOs and traditional plans in two data sets. The nature of these health...

In the context of subscription-based services, many technologies improve over time and service providers can provide increasingly powerful service upgrades to their customers, but at a launching cost, and the expense of the sales of existing products. We propose a model of technology upgrades...

After a purchase, customers increasingly feel more comfortable sharing their experience in the form of online product reviews, which help resolve future buyers' valuation uncertainty for that product. On the other hand, retailers offer lenient return policies that also help with customers'...

Over the past couple of years, many competition and antitrust scholars have feared the dawn of ‘algorithmic collusion’. Some have thus suggested expanding the notions of ‘collusion’ and ‘agreement’ in order to capture such coordination. Rather than using an expansive reading of...

We analyze the effect of mergers on various aspects of airline performance during the period 1970-84, using a panel data set constructed by Caves et al. Estimates derived from a simple "matched pairs" statistical model indicate that these mergers were associated with reductions in unit cost. The...

This paper develops a unified analysis of the impacts of production delays on aggregate price fluctuations in a continuous-time cobweb-type model. We find that the time inconsistency between demand and supply due to production delays inherently generates an overshooting effect in prices. Large...

In this paper, we examine the role of demand forecast information for price-setting newsvendors. In our model, the newsvendor faces stochastic demand that is price-sensitive, has the discretion of setting the retail price, and receives some informative signal that helps the quantity decision....

This paper studies how horizontal mergers between cable providers impact the vertical contracting outcomes (per-subscriber fees that TV cable providers pay the upstream content creators) and consequently the prices and composition of bundles that cable providers offer to end consumers. The...

Many manufacturers invest in advanced services and solutions to achieve superior customer value; however, research has only begun to examine capabilities for value-based pricing (VBP) and value-based selling (VBS) in relation to such offerings. This article explores (1) which capabilities firms...

Due to the availability of data-driven customer profiling, many firms (e.g., Amazon) have adopted personalized pricing in practice. We consider a joint dynamic personalized pricing-inventory control problem for a firm that sells a single product to multiple customer segments over a finite...

One of the most fundamental questions in public finance is who bears the burden of taxes -- the incidence of taxation.' Our understanding of incidence from an empirical standpoint is quite meager. Indeed, there seems to be little evidence even in the case that is theoretically the easiest --...

In this paper, we study the contextual dynamic pricing problem where the market value of a product is linear in their observed features plus some market noise. Products are sold one at a time, and only a binary response indicating the success or failure of a sale is observed. Our model setting...

This paper studies exchange rate behavior in models with moving long-run equilibria incorporating alternative price-adjustment mechanisms.The paper demonstrates that price-adjustment rules proposed by Mussa andby Barro and Grossman yield models that are empirically indistinguishable from each...