Does the existence of secondary markets for durable goods affect price and allocation on primary markets? We study competitive equilibria for durable goods where the possibility of future trade on secondary markets does not affect consumer behaviour in the primary market, provided consumers are exponential discounters. If consumers are hyperbolic discounters, however, secondary markets are no l...

Competing with Asking Prices In many markets, sellers advertise their good with an asking price. This is a price at which the seller is willing to take his good off the market and trade immediately, though it is understood that a buyer can submit an offer below the asking price and that this offer may be accepted if the seller receives no better offers. Despite their prevalence in a variety of ...

This paper studies the effects of generic entry on post-patent price competition for 18 prescription drugs recently exposed to competition. An independent, validating test of the “generic competition paradox” is conducted using a newly created data set. Each generic entrant is associated with an average 1% increase in the branded price. The one-way error component model accounts for intermolecu...

We propose a heteroscedastic regression model to identify the determinants of the dispersion in interest rates on loans granted to small and medium sized enterprises. We interpret unexplained deviations as evidence of the banks’ discretionary use of market power in the loan rate setting process. “Discretion” in the loan-pricing process is most important, we find, if: (i) loans are small and unc...

An innovation-diffusion model was developed with agent-based modelling (ABM); the model is used to study technical innovation and its diffusion process in China. The results are as follows: only a small fraction of firms conduct independent product-innovation, and most firms prefer imitation and/or purchases; most of the innovative firms are located in the East; approximately three or four tech...

This study presents an empirical analysis of the cost efficiency of a sample of Swiss multi-utilities operating in the distribution of electricity, natural gas and water. The multi-utilities that operate in different sectors are characterized by a strong unobserved heterogeneity. Therefore the measurement of their performance poses an important challenge for the regulators. The purpose of this ...

Revolutionary Effects of New Information Technologies In markets with imperfect information and heterogeneity, the information technology affects the rate at which agents meet, which in turn affects the distribution of production technologies across firms. We show that in models for such markets there are typically multiple equilibria because reservation utility levels and the lowest production...

In two-sided networks, two parties interact on a platform, caring about the numbers of subjects on the other side. A typical problem, in this context, is setting prices for network services so as to get “both side on boards”. The standard approach in the literature considers the network’s ability to convince both sides to join the network, whereas this paper consider an alternative setting, in ...

The paper investigates the differences between small, medium-sized and large firms regarding their performance in the introduction of new products and processes. After a review of the relevant literature, two models are proposed and tested in search for different business strategies and innovation inputs connected to product and process innovations. The empirical analysis uses innovation survey...

This paper introduces a model to analyze the role of the cost of information dissemination in large markets where firms have varying degrees of intrinsic efficiency reflected in their marginal costs. Firms enter a market and discover how efficient they are. Those firms with high enough efficiency stay, others exit. Remaining firms then compete to attract consumers by disseminating information a...