nep-mic New Economics Papers
on Microeconomics
Issue of 2016‒03‒29
twenty-six papers chosen by
Jing-Yuan Chiou
National Taipei University

  1. The value of incumbency in heterogeneous platforms By Biglaiser, Gary; Crémer, Jacques
  2. The advertising-financed business model in two-sided media markets By Anderson, Simon; Jullien, Bruno
  3. Net Neutrality, Pricing Instruments and Incentives By Joshua S. Gans; Michael L. Katz
  4. Behavior-Based Price Discrimination in a Multi-Dimensional Preferences Market By Rosa-Branca Esteves; Qihong Liu; Jie Shuai
  5. An economic theory of religious belief By Strulik, Holger
  6. Public Persuasion By Marie Laclau; Ludovic Renou
  7. Procrastination in Teams By Joshua S. Gans; Peter Landry
  8. On The Transmission of Continuous Cultural Traits By Cheung, Man-Wah; WU, JIABIN
  9. Screening and Adverse Selection in Frictional Markets By Benjamin Lester; Ali Shourideh; Venky Venkateswaran; Ariel Zetlin-Jones
  10. An Efficient Mechanism for Competitive Markets with Adverse Selection By Anastasios Dosis
  11. Markets for leaked information By Huck, Steffen; Weizsäcker, Georg
  12. One-sided learning about one's own type in a two-sided search model By Akiko Maruyama
  13. Conformity, information and truthful voting By Bernado Moreno; María del Pino Ramos-Sosa; Ismael Rodríguez-Lara
  14. On Signalling and Screening By Anastasios Dosis
  15. Harmful transparency in teams By Kanti Parimal Bag; Nona Pepito
  16. Dynamic Savings Choices with Disagreements By Dan Cao; Iván Werning
  17. A Theory of Bidding Dynamics and Deadlines in Online Retail By Dominic Coey; Bradley Larsen; Brennan Platt
  18. Proportional payoffs in legislative bargaining with weighted voting: a characterization By Maria Montero
  19. The Sorry Clause By Srivastava, Vatsalya
  20. Bertand Competition and the Existence of Pure Strategy Nash Equilibrium in Markets with Adverse Selection By Anastasios Dosis
  21. Existence of Share Equilibrium in Symmetric Local Public Good Economies∗ By Anne Van den nouweland; Myrna Wooders
  22. "Rational Expectations and Farsighted Stability" By Bhaskar Dutta; Rajiv Vohra
  23. Endogenous Correlated Network Dynamics By Frank Page; Rui Gong; Myrna Wooders
  24. Multi-winner scoring election methods: Condorcet consistency and paradoxes By Mostapha Diss; Ahmed Doghmi
  25. Pricing Strategies in Advance Selling: Should a Retailer Offer a Pre-order Price Guarantee? By Oksana Loginova
  26. On the private and social desirability of mixed bundling in complementary markets with cost savings By Christine Halmenschlager; Andrea Mantovani

  1. By: Biglaiser, Gary; Crémer, Jacques
    Abstract: We study the dynamics of competition in a model with network effects, an incumbent and entry. We propose a new way of representing the strategic advantages of incumbency in a static model. We then embed this static analysis in a dynamic framework with heterogeneous consumers. We completely identify the conditions under which inefficient equilibria with two platforms will emerge at equilibrium; explore the reasons why these inefficient equilibria arise; and compute the profits of the incumbent when there is only one platform at equilibrium.
    Date: 2016–03
  2. By: Anderson, Simon; Jullien, Bruno
    Abstract: This chapter focuses on the economic mechanisms at work in recent models of advertising finance in media markets developed around the concept of two-sided markets. The objective is to highlight new and original insights from this approach, and to clarify the conceptual aspects. The chapter first develops a canonical model of two-sided markets for advertising, where platforms deliver content to consumers and resell their "attention" to advertisers. A key distinction is drawn between free media and pay media, where the former result from the combination of valuable consumer attention and low ad nuisance cost. The first part discusses various conceptual issues such as equilibrium concepts and the nature of inefficiencies in advertising markets, and concrete issues such as congestion and second-degree discrimination. The second part is devoted to recent contributions on issues arising when consumers patronize multiple platforms. In this case, platforms can only charge incremental values to advertisers which reduces their market power and affects their price strategies and advertising levels. The last part discusses the implications of the two-sided nature of the media markets for the choice of content and diversity.
    Keywords: Two-sided markets, ad-financed business model, single-homing consumers, competitive bottlenecks, multi-homing consumers, media see-saws, advertising congestion, genre choice, equilibrium platform variety.
    Date: 2016–03
  3. By: Joshua S. Gans; Michael L. Katz
    Abstract: We correct and extend the results of Gans (2015) regarding the effects of net neutrality regulation on equilibrium outcomes in settings where a content provider sells its services to consumers for a fee. We examine both pricing and investment effects. We extend the earlier paper’s result that weak forms of net neutrality are ineffective and also show that even a strong form of net neutrality may be ineffective. In addition, we demonstrate that, when strong net neutrality does affect the equilibrium outcome, it may harm efficiency by distorting both ISP and content provider investment and service-quality choices.
    JEL: D4 D42 D43 L1 L12 L13
    Date: 2016–02
  4. By: Rosa-Branca Esteves (Universidade do Minho - NIPE); Qihong Liu (Department of Economics, University of Oklahoma, USA); Jie Shuai (Wenlan School of Business, Zhongnan University of Economics and Law, China)
    Abstract: This article is a fir rst look at the profi t and welfare effects of behavior-based price discrimination in a two-period multi-dimensional preferences model. Compared to one-dimensional models, we show that fi rms compete less aggressively in both periods and so new results are obtained. Specifically, under forward looking consumers and two symmetric dimensions, BBPD boosts industry profi ts at the expense of consumers. However, we show that the standard one-dimensional welfare results can prevail under asymmetric dimensions and myopic consumers.
    Keywords: Multi-dimension; competitive price discrimination; customer recognition
    JEL: D43 L13 L40
    Date: 2016
  5. By: Strulik, Holger
    Abstract: In this paper I consider how individuals allocate their time between church attendance (and other religious activities) and secular leisure activities. Moreover individuals use a cognitive style, which is either intuitive-believing or reflective-analytical. I assume that the full benefit from religious activities is achieved by intuitive believers. The model predicts that, ceteris paribus, wealthier individuals and individuals with higher cognitive ability are more likely to abandon the intuitive-believing cognitive style. They may continue to attend church but do so less frequently than intuitive believers. In general equilibrium, there exists a locally stable steady state where believing and frequent church attendance is widespread across the social strata. A sufficiently large negative shock (e.g. the Enlightenment, repeal of Sunday shopping laws), however, initiates the gradual secularization of society.
    Keywords: religiosity,church attendance,cognitive style,consumerism,fuzzy fidelity
    JEL: N30 D11 Z12 Z13
    Date: 2016
  6. By: Marie Laclau (CNRS - Centre National de la Recherche Scientifique, PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - Institut national de la recherche agronomique (INRA) - École des Ponts ParisTech (ENPC) - CNRS - Centre National de la Recherche Scientifique, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Ludovic Renou (University of Essex - University of Essex)
    Abstract: This short paper studies the problem of public persuasion, that is, when a sender has to persuade multiple receivers, possibly having heterogenous beliefs, with the same information for all. We show that public persuasion constrains the sender in how he can influence the beliefs of receivers: if the sender wants to influence the beliefs of one particular receiver, he loses all controls over the beliefs of the others. This observation partially generalizes to targeted persuasion.
    Keywords: Public,targeted,persuasion,multiple priors,splitting,concavification
    Date: 2016–03–08
  7. By: Joshua S. Gans; Peter Landry
    Abstract: Naively present-biased agents are known to be severe procrastinators. In team settings, procrastination can represent a form of free-riding that, in excess, can jeopardize a team's ability to meet a deadline. Here we show how naivete and present bias, despite their reputations, can be desirable traits in a teammate, enabling a team to optimize its performance while eliminating inefficient free-riding. These benefits emerge only from a more flexible specification (in comparison to existing models) as to how naive players reassess prior beliefs upon confronting present bias. By allowing the 'depth' and 'direction' of such reassessments to vary, our model links present-biased discounting theories to the recently-revived interest in modeling non-Bayesian reactions to null events, while offering a distinct approach reminiscent of level-k reasoning. Key themes from our results include the value of behavioral diversity, the opposite effects of 'introspection' and 'extrospection' on motivation, and that under- and over-thinking can both undermine efficiency.
    JEL: C72 D03 M11
    Date: 2016–01
  8. By: Cheung, Man-Wah; WU, JIABIN
    Abstract: This paper generalizes the discrete cultural transmission model proposed by Bisin and Verdier (2001) to continuous trait space. The resulting cultural evolutionary dynamic can be characterized by a continuous imitative dynamic in a population game in which a player's payoff is equal to the aggregate cultural intolerance he has towards other agents. We show that cultural heterogeneity is always preserved. In addition, we model each agent's cultural intolerance towards another agent as an increasing function of cultural distance --- the distance between that other agent's trait and his own trait in the trait space. This captures people's general tendencies of evaluating culturally more distant people with stronger biases, and it is most easily modeled on a continuous trait space. We find that the curvature of the cultural intolerance function plays an important role in determining the long-run cultural phenomena. In particular, when cultural intolerance is a convex function of cultural distance, only the most extremely polarized state is a stable limit point.
    Keywords: Cultural transmission, Continuous trait space, Cultural evolution, Imitative Dynamic, Polarization
    JEL: A14 C72 C73 D10 Z13
    Date: 2016–03–09
  9. By: Benjamin Lester; Ali Shourideh; Venky Venkateswaran; Ariel Zetlin-Jones
    Abstract: We incorporate a search-theoretic model of imperfect competition into an otherwise standard model of asymmetric information with unrestricted contracts. We develop a methodology that allows for a sharp analytical characterization of the unique equilibrium, and then use this characterization to explore the interaction between adverse selection, screening, and imperfect competition. On the positive side, we show how the structure of equilibrium contracts---and hence the relationship between an agent's type, the quantity he trades, and the corresponding price---are jointly determined by the severity of adverse selection and the concentration of market power. This suggests that quantifying the effects of adverse selection requires controlling for the market structure. On the normative side, we show that increasing competition and reducing informational asymmetries can be detrimental to welfare. This suggests that recent attempts to increase competition and reduce opacity in markets that suffer from adverse selection could potentially have negative, unforeseen consequences.
    JEL: D41 D42 D43 D82 D83 D86 L13
    Date: 2015–12
  10. By: Anastasios Dosis (ESSEC - ESSEC Business School - Essec Business School - Economics Department - Essec Business School, THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS - Centre National de la Recherche Scientifique)
    Abstract: I construct an efficient mechanism for competitive markets with adverse selection. In the mechanism, each company offers two menus of contracts: a public menu and a private menu. The union of all the public menus needs to be offered by every active company in the market. On the contrary, a private menu concerns only the company that offers it. I show that this simple mechanism reduces the set of profitable deviations to the extent that a pure-strategy equilibrium exists in every market with adverse selection. Furthermore, I characterise general, well-studied environments in which the set of equilibrium allocations coincides with the set of efficient allocations.
    Keywords: Efficiency,Adverse Selection,Competition,Mechanism Design,Existence
    Date: 2016–02–22
  11. By: Huck, Steffen; Weizsäcker, Georg
    Abstract: We study markets for sensitive personal information. An agent wants to communicate with another party but any revealed information can be intercepted and sold to a third party whose reaction harms the agent. The market for information induces an adverse sorting effect, allocating the information to those types of third parties who harm the agent most. In equilibrium, this limits information transmission by the agent, but never fully deters it. We also consider agents who naively provide information to the market. Their presence renders traded information more valuable and, thus, harms sophisticated agents by increasing the third party's demand for information. Halfbaked regulatory interventions may hurt naive agents without helping sophisticated agents. Comparing monopoly and oligopoly markets, we find that oligopoly is often better for the agent: it requires a higher value of traded information and therefore has to grant the agent more privacy.
    Keywords: privacy,markets for information,naivete
    JEL: C72 D11 D18 D43
    Date: 2016
  12. By: Akiko Maruyama (National Graduate Institute for Policy Studies; Faculty of Economics, University of Marketing and Distribution Sciences)
    Abstract: This study analyzes a two-sided search model in which agents are vertically heterogeneous and agents on one side do not know their own type. Agents with imperfect self-knowledge update their beliefs based on the offers or rejections they receive from others. The results presented in this paper are as follows. An agent with imperfect self-knowledge lowers his or her reservation level if the agent receives a rejection that leads him or her to revise belief downward. However, an agent with imperfect self-knowledge does not raise his or her reservation level even if the agent receives an offer that leads to revise his or her belief upward. As a result, an agent with imperfect self-knowledge has the highest reservation level when he or she has just entered the market, and then a series of meetings gradually lowers his or her reservation level through the duration of the search.
    Date: 2016–03
  13. By: Bernado Moreno (Department of Economic Theory, Universidad de Málaga); María del Pino Ramos-Sosa (Department of Economic Theory, Universidad de Málaga); Ismael Rodríguez-Lara (Department of Economics, Middlesex University London)
    Abstract: We induce conformity in a binary-decision voting game by assuming that agents may derive some utility by voting the same option that others. Theoretically, we show that truthful voting is the unique equilibrium without conformity. Introducing conformity enlarges the set of equilibria, which includes voting profiles in which agents do not necessarily vote for their preferred option. If agents are informed that others will vote truthfully, truthful voting is more pervasive in equilibrium. In our setting, the effects of conformity and information depend on the voting rule and the preferred option of each agent. We provide empirical support for our theoretical predictions by means of a laboratory experiment.
    Keywords: Issue-Silence; truthful voting, conformity, information, experimental evidence.
    JEL: C91 C92 D71 D72
    Date: 2016–01
  14. By: Anastasios Dosis (ESSEC - ESSEC Business School - Essec Business School - Economics Department - Essec Business School, THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The two games usually employed to model markets with asymmetries of information are the signalling game and the screening game. In the signalling game, an equilibrium may not be efficient due to the arbitrariness in the off-the-equilibrium-path beliefs. In the screening game, a pure strategy Nash equilibrium may fail to exist because of " cream-skimming " deviations. Perhaps surprisingly, I show how in a game that combines signalling and screening, an equilibrium generically exists and is efficient.
    Keywords: efficiency,existence,Signalling,screening,information economics
    Date: 2016–03–09
  15. By: Kanti Parimal Bag (Department of Economics - NUS - National University of Singapore); Nona Pepito (ESSEC - ESSEC Business School - Essec Business School - Economics Department - Essec Business School, THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In a two-period continuous effort investment game as in Mohnen, et al. (2008), we demonstrate that peer transparency can be strictly harmful. This contrasts with Mohnen et al.'s result that transparency, through the observability of interim efforts, induces more effort and is thus beneficial if team members are inequity-averse. If, instead, preferences are standard utilitarian, the marginal benefit is decreasing and marginal cost is increasing in a player's own effort, then players' collective and individual efforts are strictly less with transparency than under non-transparency.
    Keywords: free-riding,Transparency, team, perfect substitution
    Date: 2016–01–26
  16. By: Dan Cao; Iván Werning
    Abstract: We study a dynamic savings game in continuous time, where decision makers rotate in and out of power. Agents value consumption more highly while in power. Our setup applies to individuals under a behavioral interpretation, or to governments under a political-economy interpretation. We prove existence of Markov equilibria by construction and provide tight characterizations. Our analysis isolates the importance of a local disagreement index, which we define as the ratio of marginal utilities for those in and out of power. If disagreement is constant our setup specializes to hyperbolic discounting and we provide novel results even in this context, but we also allow disagreement to vary with spending. When disagreements are sufficiently high we show that an equilibrium with dissavings exists; conversely, when disagreement are sufficiently low, an equilibrium with savings emerges. When disagreements vary sufficiently with spending rich dynamics are possible. In particular, an equilibrium with poverty traps—dissaving at low levels of wealth and savings at high levels of wealth—exists when disagreements decrease with spending. In contrast, when disagreements increase with spending, wealth may convergence to a unique interior steady state. We also investigate conditions for continuous, discontinuous and multiple equilibria. Finally, we show how the model can be solved in reverse, inverting to find primitives that support an equilibrium.
    JEL: C61 C62 C71 C73 D31 D91 H31 I3 O12
    Date: 2016–02
  17. By: Dominic Coey; Bradley Larsen; Brennan Platt
    Abstract: We present an equilibrium search model that parsimoniously rationalizes the use of auctions as a sales mechanism for new-in-box goods--a frequent occurrence in online retail markets--and analyze whether the existence of these auctions is welfare enhancing relative to a market consisting only of posted prices. Buyers have a deadline by which the good must be purchased, and sellers choose between auctions and posted-price mechanisms. As the deadline approaches, buyers increase their bids and are more likely to buy through posted-price listings. The model predicts equilibrium price dispersion even for new, homogeneous goods. Using data on one million auction and posted-price listings for new-in-box items on, we find robust evidence consistent with our model. As predicted, bidders increase their bids from one auction to the next, equilibrium price dispersion exists, and auctions and posted-price listings coexist. Fitting the model to the data, we find that retail auctions increase total welfare by 1.8% of the average retail price if listing fees exactly cover platform costs, but reduce welfare by 2.3% if listing fees are pure profit
    JEL: C73 D44 D83
    Date: 2016–02
  18. By: Maria Montero (School of Economics, University of Nottingham)
    Abstract: We examine the relationship between voting weights and expected equilibrium payoffs in legislative bargaining and provide a necessary and sufficient condition for payoffs to be proportional to weights. This condition has a natural interpretation in terms of the supply and demand for coalition partners. An implication of this condition is that Snyder et al.Â’s (2005) result, that payoffs are proportional to weights in large replicated games, does not necessarily extend to the smaller games that arise in applications. Departures from proportionality may be substantial and may arise even in well-behaved (homogeneous) games.
    Keywords: legislative bargaining, weighted voting, proportional payoffs
    Date: 2016–02
  19. By: Srivastava, Vatsalya (Tilburg University, Center For Economic Research)
    Abstract: When players face uncertainty in choosing actions, undesirable outcomes cannot be avoided. Accidental defections caused by uncertainty, that does not depend on the level of care, require a mechanism to reconcile the players. This paper shows the existence of a perfect sorry equilibrium in a game of imperfect public monitoring. In the sorry equilibrium, costly apology is self-imposed in case of accidental defections, making private information public and allowing cooperation to resume. Cost of the apology required to sustain this equilibrium is calculated, the efficiency characteristics of the equilibrium evaluated and outcomes compared to those from other bilateral social governance mechanisms and formal legal systems. It is argued that with the possibility of accidental defections, other social mechanisms have limitations, while formal legal systems can generate perverse incentives. Therefore, apologies can serve as a useful economic governance institution.
    Keywords: apology; sorry; imperfect public monitoring; uncertainty; social norms; economics governance; Legal institutions; incentives
    JEL: D80 K40 K41 K42 D02
    Date: 2016
  20. By: Anastasios Dosis (ESSEC - ESSEC Business School - Essec Business School - Economics Department - Essec Business School, THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS - Centre National de la Recherche Scientifique)
    Abstract: I analyse a market with adverse selection in which companies competè a la Bertrand by offering menus of contracts. Contrary to Rothschild and Stiglitz (1976), I allow for any finite number of types and states and more general utility functions. I define the generalised Rothschild-Stiglitz Profile of Actions (RSPA), and I show that, in every possible market, if the RSPA is efficient, it is also a pure strategy Nash equilibrium profile of actions. On the contrary, I show that in markets in which the RSPA is not efficient, preferences admit an expected utility representation with strictly increasing and strictly concave VNM utilities and a weak sorting condition holds, no pure strategy Nash equilibrium exists.
    Keywords: Nash Equilibrium,Adverse Selection, Bertrand Competition
    Date: 2016–02–17
  21. By: Anne Van den nouweland (University of Oregon); Myrna Wooders (Vanderbilt University)
    Abstract: Share equilibrium was introduced in van den Nouweland and Wooders (2011) as an extension of ratio equilibrium to local public good economies. In that paper, we took an axiomatic approach to motivate share equilibrium. In the current paper we consider questions related to the existence of share equilibrium and we derive a necessary and sufficient condition for the existence of share equilibrium in symmetric economies. Along the way, we develop a deeper understanding of the possible variation in share equilibrium by considering when symmetric players necessarily have the same share indices in equilibrium.
    Keywords: Share equilibrium, Local public goods, Cost shares, Core, Top convexity
    JEL: H4 C7
    Date: 2016–03–13
  22. By: Bhaskar Dutta; Rajiv Vohra
    Abstract: In the study of farsighted coalitional behavior, a central role is played by the von Neumann-Morgenstern (1944) stable set and its modification that incorporates farsightedness. Such a modification was first proposed by Harsanyi (1974) and has recently been re-formulated by Ray and Vohra (2015). The farsighted stable set is based on a notion of indirect dominance in which an outcome can be dominated by a chain of coalitional ‘moves’ in which each coalition that is involved in the sequence eventually stands to gain. However, it does not require that each coalition make a maximal move, i.e., one that is not Pareto dominated (for the members of the coalition in question) by another. Nor does it restrict coalitions to hold common expectations regarding the continuation path from every state. Consequently, when there are multiple continuation paths the farsighted stable set can yield unreasonable predictions. We resolve this difficulty by requiring all coalitions to have common rational expectations about the transition from one outcome to another. This leads to two related concepts: the rational expectations farsighted stable set (REFS) and the strong rational expectations farsighted stable set (SREFS). We apply these concepts to simple games and to pillage games to illustrate the consequences of imposing rational expectations for farsighted stability.
    Date: 2015
  23. By: Frank Page (Indiana University); Rui Gong (Indiana University); Myrna Wooders (Vanderbilt University)
    Abstract: We model the structure and strategy of social interactions prevailing at any point in time as a directed network and address the following question: given the rules of network and coalition formation, preferences of individuals over networks, strategic behavior of coalitions in forming networks, and the trembles of nature, what network and coalitional dynamics are likely to emergence and persist. We formulate the problemas a dynamic, stochastic game and v equilibrium (in network and coalition formation strategies), (ii) together with the trembles of nature, this correlated stationary equilibrium determines an equilibrium Markov process of network and coalition formation, and (iii) this endogenous Markov process possesses a finite set of ergodic measures, and generates a finite, disjoint collection of nonempty subsets of networks and coalitions, each constituting a basin of attraction. Moreover, we extend to the setting of endogenous Markov dynamics the notions of pairwise stability (Jackson-Wolinsky, 1996) and the path dominance core (Page Wooders, 2009a). We show that in order for any network-coalition pair to emerge and persist, it is necessary that the pair reside in one of finitely many basins of attraction. The results we obtain here build on Page and Wooders (2009a)and the seminal contributions of Jackson and Watts (2002), Konishi and Ray (2003), and Dutta, Ghosal, and Ray (2005).
    Keywords: KEYWORDS: games of network formation, stationary Markov correlated equilibrium, equilibrium Markov process of network formation, basins of attraction, Harris decomposition, ergodic probability measures, dynamic path dominance core,dynamic pairwise stability.
    JEL: C7 C6
    Date: 2016–03–13
  24. By: Mostapha Diss (Université de Lyon, Lyon F- 69007, France; CNRS, GATE L-SE, Ecully, F- 69130, France; Université J. Monnet, Saint-Etienne, F- 42000, France); Ahmed Doghmi (University of Rabat, Mohammadia School of Engineering, the QSM Laboratory, Avenue Ibn Sina B.P. 765 Agdal, 10100 Rabat, Morocco)
    Abstract: The goal of this paper is to propose a comparison of four multi-winner voting rules, k-Plurality, k-Negative Plurality,k-Borda, and Bloc, which can be considered as generalisations of well-known single-winner scoring rules. The first comparison is based on the Condorcet committee efficiency which is defined as the conditional probability that a given voting rule picks out the Condorcet committee, given that such a committee exists. The second comparison is based on the likelihood of two paradoxes of committee elections: The Prior Successor Paradox and the Leaving Member Paradox which occur when a member of an elected committee leaves. In doing so, using the well-known Impartial Anonymous Culture condition, we extend the results of Kamwa and Merlin (2015) in two directions. First, our paper is concerned with the probability of the paradoxes no matter the ranking of the leaving candidate. Second, we do not only focus on the occurrence of these paradoxes when one wishes to select a committee of size k = 2 out of m = 4 candidates but we consider more values of k and m.
    Keywords: Multi-winner voting rules, committee, Condorcet committee efficiency, paradoxes, probability
    JEL: D71 D72
    Date: 2016
  25. By: Oksana Loginova (University of Missouri)
    Abstract: I consider a retailer who sells a new product over two periods: advance and regular selling seasons. Experienced consumers learn their valuations for the product in the advancesellingseason,whileinexperiencedconsumerslearnonlywhentheproductbecomes availableintheregularsellingseason. Theretailerisuncertainaboutthenumberofinexperienced consumers. Production takes place between the periods. Unsold units are scrapped at a price that is below the retailer’s marginal cost, which makes it costly to produce and notsell. Ishowthat whenconsumersare lessheterogeneousin theirvaluations, theretailer shouldimplementadvancesellingandofferapre-orderpriceguarantee. Forsomeparameter con?gurations a pre-order price guarantee acts as a commitment device not to decrease thepriceintheregularsellingseason. Inothersituations,itenablesthesellertoreacttothe information that is obtained from pre-orders by increasing or decreasing the price. When consumersaremoreheterogeneousintheirvaluations,themarketsizeuncertaintyissmall, or the scrap value is high, the retailer should not implement advance selling.
    Keywords: advance selling, demand uncertainty, learning, price guarantee, price commitment, the Newsvendor problem.
    JEL: C72 D42 L12 M31
    Date: 2013
  26. By: Christine Halmenschlager (CRED, Université Panthéon-Assas Paris II); Andrea Mantovani (University of Bologna & IEB)
    Abstract: The aim of this paper is to study both the private and the social desirability of a mixed bundling strategy that generates a cost savings effect. We confirm that mixed bundling is the dominant strategy for multiproduct firms, although it may give rise to a prisoner’s dilemma. Moreover, we show that mixed bundling may maximise social welfare, provided that cost savings are sufficiently high. Finally, we highlight the parametric regions where the social and the private interests coincide, and those where they do not. The recent evolution of broadband telecommunications services provides an ideal framework to apply our theoretical predictions.
    Keywords: Regulation, firm performance, telecommunications, multinational firms
    JEL: L51 L25 L96 F23
    Date: 2016

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