This paper introduces a new model to capture the key stylized facts of firm price setting behavior in the open economy. At the firm level, producers adjust their domestic prices more frequently and fully in response to marginal cost shocks than for the same goods sold abroad. At the macro level, the terms of trade are less volatile than the real exchange rate and trade liberalization reduces ma...

This paper develops the idea that obsolescence acts as an incentive device to provide quality for experience goods. The argument is that obsolescence affects the frequency at which consumers repurchase products and may punish producers for a lack of quality. A higher rate of obsolescence enables a firm to convince its consumers that it provides high quality. We identify a trade–off between qual...

Online games increasingly sell virtual goods to generate real income. As a result, it is increasingly important to identify factors and theory of consumption values that affect intent to purchase virtual goods in online games. However, very little research has been devoted to the topic. This study is an empirical investigation of the factors and theory of consumption values that affect intent t...

This paper presents a dynamic model for the real estate market. Households have stochastic behavior and compete for quasi-unique locations (real estate goods), which are assigned to the best bidder through an auction-type mechanism. The producers are modeled as maximizers of their profits over the long-term through the production of real estate assets, represented by the present value of future...

The ancien regime in Eastern Europe was characterized by an almost complete divorce of production from the market. As a result the quality of machinery (with the exception of some military goods) and most consumer goods was usually very poor. One of the main tasks of trade in a market economy, a by-product of its general role of networking producers to customers, is to convey information on mar...

We develop a model for pricing experience information goods that exhibit initial uncertainty in the marketplace. We show how a combination of heterogeneous consumer valuations of the good and an increasing, but concave, word-of-mouth effect that decreases uncertainty results in an inverted U-shaped willingness-to-pay function for the buyers. With a fixed-price strategy the uncertainty in the ma...

Initiatives certifying that producers of goods and services adhere to defined environmental and social-welfare production standards are increasingly popular. According to proponents, these initiatives create financial incentives for producers to improve their environmental, social, and economic performance. We reviewed the evidence on whether these initiatives have such benefits. We identified ...

Analyses of the political economy of exchange rate policy posit that firms and individuals in different sectors of the economy have distinct policy attitudes toward the level and stability of the exchange rate. Most such approaches hypothesize that internationally exposed firms prefer more stable currencies and that producers of tradables prefer a relatively depreciated real exchange rate. As s...

Fair trade is a means of governing South-North supply chains to increase the benefits of international trade integration for poor southern producers of agricultural and handicraft goods. Although the approach itself is arguably innovative in comparison with commercially orientated supply chains, many consider that its formalisation within third-party, Fairtrade International certification, has ...

In his thesis “Facing threats by sharing information: case studies and multi-agent simulation", Nicolas Paget, PhD student at LAMSADE, introduced the notion of threat for actors, in a context where producers can loose assets, but also see their ability to produce be reduced. The goal of this PhD proposal is to explore the links between the notions of threat and of risk in order to obtain a nove...