This paper studies optimal nonlinear pricing for a monopolist when consumers’ preferences exhibit temptation and self-control as in Gul and Pesendorfer (2001a). Consumers are subject to temptation inside the store but exercise self-control, and those foreseeing large self-control costs do not enter the store. Consumers differ in their preferences under temptation. When all consumers are tempted...

We characterize the product line choice and pricing of a monopolist as the upper envelope of net marginal revenue curves to the individual product demand functions. The equilibrium product varieties to include in a product line are those yielding the highest upper envelope. In a central case (corresponding to a generalized vertical differentiation framework), the equilibrium range of...

Using micro evidence from manufacturing and services firms located in 55 African countries, this paper shows that better management practice, reflected by international management certification, helps firms to raise productivity. Larger and older firms and firms operating closer to the technological frontier are more likely to possess international management standards certification, as do firm...

Marijuana is the most common illicit drug with vocal advocates for legalization. Among other things, legalization would increase access and remove the stigma of illegal behavior. Our model of use disentangles the role of access from preferences and shows that selection into access is not random. We …nd that non-selection-corrected demand estimates are biased resulting in incorrect policy conclu...

I develop a new empirical model for discrete games and apply it to study the release date timing game played by distributors of movies. The results suggest that release dates of movies are too clustered around big holiday weekends and that box office revenues would increase if distributors shifted some holiday releases by one or two weeks. The proposed game structure could be applied more broad...

We study an oligopoly model of banking that allows us to evaluate the two leading explanations for banks’ ability to earn rents. In the model, banks can either invest in information acquisition, or in market power (through product differentiation). The two versions generate different predictions that are tested using panel data on Finnish local banks. We find that banks’ investments in branch n...

In media markets, the value of advertisement exposure depends on circulation, and media consumers’ valuation is affected by advertising. This paper analyzes media market competition in a duopoly framework. There exist symmetric and asymmetric equilibria in terms of firm size, and sometimes a natural monopoly may emerge . There is less scope for asymmetry when products are more differentiated or...

Seller reputation generated by consumers leaving feedback is critical to foster trust in online marketplaces. Yet feedback may be under-provided if consumers are not rewarded to leave feedback. Signaling theory predicts that only high quality sellers would reward buyers for truthful feedback. We explore this scope for signaling using Taobao’s “reward-for-feedback” mechanism and find that items ...

This paper presents an empirical estimation of a catastrophe model of organizational adoptions of a high technology product when network externalities are present. As such, it integrates work from the economics literature and the catastrophe literature to provide a broader look adoptions issues. Additionally, it is one of the few empirical studies we are aware of that attempt to model organizat...

Consumers respond positively to products tied to charity, particularly from sellers that are relatively new and hence have limited alternative means for assuring quality. We establish this result using data from a diverse group of eBay sellers who “experiment” with charity by varying the presence of a donation in a set of otherwise matched product listings. Most of charity’s benefits accrue to ...