We present a model of price leadership on homogeneous product markets where the price leader is selected endogenously. The price leader sets and guarantees a sales price to which followers can adjust according to their individual supply functions. The price leader then clears the market by serving the residual demand. Firms with different marginal costs would induce different prices if they wer...

We present a model of fixing or patching a software problem after the product has been released in the market. Specifically, we model a software firm’s trade-off in releasing a buggy product early and investments in fixing it later. We first show that patching investments and time to enter the market are strategic complements such that higher investments in patching capability allow the firm to...

Sufficient cause interactions concern cases in which there is a particular causal mechanism for some outcome that requires the presence of 2 or more specific causes to operate. Empirical conditions have been derived to test for sufficient cause interactions. However, when regression outcome models are used to control for confounding variables in tests for sufficient cause interactions, the outc...

In this paper, we propose a method for developing service based product platforms to generate economical and feasible design strategies for a product family and evaluate design feasibility within dynamic market environments. We will model design strategies for a product family as a market economy where product family platform configurations are generated through market segments based on service...

We model the optimal behaviour of a multiproduct monopolist investing both in process and in product innovation in a dynamic setting. Product innovation reduces the degree of substitutability between any two varieties. First, we find that R&D efforts increase in both directions as the number of varieties grows. Second, we characterise the relative intensity of R&D activities according to the re...

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...

This paper integrates labor market search into a dynamic general equilibrium model to analyze the macroeconomic e®ects of a tari®. The search friction creates a wedge between the marginal product of labor and the product wage. With perfectly °exible prices and wages, the model captures the intuitive e®ect that a permanent increase in the tari® improves the country's terms of trade, which tends ...