A runoff system restores the principle of minimum differentiation

We show that the principle of minimum differentiation holds in two-round elections, for any number of candidates, regardless of the presence of entrants, or the distribution of voters’ preferences.

Rent seeking with efforts and bids

Abstract We analyse the development of world records speed skating from 1893 to 2000 for both men and women. The historical data show that it is likely that the relation between skating speed and distance of the various events is non-linear and converges to a limit value. We pay special attention to technical innovations in speed skating, especially, the introduction of the klapskate in the 1996/1997 season, and its impact on the long-run limit value. We focus on endurance and we estimate lower bounds for world records given the current technological state of the art.

A runoff system restores the principle of minimum differentiation

We show that the principle of minimum differentiation holds in two-round elections, for any number of candidates, regardless of the presence of entrants, or the distribution of voters’ preferences.

Expert judgment versus public opinion - evidence from the Eurovision Song Contest

For centuries, there have been discussions as to whether only experts can judge the quality of cultural output, or whether the taste of the public also has merit. This paper tries to resolve that question empirically, using national finals of the Eurovision Song Contest. We show that experts are better judges of quality: the outcome of finals judged by experts is less sensitive to factors unrelated to quality than the outcome of finals judged by public opinion. Yet, experts are not perfect: their judgment does still depend on such factors. This is also the case in the European finals of the contest.

License auctions when winning bids are financed through debt

We study an auction where two licenses to operate on a new market are sold. Winners finance their bids on a competitive debt market. Due to limited liability, the amount of debt affects their behavior on the product market. In equilibrium, consumer prices are lower than with a beauty contest, where firms obtain their licenses for free. Winning bids are lower than in a model where firms have internal funds. Higher bids cannot be financed due to credit rationing. Expected net firm profits are strictly positive, although firms are a priori identical and have the same information.

Markets, Monopoly, and Competition

Nowadays, the field of Industrial Organization is one of the most interesting, exciting, and relevant fields in economics. Industrial Organization relaxes the assumption that firms lack market power. What if firms do have an influence on market prices, on products that are being offered, perhaps even on the way a market is organized? What happens to market outcomes if there are market frictions, such as search or switching costs? What happens if consumers are not fully rational? Can firms take advantage of that, or will such attempts backfire in a competitive environment? These are all questions Professor Marco Haan considers in his research

Expert judgment versus public opinion : evidence from the Eurovision Song Contest

For centuries, there have been discussions as to whether only experts can judge the quality of cultural output, or whether the taste of the public also has merit. This paper tries to resolve that question empirically, using national finals of the Eurovision Song Contest. We show that experts are better judges of quality: the outcome of finals judged by experts is less sensitive to factors unrelated to quality than the outcome of finals judged by public opinion. Yet, experts are not perfect: their judgment does still depend on such factors. This is also the case in the European finals of the contest

Advertising for attention in a consumer search model

We model the idea that when consumers search for products, they first visit the firm whose advertising is more salient. The gains a firm derives from being visited early increase in search costs, so equilibrium advertising increases as search costs rise. This may result in lower firm profits when search costs increase. We extend the basic model by allowing for firm heterogeneity in advertising costs. Firms whose advertising is more salient and therefore raise attention more easily charge lower prices in equilibrium and obtain higher profits. As advertising cost asymmetries increase, aggregate profits increase, advertising falls and welfare increases.Advertising; attention; consumer search; saliency;