Economic Inquiry

Articles from Vol. 47, No. 3, July

Collusion Facilitating and Collusion Breaking Power of Simultaneous Ascending and Descending Price Auctions
I. INTRODUCTION This article explores the relationship between the market institutional (auction) environments, the preferences of multiple buyers over multiple items, and the outcomes that can be expected to evolve from the institutions. The article...
Constrained by Hours and Restricted in Wages: The Quality of Matches in the Labor Market
I. INTRODUCTION A first-principles approach to the labor market shows that the labor supply curve represents the minimum wage that a worker must receive to work a certain number of hours. However, a more nuanced analysis of the labor market involving...
Dynamics of Retail Advertising: Evidence from a Field Experiment
A firm's current advertising is generally associated with an increase in its sales, but this effect is generally short-lived. --Bagwell (2005, p. 30). I. INTRODUCTION It is accepted that advertising can have a short-run effect on sales. However,...
Game Theory for Playing Games: Sophistication in a Negative-Externality Experiment
I. INTRODUCTION A significant body of literature addresses the behavior of individuals in experimental games and how this behavior often deviates from theoretical predictions. Specifically, this literature raises a concern with the lack of observed...
Mixed Oligopoly, Sequential Entry, and Spatial Price Discrimination
I. INTRODUCTION The idea that a public firm can regulate oligopolistic behavior dates at least to Merrill and Schneider (1966), and researchers since then have spent considerable effort isolating whether or not the presence of the public firm actually...
On the Efficiency of AC/DC: Bon Scott versus Brian Johnson
We use tools from experimental economics to address the age-old debate regarding who was a better singer in the band AC/DC. Our results suggest that (using wealth maximization as a measure of "better") listening to Brian Johnson (relative to listening...
Posted Offer Markets in Near-Continuous Time: An Experimental Investigation
I. INTRODUCTION Posted offer markets occupy a central place in the laboratory investigation of market behavior. The posting of price decisions by sellers to consumers on a take-it-or-leave-it basis parallels important elements of naturally occurring...
Price Matching and the Domino Effect in a Retail Gasoline Market
I. INTRODUCTION For many years, there have been competition concerns regarding how retail gasoline prices are set in the United States and Canada. In several U.S. states, including Delaware, Maryland, Nevada, and Virginia, such concerns gave rise...
Self-Selection and the Efficiency of Tournaments
I. INTRODUCTION The use of promotion tournaments is fairly widespread, especially in the higher ranks of firms and organizations. The incentive property of tournaments has been studied earlier and extensively in the theoretical literature by Lazear...
Tacit Collusion in Auctions and Conditions for Its Facilitation and Prevention: Equilibrium Selection in Laboratory Experimental Markets
I. INTRODUCTION The research reported here explores both conditions under which tacit collusion develops and the remedies that might be taken to transform tacit collusion into a competitive solution. The issue is approached from the point of view...
Underpricing in Public Lotteries: A Critique of User-Pay and All-Pay Tariffs
I. INTRODUCTION A body of literature spanning from medical ethics to public economics has amassed regarding the nonmarket rationing of public resources. A dominant focus has surrounded the merits and shortcomings of alternative rationing mechanisms...
Why Do Energy Prices Matter? the Role of Interindustry Linkages in U.S. Manufacturing
I. INTRODUCTION Past research has documented a strong correlation between oil prices and economic activity, both in individual sectors and at the aggregate level. Davis and Haltiwanger (2001) find that oil shocks explain much of the variation in...