204,104 research outputs found

    Prominence and consumer search

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    This paper examines the implications of ÔÇťprominenceÔÇŁ in search markets. We model prominence by supposing that the prominent firm will be sampled first by all consumers. If there are no systematic quality differences among firms, we find that the prominent firm will charge a lower price than its non-prominent rivals. The impact of making a firm prominent is that it will typically lead to higher industry profit but lower consumer surplus and welfare. The model is extended by introducing heterogeneous product qualities, in which case the firm with the highest-quality product has the greatest incentive to become prominent, and making it prominent will boost industry profit, consumer surplus and welfare

    In Litigation: How Far do the "Haves" Come Out Ahead?

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    This paper studies the consequences of asymmetric litigation costs. Under three differ- ent protocols: static legal process, dynamic legal process with exogenous sequencing and dynamic legal process with endogenous sequencing, solutions are obtained for the litigation efforts and the expected value of lawsuits on each side. Outcomes are evaluated in terms of two normative criteria: achieving `justice' and minimizing aggregate litigation cost. The theory implies that a moderate degree of asymmetry may improve access to justice. The dynamics of legal process may accentuate or diminish the effect of asymmetry. The en- dogenous sequencing protocol minimizes cost and may improve access to justice.access to justice;endogenous sequencing;dynamics of litigation process;re- source dissipation

    In Litigation: How Far do the ÔÇťHavesÔÇŁ Come Out Ahead

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    This paper studies the consequences of asymmetric litigation costs. Under three differ- ent protocols: static legal process, dynamic legal process with exogenous sequencing and dynamic legal process with endogenous sequencing, solutions are obtained for the litigation efforts and the expected value of lawsuits on each side. Outcomes are evaluated in terms of two normative criteria: achieving `justice' and minimizing aggregate litigation cost. The theory implies that a moderate degree of asymmetry may improve access to justice. The dynamics of legal process may accentuate or diminish the effect of asymmetry. The en- dogenous sequencing protocol minimizes cost and may improve access to justice.access to justice;endogenous sequencing;dynamics of litigation process;re- source dissipation.

    Conditioning prices on search behaviour

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    We consider a market in which ´┐Żfirms can partially observe each consumer's search behavior in the market. In our main model, a ´┐Żfirm knows whether a consumer is visiting it for the ´┐Żfirst time or whether she is returning after a previous visit. Firms have an incentive to offer a lower price on a ´┐Żfirst visit than a return visit, so that new consumers are offered a "buy-now" discount. The ability to offer such discounts acts to raise all prices in the market. If ´┐Żfirms cannot commit to their buy-later price, in many cases ´┐Żfirms make "exploding" offers, and consumers never return to a previously sampled ´┐Żrm. Likewise, if ´┐Żfirms must charge the same price to all consumers, regardless of search history, we show that they sometimes have the incentive to make exploding offers. We also consider other ways in which ´┐Żfirms could use information about search behaviour to determine their prices
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