This paper proposes a percolation-based model of new-product diffusion in the spirit of Solomon et al. (2000) and Goldenberg et al. (2000). A consumer buys the new product if she has formed her individual valuation of the product (reservation price) and if this valuation is greater or equal than the price of the product announced by the firm in a given period. Our model differs from previous pe...

Article history: Received 27 January 2009 Received in revised form 14 March 2009 Accepted 22 April 2009 Available online xxxx Communicated by F.Y.L. Chin

A primary goal of the 1996 Telecommunications Act is to encourage competition in longdistance telephone markets. Four years after passage of this legislation, Bell Operating Companies (“BOCs”) have been granted permission to offer long-distance services in only one state. The regulatory barrier to entry is justified on grounds that the BOCs have the ability to discriminate against incumbent lon...

We introduce natural strategic games on graphs, which capture the idea of coordination in a local setting. We show that these games have an exact potential and have strong equilibria when the graph is a pseudoforest. We also exhibit some other classes of graphs for which a strong equilibrium exists. However, in general strong equilibria do not need to exist. Further, we study the (strong) price...

While costs of inkjet printers have plummeted over the past few years, brand name consumable prices remain high. As a result, consumers have been drawn to third-party inks that offer the promise of comparable quality at a much lower price point. In order to investigate the impact of third party inks on image quality, a combination of subjective and objective image quality measurements were appl...

This paper studies an exchange economy with indivisibilities. Our main goal is to see if a price system can function well in an economy (e.g., an economy with complementary preferences) that does not have a Walrasian equilibrium. We study the price adjustment processes governed by the Euler iterative scheme. We show that in an economy that has a Walrasian equilibrium, our price adjustment proce...

This paper presents a new bidding strategy for continuous double auctions (CDA) designed for Mertacor, a successful trading agent, which won the first price in the “travel game” of Trading Agent Competition (TAC) for 2005. TAC provides a realistic benchmarking environment in which various travel commodities are offered in simultaneous online auctions. Among these, entertainment tickets are trad...

A need exists to increase both knowledge and recognition of the values associated with ecosystem services and amenities. This article explores the use of hedonic pricing as a tool for eliciting these values. We take a case study approach, valuing several services provided by ecosystems, namely aesthetic quality (views), access to outdoor recreation, and the benefits provided by tree cover in Da...

This paper investigates price competition with private information on the demand side. Two sellers each offer a different variety of a good to a buyer endowed with a private binary signal on their relative quality. The model provides an informational foundation to differentiation in Hotelling's price competition game. Equilibrium comparative statics is performed with respect to the prior belief...