RAND Journal of Economics articles from June 2005

RAND Journal of Economics archives from June 2005

Disruptive technologies and the emergence of competition.
June 22, 2005... We formalize the phenomenon of disruptive technologies that initially serve isolated market niches and, as they mature, alter industry boundaries by displacing established technologies from mainstream segments. Using a model of horizontal and...

Start-up finance, monitoring, and collusion.
June 22, 2005... I examine optimal financial contracts between entrepreneurs, financial intermediaries (venture capitalists), and other investors that allocate both cash flow rights and control rights to (i) motivate the venture capitalist to efficiently...

Careerist judges and the appeals process.
June 22, 2005... I analyze how careerist judges formulate their decisions using information they uncover during deliberations as well as relevant information from previous decisions. I assume that judges have reputation concerns and try to signal to an...

Labor mobility of scientists, technological diffusion, and the firm's patenting decision.
June 22, 2005... We develop and test a model of the patenting and R&D decisions of an innovating firm whose scientist-employees sometimes quit to join or start a rival. In our model, the innovating firm patents to protect itself from its employees. We show...

Allocating control in agency problems with limited liability and sequential hidden actions.
June 22, 2005... I discuss the optimal organization of sequential agency problems with contractible control actions under limited liability. In each of two stages, a risk-neutral agent can choose an unobservable effort level. A success in the first stage makes...

Optimal second-degree price discrimination and arbitrage: on the role of asymmetric information among buyers.
June 22, 2005... The traditional theory of second-degree price discrimination tackles individual self-selection but does not address the possibility that buyers could form a coalition to conduct arbitrage. We study the optimal sale mechanism that takes into...

The dark side of competitive pressure.
June 22, 2005... When firms are better informed than their consumers--for example, in many service industries firms know more than their customers about the benefits of different alternatives--competitive pressure may inhibit efficiency because it forces firms...

Competition and price discrimination in yellow pages advertising.
June 22, 2005... We examine the effect of competition on second-degree price discrimination in display advertising in Yellow Pages directories. Our main empirical finding is that while competition is associated with lower prices, the association is not...

Cheap-talk referrals of differentiated experts in repeated relationships.
June 22, 2005... The effectiveness of cheap talk advice is examined in recurrent relationships between a customer and multiple experts who provide differentiated professional services. The main findings are: (i) Full honesty is not sustainable if the...

Supplier discretion over provision: theory and an application to medical care.
June 22, 2005... Suppliers who are better informed than purchasers, such as physicians treating insured patients, often have discretion over what to provide. I show how, when the purchaser observes what is supplied but neither the recipient type nor the actual...

Markets for ownership.
June 22, 2005... The prevailing theory of the firm demonstrates that ownership by dispensable, outside parties is inefficient relative to ownership by productive agents. To better understand observed patterns of ownership, I analyze markets for ownership,...

Investments and network competition.
June 22, 2005... We analyze the impact of two-way access charges on the incentives to invest in networks with different levels of quality. When quality has an impact on all calls initiated by customers (destined both on-net and off-net), we obtain a result of...