Journal of Industrial Economics最新文献

This article studies how firing costs affect the productivity of knowledge workers. We develop a holdup model in which workers are essential to knowledge transfer between firms and show that if the worker's knowledge stock is sufficiently transferable to competing firms, an increase in firing costs inhibits the firm's ability to hold up the worker and thereby leads to higher effort. We consider the passage of the wrongful discharge laws in the US as an exogenous increase in firing costs and test our theory using data on patents filed at the United States Patent and Trademark Office (USPTO).

We consider a model of internal competition, where projects developed by agents with different preferences compete for resources in an organization. Allowing a manager—who has moderate preferences—to control the allocation of resources has benefits when preferences are not too diverse. In particular, the manager acts as a mediator, forcing agents to compromise when competing projects succeed, thus providing better insurance to agents and increasing their effort. Our framework provides a theoretical foundation for two influential views of a manager—as the “visible hand” that allocates resources, and as a “power broker” who resolves conflict in an organization.

A start-up engages in an investment portfolio problem by choosing how much to invest in a “non-rival” project and a “rival” project that threatens an incumbent. Anticipating its acquisition, the start-up distorts its investment portfolio in order to raise acquisition rents. This may improve or worsen the direction of innovation and consumer surplus. The bigger the difference in social surplus appropriability across the two projects, the more likely it is that the direction of innovation improves and consumers benefit from an acquisition. These results also hold if the acquirer takes over the research facilities of the start-up.

In a model of vertical competition two firms draw costly public signals that are informative about the quality of their products and then competitively set prices. When each firm generates information independently from the other, there will be overinvestment (underinvestment) in information generation if the market share of the quality follower in the subsequent market equilibrium is high (low). Moreover, information generation by one firm has a positive externality on the other firm. Hence, coordination (e.g., via industry associations) increases information generation. When product qualities are endogenous, information generation may prevent quality degradation and thus have an additional social benefit.

Exploiting the award process, we implement a regression discontinuity design to estimate the effect of winning France's main literary prize, the Goncourt. It increases sales, especially for books that sold fewer copies before the announcement, the number of reviews on Amazon, and the probability of them being negative. The effect is partly driven by an increase in word of mouth. Those findings are consistent with a model where the prize provides information on the existence of a book and acts as a quality signal and a coordination device but prompts consumers to read books that are far from their tastes.

This article presents new quantitative evidence of the sources of efficiency benefits from deregulation. We estimate the heterogeneous effects of plant divestitures on fuel procurement costs during the restructuring of the U.S. electricity industry. Guided by economic theory, we focus on three mechanisms and find that restructuring reduced fuel procurement costs for firms that (i) were not subject to earlier incentive-regulation programs, (ii) had relatively strong bargaining power as coal purchasers after restructuring, and (iii) were locked in with disadvantaged coal contracts prior to restructuring.

This article studies a seller's compound search for bidders by a deadline. We show that the optimal search outcomes can be implemented by a sequence of second-price auctions, characterized by declining reserve prices and increasing search intensities (sample sizes) over time. The monotonicity results are robust in both cases of short-lived and long-lived bidders. Furthermore, a seller with short-lived bidders sets lower reserve prices and searches more intensively than one with long-lived bidders. We also show that the inefficiency of an optimal search auction can stem from its inefficient search rule.

Consumer multi-homing is critical for competition policy regarding digital platforms. To assess the role of multi-homing, we embed endogenous homing into a model of oligopolistic competition between two-sided platforms and apply it to mergers and free entry. We find that the required merger-specific cost reduction is larger if consumers benefit more from multi-homing and that the equilibrium level of platform entry can be insufficient in the presence of consumer multi-homing. These results contrast the belief that multi-homing mitigates the need for stricter policy. We also show that reductions to sellers' benefit from multi-homing reduces entry (is an effective entry barrier).

A monopolistic manufacturer produces a branded good that is sold to final consumers by a monopolistic retailer who also sells a private label. The costs of the private label are unobserved by the manufacturer, which affects the terms of the contract offered by the manufacturer to the retailer. Given the revelation principle, the manufacturer distorts the quantity of the branded product downwards to learn those costs. The manufacturer can further reduce the retailer's information rent by distorting the quantity of the private label upwards—but this quantity is typically beyond its control. The optimum can nonetheless be achieved when combining a quantity discount with an end-of-year repayment.

This article provides a tractable model of inter-temporal price-discrimination by heterogeneous firms, imperative for our understanding of advance purchase markets in the wake of entry. The pricing schedule of an industry leader, whose product is more likely to match consumers' preferences, differs systematically from a newcomer's pricing. By diverting competition to a stage where consumers face uncertainty about their preferences, advance selling reduces prices while increasing the newcomer's market share and profitability relative to the industry leader. Policies curtailing firms' ability to sell in advance, although potentially beneficial for welfare, may consolidate an industry leader's position and reduce consumers' surplus.