Journal of Economics & Management Strategy最新文献

The growth of nonemployer businesses as a share of the working-age population has been little studied relative to the decline of employer business rate in the United States. We show that local labor markets specializing in routine task-intensive jobs have experienced a higher adoption of information technology as well as the growth of nonemployer businesses primarily through increasing self-employment in nonroutine manual task-intensive jobs that are less frequently outsourced to business service firms.

We study the incentive of an ad-funded social media platform to curb the presence of unsafe content that entails reputational risk to advertisers. We identify conditions for the platform not to moderate unsafe content and demonstrate how the optimal moderation policy depends on the risk the advertisers face. The platform is likely to undermoderate unsafe content relative to the socially desirable level when both advertisers and users have congruent preferences for unsafe content and to overmoderate unsafe content when advertisers have conflicting preferences for unsafe content. Finally, to mitigate negative externalities generated by unsafe content, we study the implications of a policy that mandates binding content moderation to online platforms and how the introduction of taxes on social media activity and social media platform competition can distort the platform's moderation strategies.

The government has invested more than $24.8 billion to incentivize the adoption of health information technology in hospitals; however, there is little evidence showing that these investments produced the expected efficiencies, such as cost savings and improved quality of care. We examine whether vendor heterogeneity can help explain this puzzle. Our results show that the effects of electronic medical record (EMR) adoption on hospital costs and quality vary substantially by vendor. Only certain EMR vendors lead to cost savings (ranging between 3.1% and 4.7%) or quality of care improvements (lowering rates of adverse drug events from 0.38 to 1.68 percentage points) for adopting hospitals, while the adoption of other EMR vendors leads to either cost increases, quality of care reductions, or no significant effects. Our results suggest that both quality improvement and cost savings may be improved by a more strategic choice of vendor. The variability in EMR effectiveness by vendor also implies that there was a hidden cost of the government's program to incentivize the adoption of EMRs in hospitals.

Environmental nongovernmental organizations (NGOs) are increasingly using strategies to encourage firms to eliminate product components (e.g., palm oil) that are harmful to the environment (e.g., rainforests) or to replace them with NGO-certified sustainable components. Under what conditions do NGOs' information and ecolabeling strategies succeed in eliminating certain harmful components when these components contribute to the intrinsic quality of a product? The paper addresses these questions using a model of two-dimensional vertical product differentiation in a market with consumers either informed or uninformed about the environmental quality of products and two firms that initially offer a product with the harmful component and a harmful component-free product. We show that the information campaign plays a crucial and effective role in improving environmental quality, although the optimal share of informed consumers for the NGO is large but not always 100%. Ecolabeling cannot replace the information campaign. It is only a complementary tool to an intensive information campaign. Used together, they can succeed in triggering the substitution of the certified sustainable component for the harmful one.

Using data from about 25 million hotel room postings in four countries, we document that rather than decreasing to zero as the likelihood of cancellation declines, the difference between the prices for refundable and nonrefundable reservations remains positive at roughly 10%–15% of the full price. A model where travelers have different willingness to pay and some of them overestimate the probability to cancel their trip explains these price-setting patterns more consistently than alternative interpretations. We denote these business strategies as naiveté-based price discrimination. Our data and theory, therefore, show that this form of apparent inertial behavior of companies regarding a major strategic variable can be an intentional managerial choice. We demonstrate, finally, that this profit-enhancing commitment to limited flexibility may also benefit customers in some cases, by expanding the reach of the market. Thus, strategies that rely on cognitive biases on the demand side may not necessarily exploit consumers.

We study the behavior of a firm that consistently maximizes a misspecified profit function as the misspecification error remains undetected in equilibrium. Our framework encompasses a price-taking firm and a cost-taking firm, which respectively take the unit price and the unit cost as given. At the stable equilibrium for the cost-taking firm, the price increases with the level of fixed costs, a phenomenon known as full-cost pricing. We show that the equilibrium price may be lower than the rational price and can be reached by a tatônnement process. We also describe a stochastic version of that process in a dynamic setting with random costs and Bayesian learning. Finally, we endogenize the cost curve. When technology duplication is possible, the cost-taking firm and the rational firm end up producing the same level of output.

In a series of decisions over the last decade, the Supreme Court of the United States altered the classes of inventions that are eligible for patent protection—a body of law called subject matter eligibility. One of the more contentious of these decisions, Alice Corp. versus CLS Bank International (Alice), questioned the patentability of a broad class of inventions involving abstract ideas, particularly in digital technologies. Exploiting a quasinatural experiment, we find that the Alice decision reduced favorable patent eligibility decisions by 31% and significantly and persistently increased legal uncertainty in patent examination by 26% for a broad set of technologies. Our analysis quantifies how legal decisions can limit patent protection and highlights the need for further research on how greater legal uncertainty affects upstream investments supporting invention and downstream innovations fueling growth.

This study examines vertical agreements that occur when suppliers experience learning-by-doing, which makes them more productive over time and poses a competitive threat to their rivals. Consequently, a dominant supplier arranges payments that reference the rival good. This study contributes to the existing literature by showing that the dominant supplier chooses specific contracts to reap optimal benefit from its rival's efficiency gains. These contracts restrict the rival, harm consumers, and reduce welfare when the rival is exceptionally efficient or expects significant improvements through learning-by-doing. Therefore, this study emphasizes the significance of foreseeable innovations and their implications in antitrust proceedings.

This paper examines one million land transactions and firm census data sets to determine the effect of market concentration on entry deterrence in China from 2006 to 2013. We find that a one standard deviation increase in the Herfindahl–Hirschman Index leads to a one standard deviation decrease in local government-designated industrial land sales to nonlocal firms and to a 2.9 standard deviation increase in land cost. Further evidence suggests that firms with high market power lobby their local governments to deter the entry of nonlocal firms.

We consider the public-good aspect of platform's data collection on users. Data have commercial benefits to the platform, personal benefits to the user, and public benefits to other users. We ask who should decide which data the platform commercializes. We find that the answer depends on the type of heterogeneity in the disutility of data commercialization. When heterogeneity is across users (data items) and the public benefit of data is high (low), it is welfare enhancing to let the platform (users) control the data. Furthermore, dynamic data accumulation strengthens our results.