We analyze a duopoly model where …rms sell conspicuous goods to horizontallyand vertically-di¤erentiated consumers. These consumers care about both the intrinsic quality of the goods they purchase as well as the social status conveyed by these goods (namely, the social inference of their hidden type based on their purchase). Firms o¤er non-linear price and quality schedules that, in e¤ect, scre...

Controlling health care costs requires that limits be placed either on prices, quantities of services, or both. Prices are measurable and more easily controlled than is quantity and, consequently, health care cost containment has frequently focused on mechanisms for controlling prices. Regulatory approaches, however, may create market distortions and change access patterns. An alternative appro...

The paper explores the idea that advertising interferes with consumers’ memories of product experiences. We consider a two-period model where a monopolist sells an experience good to a buyer who may only imperfectly recall her first period experience. When advertising activates memory, it enables learning and may induce the buyer to try out the good initially. Moreover, while costly advertising...

This paper tests the proposition that Russian nominal prices were distorted to support bankrupt sectors, which is the foundation of the virtual economy. The input-output table for 1997 is converted from rubles into dollars using American prices as shadow values. Three sectors belonging to the intermediate stage of processing are found to have negative value-added. An alternative measure of the ...

Integrated assessment models lack a microeconomic foundation in modelling environmental damages to the economy. To overcome this, damage coefficients are incorporated in standard microeconomic models. Firms and consumers take both damages and prices as given. Demand, supply, profit and expenditure functions under damage coefficients are derived that allow easy implementation in applied economic...

The current debate about slow recovery from the Great Deflation, accompanied by persistent threat of price deflation, has highlighted the relevance of liquidity as a necessary factor to ensure stability and growth. An important branch of the literature focuses on the Safe Assets (i.e., liquid assets which market values are highly resilient in terms of goods and services), and pays special atten...

In this paper we propose simulation based Bayesian inference procedures in a cost system that includes the cost function and the cost share equations augmented to accommodate technical and allocative inefficiency. Markov Chain Monte Carlo techniques are proposed and implemented for Bayesian inferences on costs of technical and allocative inefficiency, input price distortions and over(under-) us...

We study second-degree price discrimination in markets where the product traded by the monopolist is access to other agents. We derive necessary and sufficient conditions for the welfareand the profit-maximizing mechanisms to employ a single network or a menu of non-exclusive networks. We characterize the optimal matching schedules under a wide range of preferences, derive implications for pric...

This study examines the role of pre-IPO discretionary accruals in the valuation and first day initial returns of IPOs. We find that IPO offer price is unaffected whereas market closing price is positively associated with the levels of pre-IPO discretionary accruals for issuers with aggressively reported earnings. We also find that this relative over-valuation of managed earnings by the markets ...

Background High pharmaceutical expenditure is one of the main concerns for policymakers worldwide. In Colombia, a middle-income country, outpatient prescription represents over 10% of total health expenditure in the mandatory benefits package (POS), and close to 90% in the complementary government fund (No POS). In order to control expenditure, since 2011, the Ministry of Health introduced pric...