This paper considers learning in an imperfectly competitive setting. By allowing an opponent a "head start, " unsuccessful unilateral experimentation may jeopardize future sales and...
We develop a model in which information about a firm’s past performance diffuses gradually among potential consumers. In our model, a firm’s ability to deliver high-quality products at any given...
With Network Externalities, David J. Salant, Glenn A. Woroch, Arthur Fishman, Jorge Padilla
Howshould a monopolist price a durable good or a new technology that is subject to network externalities? In particular, should the monopolist set a low"introductory price" to attract a...
Price Cycles and Booms: Dynamic Search Equilibrium.
Fershtman, Chaim, Fishman, Arthur
Search theory has been extensively and successfully applied to explain the persistence of price dispersion. This paper presents an explicitly dynamic search model that is able to account for cyclical...
The Size of Firms and R&D Investment.
We construct an industry-equilibrium model in which it is costly for consumers who have previously purchased from one firm to switch to competitors. This gives firms a certain degree of market power...
Planned Obsolescence as an Engine of Technological Progress.
Fishman, Arthur, Gandal, Neil, Shy, Oz
Critics of capitalism contend that many products are designed to have uneconomically short lives, with the intention of forcing consumers to repurchase too frequently. This phenomenon is commonly...
The Durability of Information, Market Efficiency and the Size of Firms.
The authors analyze a search-theoretic framework in which consumers buy the product repeatedly and firms' costs vary over time. They show the cross-sectional correlation between profits and firm...
The Division of Labor, Inequality and Growth.
We present a model that links the division of labor and economic growth with the division of wealth in society. When capital market imperfections restrict the access of poor households to capital,...
Experimentation and Learning with Network Effects
Abtract: This paper considers learning in an imperfectly competitive setting. By allowing an opponent a ``head start," unsuccessful unilateral experimentation may jeopardize future sales and profits....
Inflation and Efficiency in a Search Economy
Chaim Fershtman, Arthur Fishman, Avi Simhon
We present a model in which purely monetary inflation systematically affects efficiency, welfare, and relative prices. The model focuses on the microeconomics of trade in search markets under...
The durability of information, market efficiency, and the size of firms
Business enterprises ; Prices
Product Innovation by a Durable-Good Monpoly
We consider a durable-good monopolist that periodically introduces new models, each new model representing an improvement upon its predecessor. We show that if the monopolist is able neither to...
Asymmetric Price Competition with Price Inertia
In this article, I analyze price competition under price inertia. After setting prices, sellers are unable to change them for a period of predetermined length, but may delay price commitments...
Entry Deterrence in a Finitely-Lived Industry
The Ghemawat and Nalebuff (1985) exit model is extended to include an entry stage. Demand is high at the time of entry but is expected to eventually decline. It is shown that equilibrium entry...
Search with Learning and Price Adjustment Dynamics.
The author presents a model of consumer search with learning in which cost shocks have different short- and long-range effects on prices. In the short run, consumers confuse general cost shocks,...
Efficient Budget Balancing Cartel Equilibria with Imperfect Monitoring.
Demougin, Dominique, Fishman, Arthur
We modify the infinitely repeated Cournot game with imperfect monitoring of Green and Porter (1984) and Abreu, Pearce and Stacchetti (1986) to include heterogeneous products and the possibility of...
The Economics of Collective Brands
Fishman, Arthur, Finkelshtain, Israel, Simhon, Avi, Yacouel, Nira
We consider the consequences of a shared brand name such as geographical names used to identify high quality products, for the incentives of otherwise autonomous firms to invest in quality. We...
CAN INCOME EQUALITY INCREASE COMPETITIVENESS?
This paper explores the relationship between income distribution, prices, production efficiency and aggregate output in a decentralized search economy. We show that income distribution determines how...
This paper argues that financial intermediation can facilitate exchange of information between lenders which may lead to more efficient credit markets. The idea is that effective exchange of...