Economic Inquiry

Articles from Vol. 48, No. 2, April

A Theory of Bilateral Oligopoly
I. INTRODUCTION The seven largest refiners of gasoline on the west coast of the United States account for over 95% of the production of California Air Resources Board (CARB) certified gasoline sold in the region. The seven largest brands of gasoline...
Centralized and Decentralized Management of Local Common Pool Resources in the Developing World: Experimental Evidence from Fishing Communities in Colombia
I. INTRODUCTION In this article, we report the results of a series of common pool resource experiments conducted in three regions of Colombia that depend on small-scale fishing. Our field experiments were designed to investigate whether regulations...
Centralized or Decentralized Information: Which Is Better for Providing Incentives?
I. INTRODUCTION Consider a country's business environment or the quality of a country's infrastructures. Information about these characteristics may circulate in different ways. Data gathering may be relegated to an international watchdog, which...
Code Creation in Endogenous Merger Experiments
I. INTRODUCTION Groups and organizations often use specialized language, or "code," for coordinating economic activity. In this paper, we focus on the experimental creation of code among small laboratory groups, and what happens when groups are...
Desperation or Desire? the Role of Risk Aversion in Marriage
I. INTRODUCTION Attitudes toward risk are an important determinant of a vast array of decisions. Such decisions include ones with a big impact on life: the choice of education, the choice of career, investment decisions, and even when and if to...
Do Sunk Costs Matter?
"Let Bygones Be Bygones." --Khieu Samphan, former head of state of the Khmer Rouge government, asking Cambodians to forget the more than one million people who died under his government's rule. I. INTRODUCTION Sunk costs are costs that have...
Entry Coordination and Auction Design with Private Costs of Information Acquisition
I. INTRODUCTION In most auction literature, bidders are passively endowed with private information about their valuations. The analysis then focuses on optimal elicitation of private information. On many occasions, bidders may instead have to incur...
Guns and Oil: An Analysis of Conventional Weapons Trade in the Post-Cold War Era
I. INTRODUCTION The end of the Cold War saw a dramatic reduction in the international trade in conventional weapons. From an all-time peak of 86.7 billion 19995 in 1987, world arms imports fell to 51.6 billion 19995 in 1999 (Bureau of Verification...
Information Disclosure Policies: Evidence from the Electricity Industry
I. INTRODUCTION Developed nations' environmental policies have evolved substantially in the past several decades. Early pollution control programs involved command and control approaches. Policies then frequently included pollution charges, tradable...
Monopoly[R] Pricing
I. INTRODUCTION There is a large and rich literature in economics on monopoly pricing (e.g., see the reviews in Braeutigam 1998; Ordover and Saloner 1998; Varian 1998). However, a close examination of this literature reveals a surprising gap: there...
Not All Rivals Look Alike: Estimating an Equilibrium Model of the Release Date Timing Game
... a very serious game of strategy is at work--a cross between chess and chicken--which studio distribution chiefs play year round, but with increasing intensity during the summer and holiday release period. (New York Times, December 6, 1999) Hubris....
On the Preferences of Principals and Agents
I. INTRODUCTION A basic intuition in economics is that trade is not possible without heterogeneity of preferences or assets and that markets are best equipped to allocate resources and abilities to tasks. This paper takes this intuition to task...
Outsourcing and Unionization: A Tale of Misallocated (Resistance) Resources
The largest employer in America is a temp agency now. So we have to figure out how to organize this segment, what the glue is.... Not in my lifetime. --A former organizing director of the American Federation of Labor--Congress of Industrial...
Pricing Anomalies in the Market for Diamonds: Evidence of Conformist Behavior
I. INTRODUCTION Diamonds have long intrigued economists. Adam Smith and the classical economists asked why diamonds, which have so little value in use, have such high value in exchange. It took another century before Jevons and the marginalists...
Technological Asymmetry among Foreign Investors and Mode of Entry
I. INTRODUCTION During the past several decades, there has been a significant change in the attitudes of many countries toward inflows of foreign direct investment (FDI). From being viewed as exploiters, foreign investors are now welcomed as a source...
The Behavior of Inexperienced Bidders in Internet Auctions
I. INTRODUCTION As has now been documented in many studies, the Internet auction market has quickly become a thriving marketplace. In the United States, the market is dominated by eBay. In the second quarter of 2007 alone, eBay users posted a total...
The Effect of Direct to Consumer Television Advertising on the Timing of Treatment
I. INTRODUCTION In August 1997, the Food and Drug Administration (FDA) relaxed the rules governing television advertising of prescription pharmaceutical products. Before that time, broadcast ads were permitted only to mention either the name of...