Competitive provision of tune-ins under common private information

Television (TV) stations forego millions of dollars of advertising revenues by airing tune-ins (preview advertisements) for their upcoming programs. In this paper, I analyze the equilibrium as well as welfare properties of tune-ins in a duopolistic TV market that lasts for two periods. Importantly, each TV station is fully informed about its own as well as its rival's program. Viewers receive information via tune-ins, if any, or alternatively by sampling a program for a few minutes (and switching across stations). I find that equilibrium tune-in decisions do not necessarily depend on TV stations' knowledge of their rival's program. In this case, the opportunity costs of tune-ins could be so high that a regime without any tune-ins may be socially better. However, when tune-ins depend on both of the upcoming programs, it is possible that they enhance welfare by helping viewers avoid some of the inefficient program sampling they would otherwise do in a regime without any tune-ins

A More General Framework to Analyze Whether Voluntary Disclosure is Insufficient or Excessive

I analyze if the excessive quality disclosure finding of the “classical literature” extends to environments in which consumers have a downward-sloping demand. While the answer is affirmative, there are at least two situations under which disclosure is socially insufficient: (1) when there are quality levels that are too low to generate any positive demand; and (2) when the prior beliefs place sufficiently higher weight on lower qualities. In both cases, non-disclosure by the seller leads to a severe reduction in the perceived quality, thereby significantly lowering the demand and the quantity consumed

Veto players and equilibrium uniqueness in the Baron-Ferejohn model

In political economy, the seminal contribution of the Baron–Ferejohn bargaining model constitutes an important milestone for the study of legislative policy making. In this paper, we analyze a particular equilibrium characteristic of this model, equilibrium uniqueness. The Baron–Ferejohn model yields a class of payoff-unique stationary subgame perfect equilibria (SSPE) in which players’ equilibrium strategies are not uniquely determined. We first provide a formal proof of the multiplicity of equilibrium strategies. This also enables us to establish some important properties of SSPE. We then introduce veto players into the original Baron–Ferejohn model. We state the conditions under which the new model has a unique SSPE not only in terms of payoffs but also in terms of players’ equilibrium strategies

Opaque Selling

We study “opaque” selling in multiproduct environments – a marketing practice in which sellers strategically withhold product information by keeping important characteristics of their products hidden until after purchase. We show that a monopolist will always use opaque selling, but it is not first-best optimal to do so. However, opaque selling might be used at the constrained optimum (with the monopolist’s pricing behavior taken as given). For linear disutility costs, it is optimal for a monopolist to offer a single opaque product

Product line design

We characterize the product line choice and pricing of a monopolist from the upper envelope of net marginal revenue curves to the individual product demand functions. The equilibrium product line constitutes those varieties yielding the highest upper envelope. In a generalized vertical differentiation framework, the equilibrium line is exactly the same as the first-best socially optimal line. These upper envelope and first-best optimal line findings extend to symmetric Cournot oligopoly

When Is It Optimal to Delegate: The Theory of Fast-Track Authority

With fast-track authority (FTA), the US Congress delegates trade-policy authority to the President by committing not to amend a trade agreement. Why would it cede such power? We suggest an interpretation in which Congress uses FTA to forestall destructive competition between its members for protectionist rents. In our model: (i) FTA is never granted if an industry operates in the majority of districts; (ii) The more symmetric the industrial pattern, the more likely is FTA, since competition for protectionist rents is most punishing when bargaining power is symmetrically distributed; (iii) Widely disparate initial tari§s prevent free trade even with FTA

Fast-Track Authority: A Hold-Up Interpretation.

A central institution of US trade policy is Fast-Track Authority (FT), by whichCongress commits not to amend a trade agreement that is presented to it for ratifica-tion, but to subject the agreement to an up-or-down vote.We offer a new interpretation of FT based on a hold-up problem. If the US gov-ernment negotiates a trade agreement with the government of a smaller economy, asthe negotiations proceed, businesses in the partner economy, anticipating the openingof the US market to their goods, may make sunk investments to take advantage ofthe US market, such as quality upgrades to meet the expectations of the demandingUS consumer. As a result, when the time comes for ratification of the agreement, thepartner economy will be locked in to the US market in a way it was not previously.At this point, if Congress is able to amend the agreement, the partner country hasless bargaining power than it didex ante, and so Congress can make changes that areadverse to the partner. As a result, if the US wants to convince such a partner countryto negotiate a trade deal, it mustfirst commit not to amend the agreementex post.Inthis situation, FT is Pareto-improving

The Hopf algebra structure of the Z3_3-graded quantum supergroup GLq,j(1∣1)_{q,j}(1|1)

In this work, we give some features of the Z$_3$-graded quantum supergroup