Counterfeiting is a growing problem in national and international trade. We extend the work of Grossman and Shapiro (1988) on consumption externalities in prestige goods markets, and model a general aversion towards large levels of output interacting with a firm-specific aversion towards copies. We show that these externalities play the role of protecting the market share of the producer of ori...

Sen’s libertarian paradox is ascribed to the inevitable conflict between the Pareto criterion and individuals’ rights to create negative externalities. Finite coalitions can effect exchanges of rights through Coaseian bargains in order to resolve inefficiencies due to local externalities. With a continuum of agents, however, finite coalitions are powerless to affect widespread externalities, ex...

Existence of ex post incentive compatible mechanisms in models with multi-dimensional signals and interdependent values is possible when there are no consumption externalities. An ex post incentive compatible mechanism is constructed in a model where a single indivisible object is allocated among several buyers with multi-dimensional information and interdependent values. It is the combination ...

Abstract We incorporate externalities into the stable matching theory of two-sided markets. Extending classical substitutes condition to markets with externalities, we establish that matchings exist when agent choices satisfy substitutability. show substitutability is a necessary for existence in maximal-domain sense and provide characterization substitutable choice functions. In addition, exte...

The rise of social media technology has led to new customer relationship management tools that engage customers more easily and directly (social customer relationship management, SCRM). However, the usefulness of SCRM is contingent upon a successful adoption by an organization. Various technology adoption theoretical frameworks have been proposed for social media technologies generally, and for...

Negative and positive externalities pose symmetrical problems to social welfare. The law internalizes negative externalities by providing general tort liability rules. According to such rules, those who cause harm to others should pay compensation. In theory, in the presence of positive externalities, negative liability should apply: those who produce benefits should be paid a compensatory awar...

This paper examines the theoretical impacts of spatial externalities whose marginal impacts decline with distance, referred to as “edge effect externalities”. A simple one dimensional model appropriate for analysis of policy measures and the potential for bargaining between affected agents is outlined, and the production impacts of this class of externalities are illustrated. Edge effect extern...

STEM Graduates, Human Capital Externalities, and Wages in the U.S. Previous research suggests that the local stock of human capital creates positive externalities within local labor markets and plays an important role in regional economic development. However, there is still considerable uncertainty over what types of human capital are most important. Both national and local policymakers in the...