Monitoring Costs and the Mode of International Investment

Our central proposition is that monitoring costs increase with physical distance, and hence, direct investments located further from the foreign investor’s home base should be more likely formed as joint ventures. Tests on a data set of Taiwanese direct investments in Mainland China provide robust support to the hypothesis. A project that was located 1000 kilometers further away was 13-17% more likely to be formed as a joint venture.contract, vertical integration, opportunism, international investment, China

Sales and Promotions: A More General Model

We embed the Varian (1980) model in a broader setting that considers how switcher/loyal customer segments are determined. Generally, customer acquisition is deterministic while pricing is randomized. The equilibrium outcome depends on the timing of customer acquisition relative to pricing. If sellers acquire customers before setting prices, the unique equilibrium is asymmetric. If sellers acquire customers and set prices simultaneously, the unique equilibrium is symmetric. Our results provide a fundamental justification for previous analyses that variously assumed the outcome to be asymmetric or symmetric. The comparative statics for the asymmetric and symmetric equilibria are identical.competition, pricing, customer acquisition

Presumed Consent and Cadaveric Organ Donation: Cross-Country Evidence

The empirical evidence that default choices matter seems limited to retirement savings and cadaveric organ donations. Focusing on organ donations, we noted that previous studies did not account for a possible right of the family to veto the donation. Such veto would have masked the estimated impact of presumed consent Accounting for both presumed consent and family veto, our results show that the impact of presumed consent itself was 1.52-2.76 times larger than in estimates ignoring family veto. On the other hand, the net impact of presumed consent coupled with family veto was 16-67% lower than the impact predicted by estimates ignoring family veto

Buyer Shopping Costs and Retail Pricing: An Indirect Empirical Test

Suppose that consumers incur fixed shopping costs and choose stores according to advertised discounts. Then, the extent to which a store will discount advertised items should increase with the profit from other regularly-priced items. Bookstores customarily advertise discounts on bestsellers. Among conventional bookstores, we found that the bestseller discount systematically increased with the store area, selection of titles, and presence of other product categories. One standard deviation increase in store area was associated with a 3.7 (± 1.8) higher bestseller percentage discount. Among online stores, we found that the bestseller discount systematically increased with the selection of titles and number of product categories. One standard deviation increase in selection was associated with a 9.5 (± 2.2) higher bestseller percentage discount. These results indirectly confirm that booksellers discount bestsellers to attract consumers, and that consumers bear significant fixed shopping costs.shopping costs, pricing, advertising

Sales and promotions: A more general model

We embed the Varian (1980) model in a broader setting that considers how switcher/loyal customer segments are determined. Generally, customer acquisition is deterministic while pricing is randomized. The equilibrium outcome depends on the timing of customer acquisition relative to pricing. If sellers acquire customers before setting prices, the unique equilibrium is asymmetric. If sellers acquire customers and set prices simultaneously, the unique equilibrium is symmetric. Our results provide a fundamental justification for previous analyses that variously assumed the outcome to be asymmetric or symmetric. The comparative statics for the asymmetric and symmetric equilibria are identical

The value of online information privacy: Evidence from the usa and singapore

Concern over online information privacy is widespread and rising. However, prior research is silent about the value of information privacy in the presence of potential benefits from sharing personally identifiable information. We analyzed individuals’ trade-offs between the benefits and costs of providing personal information to websites. We found that benefits – monetary reward and future convenience – significantly affect individuals’ preferences over websites with differing privacy policies. We also quantified the value of website privacy protection. Among U.S. subjects, protection against errors, improper access, and secondary use of personal information is worth US$30.49 – 44.62. Finally, we identified three distinct segments of Internet consumers – privacy guardians, information sellers, and convenience seekers