This paper examines the equilibrium growth effect of money/inflation within a standard one-sector AK model of endogenous growth with the most generalized cash-in-advance constraint and wealth-enhanced preferences for social status. We show that the sign for the correlation between money and output growth depends crucially on (i) the liquidityconstrained ratio of consumption to investment expend...

We examine the relationship between the equilibrium number of the firms entering the market and socially efficient one. Salop (1979) investigates a mill pricing model and shows that the former is larger than the latter (excess entry theorem). We find that, in contrast to Salop (1979), the equilibrium number of the firms can be either larger or smaller than the efficient one. If the entry cost i...

Non-price competition strategy is a major health policy concern in many countries. This paper studies the treatment specialization choice and quality level competition among hospitals. We extend a two-stage spatial duopoly model, with the partially altruistic providers firstly choosing specialization and then determining quality level when the treatment price is set exogenously by central plann...

Recent developments in information technology (IT) have resulted in the collection of a vast amount of customer-specific data. As IT advances, the quality of such information improves. We analyze a unifying spatial price discrimination model that encompasses the two most studied paradigms of two-group and perfect discrimination as special cases. Firms use the available information to classify t...

We examine whether price dispersion is an equilibrium phenomenon or a cyclical phenomenon. We develop a finite strategy model of price dispersion based on the infinite strategy model of Burdett and Judd (1983). Adopting an evolutionary standpoint, we examine the stability of dispersed price equilibrium under perturbed best response dynamics. We conclude that when both sellers and consumers part...

Markets quickly converge to equilibrium even under information conditions that are much weaker than specified in theory. Given such conditions, how do firms set prices? We test whether, under weak information conditions, firms employ an aspiration level heuristic for price setting. Analyzing the pricing strategies of 745 used car dealers on the basis of online market data and interviews we find...