Evolutionary arguments are often used to justify the fundamental behavioral postulates of competive equilibrium. Economists such as Milton Friedman have argued that natural selection favors profit maximizing firms over firms engaging in other behaviors. Consequently, producer efficiency, and therefore Pareto efficiency, are justified on evolutionary grounds. We examine these claims in an evolut...

Some of the world’s most profitable firms own platforms that exhibit network effects. A platform exhibits effects if, more people use it, valuable it becomes to each user....

One uses the model which has been already presented in articles by author: competition through prices (Bertrand competition), demands being deduced from consumers ‘utilities. can highlight three phenomena: “Monopolistic competition”: The products sold are enough differentiated, each firm having its “garden”, customers it keeps provided price is not higher than others’ prices. criterium “buy and...

Direct marketing firms want to transfer their message as efficiently as possible in order to obtain a profitable long-term relationship with individual customers. Much attention has been paid to address selection of existing customers and on identifying new profitable prospects. Less attention has been paid to the optimal frequency of the contacts with customers. We provide a decision support s...

Growth in electronic commerce (EC) continues to exceed growth rates in traditional markets and continues to offer new and different opportunities than traditional businesses. Its failures, however, suggest that many firms are not following successful strategies and have failed to align their EC strategies with business strategies. Observing practices at 12 companies provided insight into the im...

Downstream Merger with Oligopolistic Input Suppliers by Kjell Erik Lommerud, Odd Rune Straume, Lars Sørgard We examine how a downstream merger affects input prices and, in turn, the profitability of such a merger under Cournot competition with differentiated products. Input suppliers can be interpreted as ordinary upstream firms, or trade unions organising workers. If the input suppliers are pl...

Advances in information technology increasingly allow firms to identify expensive, high-cost customers, who are not only individually less profitable for firms but also raise the average marginal cost incurred by firms and thus impose a negative externality on inexpensive customers. Should competing firms share information that identifies such customers? The answer to this question has importan...

This paper empirically documents the performance and behavior of family firms listed on the French stock exchange between 1994 and 2000. On the French stock market, approximately one third of the firms are widely held, while the remaining two thirds are family firms. We find that, in the cross section, family firms largely outperform widely held corporations. This result holds for founder-contr...

This paper considers product-line expansion in horizontally-differentiated markets and examines conditions under which one firm’s product-line expansion can cause all firms to be more profitable. While it may at first seem that a firm’s profits will decrease when a competitor expands its product line because the firm’s sales will decrease in the presence of the new product, this intuition is in...

Bundling, which is the practice of selling two or more products or services in a package, is a pervasive marketing practice and is often used as a strategic competitive tool. However, there has not been enough consideration of competitive bundling situations where exit of a competitor is not a concern. In this paper, we address this issue by identifying conditions under which strategic competit...