This paper examines a two-period duopoly where consumers are lockedin by switching costs that they face in the second period. The paper’s main focus is on the question of how the consumer lock-in affects the firms’ choice of product durability. We show that firms may face a prisoners’ dilemma situation in that they simultaneously choose nondurable products although they would have higher profit...

In addition to the common analysis of the Kauffman NK model where the value of K and the structure of interaction is given, the aim of this paper is to study what would be the values of these two parameters if they were endogenized. Thus, a model is proposed where firms and business schools coordinate to search for high peaks in their respective landscapes using evolutionary algorithms. The mai...

The question of learning versus self-selection has dominated the micro-econometric literature on firm export decisions, without leading to any firm conclusions. In part this reflects the limited information content of the data typically used. In this paper we use survey data on UK firms to offer some new insights into this debate. Consistent with the literature we find that the impacts of expor...

This paper considers the effect of different firm leadership on the innovative performance of firms from seven EU countries. We investigate whether owner-led or manager-led firms achieve a larger share of their turnover with product innovations. Economic theory does not propose clear answers to this question. In the empirical analysis, it turns out that the manager-led firms are more active inn...

We propose an alternative market design to the current credit ratings industrial organization. An issuer delegates a pass-through non-monitoring trust to acquire ratings from credit ratings agencies (CRAs). The trust pays outcome contingent fees, such that truth-telling is incentive compatible for CRAs, eliminating ratings inflation. Moreover, because the trust acts as an intermediary, it elimi...

In the present article, mechanistic equations for membrane transport of N + 1-component solutions have been derived. The major specific investigation result is the introduction - for ternary solutions - of two diffusion coefficients omega(d1) and omega(d2) for solutes, as well as two cross coefficients omega(d12) and omega(d21) for these solutes. The latter parameters may be treated as coeffici...

Financial constraints have been found to play an important role on various aspects of firm behavior. Yet, their effects on firm survival have been largely neglected. We use a panel of 9420 newly established UK firms over the period 1997-2002 to study the effects of financial variables on firms’ failure probabilities, differentiating firms into globally engaged and purely domestic. Estimating a ...

We analyze a game of persuasion which combines information acquisition and adverse selection. The sender can credibly transmit any information she gathers but cannot directly reveal her type to the receiver. Her payoff depends both on the news content and her perceived ability. We show that a sanitization equilibrium in which the sender reveals good news and conceals bad news prevails for mild ...

This version of September 3, 2006. German chemical manufacturing industry is marked by two major structural changes during 1992–2004. Firstly, number of firms was ranging extensively: from 676 to 901, while only 96 firms represented balanced panel. Secondly, size of the firm dropped considerably—by 88%. This paper is intended to shed light on both phenomena. Based on reliable census data analys...

A budget-constrained buyer wants to purchase items from a shortlisted set. Items are differentiated by observable quality and sellers have private reserve prices for their items. The buyer’s problem is to select a subset of maximal quality. Money does not enter the buyer’s objective function, but only his constraints. Sellers quote prices strategically, inducing a knapsack game. We report the B...