RAND Journal of Economics articles from March 2008

RAND Journal of Economics archives from March 2008

Imperfect durability and the Coase conjecture.
March 22, 2008... This article considers a market served by a monopolist who sells a durable good that depreciates stochastically over time. We show that there exist three types of stationary equilibria: a Coase Conjecture equilibrium, a monopoly equilibrium,...

Rules of proof, courts, and incentives.
March 22, 2008... We analyze the design of legal principles and procedures for court decision making in civil litigation. The objective is the provision of incentives for potential tort-feasors to exert care when evidence is imperfect and may be distorted by the...

Industry dynamics with stochastic demand.
March 22, 2008... We study the dynamics of an industry subject to aggregate demand shocks where the productivity of a firm's technology evolves stochastically over time. To characterize the intertemporal evolution of the distribution of firms, we discuss in...

Properties of scoring auctions.
March 22, 2008... This article studies scoring auctions, a procedure commonly used to buy differentiated products: suppliers submit offers on all dimensions of the good (price, level of nonmonetary attributes), and these are evaluated using a scoring rule. We...

Understanding strategic bidding in multi-unit auctions: a case study of the Texas electricity spot market.(Case study)
March 22, 2008... We examine the bidding behavior of firms in the Texas electricity spot market, where bidders submit hourly supply schedules to sell power. We characterize an equilibrium model of bidding and use detailed firm-level data on bids and marginal...

Retailers' choice of product variety and exclusive dealing under asymmetric information.
March 22, 2008... This article considers vertical relations between an upstream manufacturer and a downstream retailer that can independently obtain a low-quality, discount substitute. The analysis reveals that under full information, the retailer offers both...

Can cost increases increase competition? Asymmetric information and equilibrium prices.
March 22, 2008... We present an analysis of competition under asymmetric information where prices react asymmetrically to changes in firms" marginal costs. When one firm has private information about some customers, an increase in an uninformed firm's marginal...

Imperfect competition and quality signalling.
March 22, 2008... We examine the interplay of imperfect competition and incomplete information in the context of price competition among firms producing horizontally and vertically differentiated substitute products. Incomplete information about vertical quality...

Efficient partnership dissolution under buy-sell clauses.
March 22, 2008... Buy-sell clauses are commonly used contractual provisions to determine the terms of dissolution of partnerships. Under them, one party offers a price for the partnership and the other party chooses whether to sell her share or buy her partner's...

Single sourcing versus multiple sourcing.
March 22, 2008... We show that in contrast to results in the extant literature, single sourcing may not be the optimal strategy of a buyer facing suppliers with strictly convex costs. As we argue, previous findings relied crucially on the joint assumption that,...

Market forces meet behavioral biases: cost misallocation and irrational pricing.
March 22, 2008... Psychological and experimental evidence, as well as a wealth of anecdotal examples, suggests that firms may confound fixed, sunk, and variable costs, leading to distorted pricing decisions. This article investigates the extent to which market...

The value of information and optimal organization.
March 22, 2008... The article addresses the issue of optimal organization of production. I compare three organizational forms: centralization (one agent produces different inputs), decentralization (each of two agents produces a different input and contracts...

Information and bargaining in the hold-up problem.
March 22, 2008... This article incorporates an information structure with partial information into the canonical hold-up problem. The optimal information structure balances the tradeoff between ex ante efficiency (the "information rent" effect) and ex post...

Optimal choice of characteristics for a nonexcludable good.
March 22, 2008... In this model, a principal decides whether to produce one indivisible good and which characteristics it contains. Agents are differentiated along two substitutable dimensions: a vertical parameter that captures their valuation for the good, and...

Status and incentives.
March 22, 2008... This article introduces status as reflecting an agent's claim to recognition in her work. This is a scarce resource: increasing an agent's status requires that another agent's status be decreased. Higher-status agents are more willing to exert...

Erratum.(Correction notice)
March 22, 2008... Due to an error in the RAND Journal of Economics 38:4 on page 1105, an equation printed incorrectly. The corrected equation appears below. [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII]. References Pagnozzi, M. "Bidding...