We consider costly information acquisition in the canonical monopolistic nonlinear pricing model (Mussa and Rosen, 1978; Maskin and Riley, 1984) so that consumers need to incur privately known entry costs in order to learn their preference “intensities” for the quality of the product. We show that by taking into account costly information acquisition, the nature of optimal nonlinear pricing con...

Edward Chamberlin’s theory of monopolistic competition influenced greatly the development of marketing theory and thought in the 1930s to the 1960s. Indeed, marketers held the theory in such high regard that the American Marketing Association awarded Chamberlin the Paul D. Converse Award in 1953, which at the time was the AMA’s highest honor. However, the contemporary marketing literature virtu...

In this article, we unearth the institution for enforcement of the agreement between the Opec Boys, fuel smugglers and ex-rebels, and a politician, who allows them to conduct illegal smuggling. Rather than the Opec Boys’ threat of rebellion, their promise of political support and refraining from civil disorder matters to inflict cooperation. A repeated play mechanism where the players punish ea...

Article history: Received 21 April 2008 Received in revised form 13 May 2009 Accepted 14 May 2009 Available online 27 May 2009 This paper assumes that the decision makers of OPEC (or at least of its core members) are interested in both profits and political payoffs (support, popularity, being a hero of the Arab or Islamic street, etc.). The oil weapon, i.e. a reduction of output is the most pow...