1,721,031 research outputs found
Process and Product Innovations: Complements or Substitutes?
No full textThis paper analyzes rms simultaneous choice in the intensity
of process and product innovations, in market with vertical prod-
uct di¤erentiation. Considering both monopoly and oligopoly
models, we show that di¤erent shocks on the demand and cost
side allow either a sort of complementarity or a sort of substi-
tutability between the two kinds of innovation. Namely, demand
shocks (increase) cause a complementary variation (increase) in
both innnovations and in both monopoly and oligopoly, while an
exogenous increase in production costs enhances process inno-
vation and worsen product one in monopoly and for a duopoly
leader, while for a duopoly follower it increses both innovations.
Morover, the low quality rm is more e¢ cient than the monop-
olist and the high quality one in process innovation. Conversely,
a high quality rm has a better performance in terms of product
innovation compared to a monopolist and low quality one
Reputation and Competition with Social Convention
No full textIn this note we develop a pure hidden action model of reputation and repeated Bertrand competition,
where firms are homogeneous, entry is free, and consumers infer future non-contractible
quality both from information about past quality and from current prices. We show that a positive
level of quality is sustained as an outcome of a stationary equilibrium, together with a
social convention about the minimum acceptable quality. If instead the social convention is not
relevant, more entry occurs at the cost of worse quality and lower consumer welfare.
Keywords: reputation, pure hidden action, Bertrand competition, social conventio
Quality of After-Sales Services in a Competitive Insurance Sector†
No full textThis paper tackles the issue of unverifiable quality of after-sales insurance services, such as a prompt reimbursement of damages. A dynamic model is introduced in order to allow reputation to emerge as a means of disciplining insurance firms to deliver high quality. The equilibrium of a repeated Bertrand game among the insurers is analysed and conditions are derived under which more concentration in the insurance industry can lead to greater equilibrium consumer welfare
Quality and Reputation: Is Competition Beneficial to Consumers
No full textIn this paper we develop a model of product quality and rms reputation. If quality is not
veri able and there is repeated interaction between rms and consumers, we show that reputation
emerges as a means of disciplining the former to deliver high quality. In order to that, we also prove
that rms can extract some rent in producing high quality, thus providing a solution to Stiglitz
(1989) puzzle, alternative and complementary to Hörner s (2002) one. The result is genereated
in equilibria which sustains minimum quality standard as the (equilibrium) outcome of a social
norm. Moreover, we demonstrate that more concentrated industry structures deliver higher quality
and social welfare. Hence, when quality is an issue, competition is not necessarily bene cial for
consumers in our setup. We derive our results in the speci c context of after-sales service quality
provided by insurance companies because we document, through an example, that providing high
quality is particularly di¢ cult in such a market. Yet, we argue that our analysis is of general
applicability
Reputation and competition in a hidden action model.
Get PDFThe economics models of reputation and quality in markets can be classified in three categories. (i) Pure hidden action, where only one type of seller is present who can provide goods of different quality. (ii) Pure hidden information, where sellers of different types have no control over product quality. (iii) Mixed frameworks, which include both hidden action and hidden information. In this paper we develop a pure hidden action model of reputation and Bertrand competition, where consumers and firms interact repeatedly in a market with free entry. The price of the good produced by the firms is contractible, whilst the quality is noncontractible, hence it is promised by the firms when a contract is signed. Consumers infer future quality from all available information, i.e., both from what they know about past quality and from current prices. According to early contributions, competition should make reputation unable to induce the production of high-quality goods. We provide a simple solution to this problem by showing that high quality levels are sustained as an outcome of a stationary symmetric equilibrium
Search, Hiring Strategies, and Labor Market Intermediaries
No full textLabor market intermediaries play an important role in turnover in many labor markets. This paper analyzes one class of such inter- mediaries, namely, search firms. We first model the hiring decision of the firm in both succession and replacement planning. We show that employers will, in equilibrium, use search firms to find new hires even where the search firms have no technological advantage in search. This can be interpreted as being due to the search firms' ability to diversify away sampling risk
Preferenze sociali e cooperazione, in «Dizionario di dottrina sociale della Chiesa. Le cose nuove del XXI secolo»
No full textLe preferenze sociali studiano se e come il benessere materiale degli altri influenza il benessere di un individuo. Le preferenze sociali sono nate in contrapposizione all’idea classica in economia secondo la quale gli agenti fossero egoisti, ovvero interessati esclusivamente al proprio benessere materiale (homo oeconomicus). Le analisi empiriche mostrano che i soggetti egoisti sono una minoranza, ma lo sono anche i soggetti incondizionatamente altruisti, che seguono i dettami dell’amore cristiano. La maggioranza dei soggetti è altruista verso altri che ritengono simili o che esprimono atteggiamenti altruisti di reciprocità. Le analisi delle preferenze sociali aprono a una visione dell’uomo come “un essere costitutivamente sociale” e disponibile alla reciprocità con gli altri. Quindi contribuiscono ad aprire un dialogo più fecondo e più profondo della scienza economica con la dottrina sociale della Chiesa
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