We study the relation between the number of firms and price-cost margins under price competition with uncertainty about competitors’ costs. We present results of an experiment in which two, three and four identical firms repeatedly interact in this environment. In line with the theoretical prediction, market prices decrease with the number of firms, but on average stay above marginal costs. Pri...

Consumers currently enjoy a surplus of goods (books, videos, music, or other items) available to purchase. While this surplus often allows a consumer to find a product tailored to their preferences or needs, the volume of items available may require considerable time or effort on the part of the user to find the most relevant item. Recommendation systems have become a common part of many online...

Oliver Hinz, Jochen Eckert The Impact of Search and Recommendation Systems on Sales in Electronic Commerce The Internet and related technologies have vastly expanded the variety of products that can be profitably promoted and sold by online retailers. Furthermore, search and recommendation tools reduce consumers’ search costs in the Internet and enable them to extend their search from a few eas...

This study evaluates traffic reactions to two alternative construction plans of Lafayette Bridge crossing the Mississippi River in downtown Saint Paul, Minnesota. We calibrate a travel demand model previously developed and evaluate network performance in different construction phases of the two alternative scenarios. Most significant changes in traffic condition occur during the bridge closure ...

The paper first briefly reviews the extent to which profit maximising transport firms with identical cost functions and producing identical transport services pass-on output taxes to transport users under perfect competition, under different forms of imperfect competition and when they act as monopolists. Then the analysis is extended to derive the pass-on rates and activity reductions caused b...

An important current trend in advertising is the replacement of traditional pay-per-exposure (pay-per-impression) pricing models with performance-based mechanisms in which advertisers pay only for measurable actions by consumers. Such pay-per-action (PPA) mechanisms are becoming the predominant method of selling advertising on the Internet. Well-known examples include pay-per-click, pay-per-cal...

The relationship between technical progress and price competition is a controversial issue in economics. This paper highlights the fact that investment in technical progress is an authentic type of competition which benefits the consumers rather than the industry. This type of competition exists when the potential for technical progress, which can be incorporated by firms through investment, is...

The “transfer price rule”(TPR) defines a vertical price squeeze as an input price, output price combination set by a vertically-integrated firm monopoly producer of an essential input that would not allow the firm’s downstream unit to earn at least a normal rate of return on investment in the “as-if”case that it had to purchase the input at the price charged independent firms. In its 2009 linkL...

We analyze oligopolistic third-degree price discrimination relative to uniform pricing when markets are covered. Pricing equilibria critically determined by supply-side features such as the number of firms and their marginal cost differences. It follows that each firm's Lerner index under is equal weighted harmonic mean margins discriminatory pricing. Uniform then lowers average prices raises c...