RAND Journal of Economics

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Information and the hold-up problem.
We examine situations in which a party must make a sunk investment prior to contracting with a second party to purchase an essential complementary input. We study how the resulting hold-up problem i . . .

A welfare analysis of spectrum allocation policies.(Company overview)
Economic analysis of spectrum policy focuses on government revenues derived via competitive bidding for licenses. Auctions generating high bids are identified as "successful" and those with lower re . . .

Avoiding market dominance: product compatibility in markets with network effects.
As is well recognized, market dominance is a typical outcome in markets with network effects. A firm with a larger installed base offers a more attractive product which induces more consumers to buy . . .

Liability insurance under the negligence rule.
We incorporate the concept of evidentiary standard to the analysis of the negligence rule under liability insurance and court errors. When the postaccident evidence is privately contractible and not . . .

Influencing the influencers: a theory of strategic diffusion.
The growth of the Internet and assorted technologies has made it possible to collect and process detailed information on social networks. This article investigates how firms (and governments) can ha . . .

Contracting in the shadow of the law.
Economic models of contract typically assume that courts enforce obligations based on verifiable events (corresponding to the legal rule of specific performance). As a matter of law, this is not the . . .

Comparative advertising: disclosing horizontal match information.
Improved consumer information about horizontal aspects of products of similar quality leads to better consumer matching but also to higher prices, so consumer surplus can go up or down, while profit . . .

Do retail gasoline prices respond asymmetrically to cost shocks? The influence of Edgeworth Cycles.
Asymmetric price cycles similar to Edgeworth Cycles are appearing in increasingly many retail gasoline markets in the United States and worldwide. The asymmetry in the cycles can give rise to a find . . .

Erratum.(Correction notice)
Due to an error in the RAND Journal of Economics 38:4 on page 1105, an equation printed incorrectly. The corrected equation appears below. [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII]. . . .

Price discrimination in input markets.
We analyze the short- and long-run implications of third-degree price discrimination in input markets. In contrast to the extant literature, which typically assumes that the supplier is an unconstra . . .

An empirical investigation of the welfare effects of banning wholesale price discrimination.
Economic theory does not provide sharp predictions on the welfare effects of banning wholesale price discrimination: if downstream cost differences exist, then discrimination shifts production ineff . . .

Managerial hedging, equity ownership, and firm value.
Suppose risk-averse managers can hedge the aggregate component of their exposure to firm's cash-flow risk by trading in financial markets but cannot hedge their firm-specific exposure. This gives th . . .

Market participation in delegated and intrinsic common-agency games.
We study how competition in nonlinear pricing between two principals (sellers) affects' market participation by a privately informed agent (consumer). When participation is restricted to all or noth . . .

Efficient tournaments within teams.
We analyze incentive problems in team and partnership structures where the only available information to condition a contract on is a partial and noisy ranking which specifies who comes first in eff . . .

Vertical restraints and horizontal control.
This article considers vertical restraints in a setting in which duopoly retailers each sell more than one manufactured good. Vertical restraints by a dominant manufacturer enable the firm to acquir . . .

Corporate fraud and investment distortions in efficient capital markets.
Inefficient investment allocation induced by corporate fraud, where informed insiders strategically manipulate outside investors' beliefs, has been endemic historically and has recently attracted mu . . .

Costly participation and heterogeneous preferences in informational committees.
Informational committees are groups of people who are designated to gather information. This article develops a simple model of committee size based on costly participation and preference heterogene . . .

Coordination and delay in hierarchies.
This article studies hierarchical organizations where concerns for fast execution are important and employees must be coordinated to avoid wasteful duplications of effort. Simple conditions are prov . . .

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