A free entry model with linear costs is considered where firms first choose their entry time and then compete in the market according to the resulting timing decisions. Multiple equilibria arise allowing for infinitely many industry output configurations encompassing one limit-output dominant firm and the Cournot equilibrium with free entry as extreme cases. Sequential entry is never observed. ...

We use data from eBay to identify hundreds of thousands of instances in which retailers posted otherwise identical product listings with targeted variation in pricing and auction design. We use these matched listings to measure the dispersion in auction prices for identical goods sold by the same seller, to estimate nonparametric auction demand curves, to analyze the effect of buy it now option...

Empirical research has shown tremendous productivity di erences, even within narrowly de ned industries. A great host of studies is explainsing this productivity disparity by factors such as idiosyncratic technology shocks, input price di erences, management skills, or international trade. Although these explanations are undoubtedly important, the current paper suggests that product diversi cat...

I consider an oligopoly model where, prior to price competition, firms invest in persuasive advertising and induce brand loyalty in consumers who would otherwise buy the cheapest alternative on the market. This setting, in which persuasive advertising is introduced to homogenous product markets, provides an alternative explanation for price dispersion phenomena. Despite ex-ante symmetry, the eq...

The authors examine industry concentration for the U.S. food manufacturing sector. This study is the first to examine whether particular subsectors within the food manufacturing industry, which operate in the presence of industry-funded check-off programs such as marketing orders, are more or less concentrated than industries without such research and marketing programs. The authors find eviden...

This paper provides a model to explain the shakeout of the U.S. ATM and debit card industry, which emphasizes the role that a major product innovation — introducing the debit function in the mid 1980s — played in driving the network consolidation. Consistent with the theory, our empirical findings show that large networks had a better chance of adopting the debit innovation and surviving the sh...

Switching costs may facilitate monopoly pricing in a market with price competition between two suppliers of a homogenous good, provided the switching cost is above some critical level. It is also well known that asymmetric size of customer bases makes monopoly pricing more difficult. Adding consumer heterogeneity to the model we demonstrate that also composition of each firm’s customer base aff...

I analyze the innovation incentives under monopoly and duopoly provision of horizontally differentiated products purchased via bilateral negotiations, integrating the market structure and innovation literature with the holdup literature. I show that competition can improve local incentives for non-contractible investment. Because innovation levels are generally strategic substitutes, however, t...

This paper studies how firm performance is influenced by the strength of the industrial cluster (or industrial district) in which it is located. The paper presents estimates of firm-level growth models for a range of two-digit industries in the UK. In these models, employment in the firm’s own sector and employment in other sectors is taken as a measure the strength of the cluster. Strong posit...

This paper evaluates the impact that investigation and regulation of the UK petrol industry has had on the profitability of the companies. Using a gross margin for petrol, we estimate a series of variable parameter autoregressive processes. The results demonstrate that the 1979 Monopolies and Mergers Commission investigation into the industry, caused a long-term decline in profit margins in the...