Pricing Decisions in Franchised Chains: A Look at the Restaurant and Fast-Food Industry

This paper examines empirical issues of pricing and price dispersion within franchised restaurant and fast-food chains. Given the per se illegality of resale price maintenance (RPM) under current U.S. Antitrust laws, and the fact that franchised outlets are independent businesses under the law, franchisors must delegate the power to set prices to franchisees whereas corporate chains can control downstream prices directly. The issue I examine is whether it matters empirically who, between the franchisor or the franchisee, gets to choose downstream prices, and why. After discussing a number of reasons why prices chosen by franchisees may differ from those that a franchisor would pick, I show, using data from all restaurant chains in the metropolitan Pittsburgh and Detroit areas, that there is price dispersion in fast-food franchising. I then show that the amount of price dispersion relates to the amount of franchising in a way that suggests that 1) franchisors are not able to control franchisees' prices indirectly to the same extent that they control company-owned unit prices and 2) the prices in franchised and corporate units are systematically different. Finally, I show that prices are systematically lower in corporate restaurants. This suggests that the reason behind the price differentials is not franchisor opportunism, but more likely double marginalization or, potentially, the existence of positive horizontal externalities among restaurants in a chain.

The systolic constant of orientable Bieberbach 3-manifolds

A compact manifold is called Bieberbach if it carries a flat Riemannian metric. Bieberbach manifolds are aspherical, therefore the supremum of their systolic ratio, over the set of Riemannian metrics, is finite by a fundamental result of M. Gromov. We study the optimal systolic ratio of compact of $3$-dimensional orientable Bieberbach manifolds which are not tori, and prove that it cannot be realized by a flat metric. We also highlight a metric that we construct on one type of such manifolds ($C_2$) which has interesting geometric properties : it is extremal in its conformal class and the systole is realized by "very many" geodesics.Comment: 18 pages, 3 figure

WetNet operations

WetNet is an interdisciplinary Earth science data analysis and research project with an emphasis on the study of the global hydrological cycle. The project goals are to facilitate scientific discussion, collaboration, and interaction among a selected group of investigators by providing data access and data analysis software on a personal computer. The WetNet system fulfills some of the functionality of a prototype Product Generation System (PGS), Data Archive and Distribution System (DADS), and Information Management System for the Distributed Active Archive Center. The PGS functionality is satisfied in WetNet by processing the Special Sensor Microwave/Imager (SSM/I) data into a standard format (McIDAS) data sets and generating geophysical parameter Level II browse data sets. The DADS functionality is fulfilled when the data sets are archived on magneto optical cartridges and distributed to the WetNet investigators. The WetNet data sets on the magneto optical cartridges contain the complete WetNet processing, catalogue, and menu software in addition to SSM/I orbit data for the respective two week time period

The Role of Residual Claims and Self-Enforcement in Franchise Contracting

Much of the economic literature on franchising has been concerned with incentive issues and how these are managed in franchised contracts. Two main types of incentive mechanisms have been identified: residual claims and self enforcement. In this paper we describe these incentive mechanisms, and their use in franchise contracts. We argue that although these two types of mechanisms are usually thought of as alternative ways to align franchisee and franchisor incentives, they are in fact complementary in franchise contracts because they address different incentive problems. We explore what these incentive problems are, and then describe specifically how franchise contract terms and practices support each type of incentive mechanism. Finally, we discuss briefly, via two examples, how our analysis also applies to non-franchised systems with common marks or other reputation concerns.

A review of the genus Megalographa Lafontaine and Poole (Lepidoptera: Noctuidae: Plusiinae) with the description of a new species from Costa Rica

The classification of the genus Megalographa Lafontaine and Poole, 1991, is reviewed and the five known species diagnosed. The genus is essentially restricted to the New World, although one species M. biloba (Stephens) is migratory and has occasionally straggled to western Europe. A new species (Megalographa talamanca Lafontaine and Sullivan) endemic to the Talamanca Mountain Range in Costa Rica is described. Adults and genitalia are illustrated

Vertical Integration and Firm Boundaries : The Evidence

Understanding what determines firm boundaries and the choice between interacting in a firm or a market is not only the fundamental concern of the theory of the firm, but it is also one of the most important issues in economics. Data on value added, for example, reveal that in the US, transactions that occur in firms are roughly equal in value to those that occur in markets. The economics profession, however, has devoted much more attention to the workings of markets than to the study of firms, and even less attention to the interface between the two. Nevertheless, since Coase’s (1937) seminal paper on the subject, a rich set of theories has been developed that deal with firm boundaries in vertical or input/output structures. Furthermore, in the last 25 years, empirical evidence that can shed light on those theories has been accumulating.Vertical integration ; firm boundaries ; vertical mergers ; firms versus markets