A large variety of markets, such as retail markets for gasoline or mortgage markets, are characterized by a small number of firms offering a fairly homogenous product at virtually the same cost, while consumers, being uninformed about this cost, sequentially search for low prices. The present paper provides a theoretical examination of this type of market, and confronts the theory with data on ...

In this laboratory experiment we study the use of strategic ignorance to delegate real authority within a firm. A worker can gather information on investment projects, while a manager makes the implementation decision. The manager can monitor the worker. This allows her to exploit any information gathered by the worker, but also reduces the worker’s incentives to gather information in the first...

Various economic theories yield quite opposite predictions about the changing size of enterprises and establishments and the purpose of this essay is to present some stylized facts to begin to resolve some of these theoretical confusions. The estimates for this purpose cover a period of almost four decades. They show that average establishment size has decreased since the late 1960s, that the n...

The invisible hand of a perfectly competitive market refers to the self-regulating behavior where if each consumer and producer are allowed freely make their own choices, settles at an efficient outcome that is beneficial all individual members society hence as whole. Two well-known facets generally mentioned in economics literature—the first one static picture market, i.e. equilibrium; second ...

This paper examines the relationship between a differentiated downstream market and a specialized upstream market. We analyze four different types of vertical relation between the upstream and downstream sectors when the upstream market supplies specialized and complementary inputs to a downstream product differentiated market. The first is the benchmark case of decentralized markets, the secon...

A large variety of markets, such as retail markets for gasoline or mortgage markets, are characterized by firms offering a fairly homogenous good produced at virtually the same cost. The present paper provides a theoretical examination of this type of market by developing a sequential search model with incomplete information where consumers are uninformed about the underlying production cost. W...

The purpose of this paper is the following: firstly, to chart how much economic reform of CEE electricity industries has taken place to date; secondly, to discuss why progress has been so limited; and, thirdly, to consider the prospects over the next few years. In charting the economic progress to date, we will consider and discuss progress in electricity price unbundling and rebalancing; in ut...

We study the asymptotic nucleolus of a smooth and symmetric oligopoly with an atomless sector. We show that under appropriate assumptions, the asymptotic nucleolus of the TU market game coincides with the unique TU competitive payoff distribution x. This equivalence results from nucleolus of a finite game belonging to its core and the Aumann Core Equivalence, which holds for this economy due to...

In this laboratory experiment we study the use of strategic ignorance to delegate real authority within a firm. A worker can gather information on investment projects, while a manager makes the implementation decision. The manager can monitor the worker. This allows her to better exploit the information gathered by the worker, but also reduces the worker's incentives to gather information in th...

This paper discusses how ICT and emerging electronic commerce in consumer products influence the relative efficiency in production of households and firms, resulting in changes in the division of tasks between these two types of agents. Increased information and competence of households, in combination with stiffer competition among firms, will also increase the power of households relative to ...