Tag: Bureau of Economics

The paper shows that the answer is no. Holmstrom (1979) and Shavell (1979) show that the sellthe firm contract does not achieve the first best when the principal and the agent have different...

This paper examines the output and profit effects of horizontal mergers between upstream firms in intermediate goods markets. We consider market settings in which the upstream firms sell...

The off-net-cost pricing principle argues that under a broad range of environments a positive “access” charge paid by originating networks to interconnected terminating networks would cause networks...

This paper highlights some of the staff analyses on the Royal Caribbean/Princess/Carnival investigations.

PUBLISHED AS: Avoiding Aggregation Bias in Demand Estimation: A Multivariate Promotional Disaggregation Approach Estimating cross-brand promotional effects with aggregate data requires knowledge of...

Zone pricing in wholesale gasoline markets is a contentious topic in the public policy debate. Refiners contend that they use zone pricing to be competitive with local rivals. Critics claim that zone...

Across many forms of rent seeking contests, the impact of risk aversion on equilibrium play is indeterminate. We design an experiment to compare individuals’ decisions across three contests which are...

PUBLISHED AS: Estimating the Cost of New Drug Development: Is it really $802m? This paper analyses a detailed data set on drugs in human clinical trials around the world between 1989 and 2002. The...

Is the second best outcome of static agency models renegotiation proof? In models with one period of renegotiation, Fudenberg and Tirole (1990) answer no when the principal makes the offer, while Ma...

PUBLISHED AS: Market and Non-Market Barriers to Internet Wine Sales: The Case of Virginia This study investigates the effects of the Commonwealth of Virginia’s ban on direct wine shipments from out-of...

PUBLISHED AS: The Loss Leader Is a Turkey: Targeted Discounts from Multi-product Competitors When some customers are more profitable to serve than others, one might expect sellers to compete more...

Critical loss analysis is often used to argue that firms with large margins have more to lose from a reduction in sales and hence are less likely to increase prices. This argument ignores the fact...

Our objective is to determine the effect of ownership type (for-profit, not-for-profit, government) on firm conduct in hospital markets. Secondary objectives include estimating hospital demand systems...

A well-known theory (Lazear, 1979) argues that wage patterns in which younger workers are underpaid relative to marginal revenue product and older workers are overpaid relative to marginal revenue...

This paper analyzes the value of using data from on-line auctions to determine product market definitions and competitive effects of mergers. Traditionally this type of demand analysis has been based on...

This paper reviewed economic issues at the FTC in 2002.

A basic tenet of incentive theory states that there is a trade-off between risk and incentives. By implication, greater variation in firm profits leads to a reduction in the use of profit sharing...

The paper empirically analyzes the economic theory and intuition that the "free rider" problem will overwhelm firm-wide incentives in large firms. Kandel and Lazear (1992) claim that in a simple model...