2,571 research outputs found
Pricing Damaged Goods
Companies with market power occasionally engage in intentional quality reduction of a portion of their output as a means of offering two qualities of goods for the purpose of price discrimination, even absent a cost saving. This paper provides an exact characterization in terms of marginal revenues of when such a strategy is profitable, which, remarkably, does not depend on the distribution of customer valuations, but only on the value of the damaged product relative to the undamaged product. In particular, when the damaged product provides a constant proportion of the value of the full product, selling a damaged good is unprofitable. One quality reduction produces higher profits than another if the former has higher marginal revenue than the latter
Dynamic pricing with constant demand elasticity
The model of Gallego and van Ryzin (1994) is specialized to the case of constant elasticity of demand. A closed form is developed, which has an even simpler form than that arising with exponential demand, and possesses an excellent approximation. It is shown in this environment that monopoly is efficient, which means that all the behavior usually attributed to monopoly pricing is actually a consequence of efficient pricing and would arise even in a perfectly competitive environment. If the initial supply is not too large, it is shown that consumers have no incentive to delay their purchases in order to get a lower price at the average inventory prevailing at any time
License Prices for Financially Constrained Firms
It is often alleged that high auction prices inhibit service deployment. We investigate this claim under the extreme case of financially constrained bidders. If demand is just slightly elastic, auctions maximize consumer surplus if consumer surplus is a convex function of quantity (a common assumption), or if consumer surplus is concave and the proportion of expenditure spent on deployment is greater than one over the elasticity of demand. The latter condition appears to be true for most of the large telecom auctions in the US and Europe. Thus, even if high auction prices inhibit service deployment, auctions appear to be optimal from the consumers' point of view.
Fraud cycles
Fraud is an ancient crime and one that annually causes hundreds of billions of dollars in losses. We examine the behavioral patterns over time of different types of frauds, which illustrate cyclical frequencies. We develop an evolutionary theory that suggests cyclic behavior in frauds should be common.fraud, cycle, steady state
Learning in the Repeated Secretary Problem
In the classical secretary problem, one attempts to find the maximum of an
unknown and unlearnable distribution through sequential search. In many
real-world searches, however, distributions are not entirely unknown and can be
learned through experience. To investigate learning in such a repeated
secretary problem we conduct a large-scale behavioral experiment in which
people search repeatedly from fixed distributions. In contrast to prior
investigations that find no evidence for learning in the classical scenario, in
the repeated setting we observe substantial learning resulting in near-optimal
stopping behavior. We conduct a Bayesian comparison of multiple behavioral
models which shows that participants' behavior is best described by a class of
threshold-based models that contains the theoretically optimal strategy.
Fitting such a threshold-based model to data reveals players' estimated
thresholds to be surprisingly close to the optimal thresholds after only a
small number of games
Impact of Siblings on Pragmatic Development in Children with Cochlear Implants
The purpose of this study was to investigate the development of pragmatics in young children who have received cochlear implants (CI). There are limited studies that focus specifically on the pragmatic development of these children. This led to the questions of this study that focused on the development of early pragmatics and the possible role of older siblings on this development. Three children and their families participated in this study, one with bilateral cochlear implants, one with a unilateral implant, and one with hearing aids in both ears (who was a cochlear implant candidate). The child with bilateral cochlear implants had an older sibling while the others did not. Data was collected using a developmental questionnaire, the MacArthur Bates Vocabulary Inventory, and 30 minute video recordings of two target activities that required age-appropriate play and demand cooperation between the child with the researcher and a familiar other. The results of this study seemed to both support and refute what was expected about language development in children born with significant hearing loss. Specifically, a younger age of implantation does not necessarily facilitate better language development specifically in the areas of understanding and producing spoken language even if these lag behind age peers. On the other hand, all of the children in this study exhibited age appropriate early pragmatic skills when these were coded for non-verbal and vocal means of communication and therefore, had better pragmatics regardless of implantation status
Introduction to Economic Analysis
This book presents introductory economics ("principles") material using standard mathematical tools, including calculus. It is designed for a relatively sophisticated undergraduate who has not taken a basic university course in economics. It also contains the standard intermediate microeconomics material and some material that ought to be standard but is not. The book can easily serve as an intermediate microeconomics text. The focus of this book is on the conceptual tools and not on fluff. Most microeconomics texts are mostly fluff and the fluff market is exceedingly over-served by $100+ texts. In contrast, this book reflects the approach actually adopted by the majority of economists for understanding economic activity. There are lots of models and equations and no pictures of economists
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