Budget or target: the choice between input and output
strategies.
In many competitive environments, players need to commit either to
a specific goal they will achieve (an output target) or to the resources
they are willing to expend in pursuit of that goal (an . . .
Optimal incentives for sequential production processes.
I study optimal incentive schemes in organizations where agents
perform their tasks sequentially. I consider a model in which
agents' effort decisions are mapped into the probability of . . .
Monopoly with resale.
We examine the intricacies associated with the design of
revenue-maximizing mechanisms for a monopolist who expects her buyers to
resell. We consider two cases: resale to a third party who does . . .
Reputation and turnover.
We consider a repeated duopoly game where each firm privately
chooses its investment in quality, and realized quality is a noisy
indicator of the firm's investment. We focus on turnover . . .
Coordinating on lower prices: pharmaceutical pricing under
political pressure.
We investigate the effects of political activity on pharmaceutical
prices, focusing on the health care reform period in the early 1990s. We
characterize firms based on their vulnerability to future . . .
Markets, torts, and social inefficiency.(product safety)
We provide a model wherein oligopolists produce differentiated
products that also have a safety attribute. Consumption of these
products may lead to harm (to consumers and/or third parties), . . .
Ownership, incentives, and the hold-up problem.
Vertical integration is often proposed as a way to resolve hold-up
problems. This ignores the empirical fact that division managers tend to
maximize divisional (not firmwide) profit when investing. . . .
Using price distributions to estimate search costs.
We show how the equilibrium restrictions implied by standard search
models can be used to estimate search-cost distributions using price
data alone. We consider both sequential and nonsequential . . .
Explaining the distribution of firm growth rates.
Empirical analyses on aggregated datasets have revealed a common
exponential behavior in the shape of the probability density of
corporate growth rates. We present clear-cut evidence on this . . .
National versus international mergers in unionized
oligopoly.
We analyze how the presence of trade unions affects the pattern of
mergers in an international oligopoly and the welfare implications
thereof. We find that wages for the merger participants are . . .
Field experiments on the effects of reserve prices in auctions:
more Magic on the Internet.
I present experimental evidence on the effects of minimum bids in
first-price, sealed-bid auctions. The auction experiments manipulated
the minimum bids in a preexisting market on the Internet for . . .
Best foot forward or best for last in a sequential
auction?
Should a seller with private information sell the best or worst
goods first? Considering the sequential auction of two stochastically
equivalent goods, we find that the seller has an incentive to . . .
Reputational cheap talk.(private information reporting)
We analyze information reporting by a privately informed expert
concerned about being perceived to have accurate information. When the
expert's reputation is updated on the basis of the report as . . .
Aggressive leaders.(strategic investments)
I characterize the incentives to undertake strategic investments in
markets with Nash competition and endogenous entry. Contrary to the case
with an exogenous number of firms, when the investment . . .
Cooperative investments induced by contract law.
I revisit the economic analysis of contract law for a setting of
cooperative investments. While Che and Chung (1999) have shown that
expectation damages perform rather poorly, I argue that this . . .
Damaged durable goods.(incentives calculations)
I analyze a durable-goods monopolist's incentives to introduce
a damaged good (a stripped-down version of the original good) in an
infinite-horizon framework. The damaged good helps the monopolist . . .
Incentives, wages, and promotions: theory and evidence.
I study an incentive problem that has been largely ignored in the
agency literature: incentives for repeated (human capital) investment.
The optimal contract is very simple but still provides rich . . .
Partial cross ownership and tacit collusion.
We examine the effects that passive investments in rival firms have
on the incentives of firms to engage in tacit collusion. In general,
these incentives depend in a complex way on the entire . . .
Sequential auctions: theory and evidence from the Seattle Fur
Exchange.
We develop a model that incorporates salient features of the
Seattle Fur Exchange: identical lots of furs are auctioned sequentially,
bids must be raised by specified increments, and the winner of . . .
Predation and its rate of return: the sugar industry,
1887-1914.(American Sugar Refining Co.)
We show that the price wars following two major entry episodes were
predatory. Our proof is twofold: by direct comparison of price to
marginal cost, and by construction of a lower bound to . . .
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