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Communicating clean technology: Green premium, competition, and ecolabels Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-03-07 Aditi Sengupta
In markets where differences in the environmental performance of competing firms arise due to differences in technology that cannot be altered in the short run and firms have private information about their own current technology, I show that market competition creates a strategic disincentive for adopting ecolabels (even if the cost of adoption is negligible) to directly and credibly communicate this
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Make or buy your artificial intelligence? Complementarities in technology sourcing Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-03-06 Charles Hoffreumon, Chris Forman, Nicolas van Zeebroeck
We investigate firm decisions to adopt artificial intelligence (AI) technology and how adoption is sourced: by purchasing commercial readymade software, by developing or customizing solutions in‐house, or both. Using a cross‐sectional data set of 3143 firms from across Europe, we examine the extent to which sourcing strategies exhibit complementarity or substitution. We find that adoption of AI using
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Organization of production and income inequality Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-02-28 Luis Medrano‐Adán, Vicente Salas‐Fumás, Javier Sanchez‐Asin
This paper contributes to the literature that postulates a relationship between income inequality and the relative importance of “market” and “organization” in the direction of resources. The paper emphasizes that both are endogenous; therefore, the empirical associations observed in the empirical data between inequality measures and production organization variables cannot be interpreted as indicative
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The effect of competition on the demand for skilled labor: Matching with externalities in the NBA Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-02-28 Joseph Kuehn
I study how heterogeneity in competition can affect the demand for skilled labor in a way that generates a dispersion in productivity across otherwise similar firms. This is explored in the setting of professional basketball where heterogeneity in competition is easily measured. I develop and estimate a matching model with externalities, where the value of a match between a firm and worker depends
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Insourcing versus outsourcing in a vertical structure Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-02-27 Dongsoo Shin, Roland Strausz
We study an agency model with vertical hierarchy—the principal, the prime‐agent and the subagent. The principal faces a project that needs both agents' services. Due to costly communication, the principal receives a report only from the prime‐agent, who receives a report from the subagent. The principal can directly incentivize each agent by setting individual transfers (insourcing), or sets only one
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Effort complementarity and role assignments in group contests Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-02-21 Katsuya Kobayashi
This study characterizes role assignments in maximizing a group's winning probability under the influence of the complementarity of group members' efforts in a group contest, in contrast to prize and multiple resource allocations. We use a constant elasticity of substitution effort aggregator function to parameterize the complementarity. While the prize and resource allocation rules depend on the complementarity
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The business revolution: Economy‐wide impacts of artificial intelligence and digital platforms Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-02-20 Hanna Halaburda, Jeffrey Prince, D. Daniel Sokol, Feng Zhu
In this essay, we identify several themes of the digital business transformation, with a particular focus on the economy‐wide impacts of artificial intelligence and digital platforms. In doing so, we highlight specific industries, beyond just the high‐profile “Big Tech” firms, where the digital business revolution is having, or promises to have, significant impact. The papers in this special issue
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Product innovation and export strategy Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-02-15 Kevin Randy Chemo Dzukou, Sabine Duvaleix, Karine Latouche
This paper analyses the relationship between innovation and export performance. More specifically, we highlight the effect of the introduction of new products on the quality and prices charged by firms in international markets. We develop a model to explain the mechanism underlying the relationship between innovation and product quality. Using a unique database of new product launches combined with
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Taking firms' margin targets seriously in a model of competition in supply functions Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-02-08 Denis Claude, Mabel Tidball
This article deals with the integration of industry-level markup targets into oligopoly theory. It proposes a behavioral competition model in which firms use the average cost-plus price to determine their supplies. Specifically, firms are assumed to increase (resp., decrease) their supplies as the market price rises over (resp., falls below) this reference price. The equilibrium market outcome lies
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Behavior-based pricing and signaling of product quality Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-02-06 Jianpei Li, Wanzhu Zhang
In a two-period model with repeat purchase, we compare the profit and social welfare effects of behavior-based pricing (BBP) and uniform pricing in a monopoly under quality uncertainty. We offer the novel insight that BBP increases the price elasticity of imitation demand and lowers the signaling cost relative to uniform pricing, and becomes a potentially profitable strategy even when the monopolist
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AI adoption in America: Who, what, and where Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-01-24 Kristina McElheran, J. Frank Li, Erik Brynjolfsson, Zachary Kroff, Emin Dinlersoz, Lucia Foster, Nikolas Zolas
We study the early adoption and diffusion of five artificial intelligence (AI)-related technologies (automated-guided vehicles, machine learning, machine vision, natural language processing, and voice recognition) as documented in the 2018 Annual Business Survey of 850,000 firms across the United States. We find that fewer than 6% of firms used any of the AI-related technologies we measure, though
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Supply contracts under partial forward ownership Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-01-14 Matthias Hunold, Frank Schlütter
With forward ownership, an upstream supplier internalizes the effect of its supply contracts on the downstream firms, which is so far understood to decrease prices. We show that, instead, downstream prices generally increase if firms use two-part tariffs. The price-increasing effect of forward ownership occurs with both observable and secret two-part tariffs, albeit for different economic reasons.
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Retailer access pricing and supplier relations in the agency model Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-01-10 Ming Gao
In vertical relations where a retailer enters into agency contracts with multiple heterogenous suppliers of unrelated products, I show the retailer can turn the products into complements or substitutes by charging or subsidizing consumers for access. The optimal access price depends critically on the revenue share that the retailer takes from each supplier, and the retailer's cross-price elasticity
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Do competitive bonuses ruin cooperation in heterogeneous teams? Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2024-01-11 E. Glenn Dutcher, Regine Oexl, Dmitry Ryvkin, Timothy C. Salmon
A debate among practicing managers is whether to use cooperative or competitive incentives for team production. While competitive incentives may drive individual effort higher, they may also lead to less help and more sabotage, with unclear consequences overall, especially when team members' abilities differ. Using a lab experiment, we examine how increasing competitive incentives affects performance
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Quality discrimination in healthcare markets Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-12-20 Rosa-Branca Esteves, Ziad Ghandour, Odd Rune Straume
Recent advances in healthcare information technologies allow healthcare providers to more accurately track patient characteristics and predict the future treatment costs of previously treated patients, which increases the scope for providers to quality discriminate across different patient types. We theoretically analyze the potential implications of such quality discrimination in a duopoly setting
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The rise of empirical online platform research in the new millennium Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-12-18 Hsing Kenneth Cheng, D. Daniel Sokol, Xinyu Zang
Online platforms have emerged as a dominant business model in numerous industries in the new millennium. In light of the substantial and burgeoning body of empirical platform research, this article synthesizes extant studies and identifies the evolution of underlying research methodologies and topics. Building upon a database of 860 empirical online platform papers in premier journals during the first
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Free riding, democracy, and sacrifice in the workplace: Evidence from a real-effort experiment Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-12-11 Kenju Kamei, Katy Tabero
Teams are increasingly popular decision-making and work units in firms. This paper uses a novel real-effort experiment to show that (a) some teams in the workplace reduce their members' private benefits to achieve a group optimum in a social dilemma and (b) such endogenous choices by themselves enhance their work productivity (per-work-time production)—a phenomenon called the “dividend of democracy
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Confidence management in contests Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-12-06 Shanglyu Deng, Hanming Fang, Qiang Fu, Zenan Wu
An incumbent employee competes against a new hire for bonuses or promotions. The incumbent's perception of the new hire's ability distribution is biased. This bias can result in overconfidence or underconfidence. We show that debiasing may be counterproductive in incentivizing efforts. We then explore whether a firm that values employees’ efforts should disclose an informative signal about the new
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Under the shadow of the future: Gender-specific reactions to (un)certain future interactions Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-12-03 Janina Kleinknecht, Clara Ulmer
Expectations are a key element of strategic environments. As it has already been shown that men's performance in current competitions is affected by the expected future opponents' strength, we investigate whether women are overshadowed by future competitors as well. We use data from professional tennis, replicate the results for men and compare it with women's behavior. Extending previous research
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Sales-based compensation and collusion with heterogeneous firms Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-11-20 Jeongwoo Lee, Douglas C. Turner
Pricing and output decisions are often delegated to managers compensated on the basis of sales. Prior literature has shown that when firms are homogeneous, the delegation of pricing or output decisions to managers, compensated on the basis of sales, does not facilitate collusion. We show that when firms are heterogeneous, either in marginal cost or product quality, sales-based compensation can facilitate
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Championing and shaming in a credence good market: Which one to use? Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-11-17 Alexandre Volle, Patrick González
We analyze the performance of the championing and shaming inquiries by a Nongovernmental Organization in a signaling game played by a monopoly that sells a credence good to an uninformed consumer. Championing (shaming) means certifying (uncovering) a firm that sells a high (low) quality product. An inquiry alters the whole information structure of the signaling game. It provides redundant hard information
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Branding vertical product line extensions Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-11-14 Thomas Jungbauer, Christian Schmid
Firms that sell vertically differentiated products infrequently roll out multiple products at the same time. In fact, it is often a firm already selling a well-established product that decides to expand up- or downwards when such an opportunity arises. A critical decision in this scenario is whether to introduce the new product under an existing brand. In this paper, we develop a game-theoretic model
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Two-sided productivity heterogeneity, firm boundaries, and assortative matching Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-11-14 Kaniṣka Dam, Daniel Ripperger-Suhler, Konstantinos Serfes
We consider a market where each firm is created by the combination of two complementary assets that are heterogeneous in their productivity. After assets match endogenously, their owners choose between two ownership structures: centralized organization (integration) and arm's length organization (nonintegration). Our main focus is on the interplay between productivity heterogeneity and firm boundary
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Postsearch uncertainty, product heterogeneity, and price divergence Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-11-14 Yijuan Chen, Xiangting Hu, Sanxi Li
We develop a consumer search model in which consumers may remain uncertain about product quality even after inspecting the product. We first consider the postsearch uncertainty regarding vertical quality, and characterize the separating equilibrium in which firms with different quality levels charge different prices. If quality information is not sufficiently transparent after the search, then prices
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Product variety and design in the age of peer-to-peer sharing Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-11-06 Yusuke Zennyo
The rise of peer-to-peer (P2P) sharing, exemplified recently by increased car-sharing and clothing-sharing, has altered our consumption style. One can consume goods without owning them. In fact, the ownership of goods can be monetized through P2P rental markets. These changes are regarded as influencing various strategies of manufacturers of goods being shared. Specifically, this paper examines aspects
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Mergers and organizational disruption: Evidence from the US airline industry Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-10-04 Julia González, Jorge Lemus, Guillermo Marshall
Merger-specific efficiencies alleviate anticompetitive concerns of horizontal mergers. However, organizational challenges inherent in mergers pose a threat to achieving these efficiencies and could negatively impact the merged firm's productivity and market outcomes. We separately measure the organizational and strategic effects of mergers on quality provision using administrative data from the US
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Less is more: A theory of minimalist luxury Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-09-24 Z. Jessie Liu, Pinar Yildirim, Z. John Zhang
We show theoretically that when high-quality, low-price counterfeits exist and are visibly indistinguishable from authentic products, the status-seeking wealthy may embrace a “less is more” purchasing strategy or what we refer to as the minimalist luxury strategy, to signal their status. These are the wealthy who have a high disutility of shopping for counterfeits. Specifically, in our model, only
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Strategic automation and decision-making authority Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-09-18 Mustafa Dogan, Alexandre Jacquillat, Pinar Yildirim
This paper studies how automation impacts the structure of decision-making in organizations. We develop a theoretical model of a firm, where a principal makes a decision about how much to prioritize the new product development division when the division is led by a manager who holds private information specific to this division and has misaligned preferences with the principal. The principal chooses
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Partial ownership, control, and investment in vertical relationships Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-09-06 Nadav Levy
This paper examines whether partial ownership of a trading partner can alleviate hold-up problems and promote relationship-specific investments. Unlike a silent financial interest, which does not give the owner control over the partner and promotes both parties' investments, partial control over the partner could reduce the partner's investment and lead the owner to overinvest, thereby decreasing the
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Augmenting physicians with artificial intelligence to transform healthcare: Challenges and opportunities Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-09-01 Ritu Agarwal, Michelle Dugas, Guodong (Gordon) Gao
We reflect on the progress and prospects of artificial intelligence (AI)-powered transformation in healthcare from the perspective of front-line clinical professionals responsible for care delivery. While there is considerable optimism about the potential of AI, critical gaps in understanding remain that represent fruitful opportunities for economics and management scholars. We outline the ways in
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Monopoly pricing with dual-capacity constraints Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-09-01 Robert Somogyi
This paper studies the price-setting behavior of a monopoly facing two capacity constraints: one on the number of its consumers, and the other on the amount of products it can sell. The characterization of the firm's optimal pricing and optimal customer mix as a function of its two capacities reveals a rich structure. In contrast to the results under one-dimensional capacity constraints with constant
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Does sunk-cost affect prices? Evidence from the US airline industry Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-06-29 Long Shi, Qihong Liu, Myongjin Kim
In contrast to the extensive literature on behavior bias by individuals, studies on behavior bias by firms have been relatively scarce. We explore the possibility of the latter in the context of US airlines, where fuel hedging leads to lump sum gains or losses which may impact airlines' pricing decisions. Our results show that the (sunk) hedging gains or losses affect airlines' ticket prices. In particular
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Bundling of authority and accountability in organizations Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-06-27 Susheng Wang
Decision-making authority is often bundled with accountability. Decision makers are usually made accountable for failure. We propose an incomplete-contract approach to investigate four accountability systems: personal accountability, no accountability, collective accountability, and reverse accountability. We consider an organization defined by three assignments: income, authority, and accountability
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Price promotions as a threat to brands Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-06-25 Roman Inderst, Martin Obradovits
Manufacturers frequently resist heavy discounting of their products by retailers. Since low prices should increase demand and manufacturers could simply refuse to fund deep price promotions, such resistance is puzzling at first sight. We develop a model in which price promotions cause shoppers to evaluate the relative importance of quality and price against a market-wide reference point. With deep
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The challenges of using ranks to estimate sales Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-06-23 Stan J. Liebowitz, Alejandro Zentner
Researchers have frequently used data on product ranks to estimate nonpublic sales quantities, believing that there is a power-law-induced linear relationship between logged sales ranks and logged sales. Using essentially complete data on book sales, the most commonly used product in this literature, we find that the (double-logged) relationship between sales ranks and quantity sold is not linear,
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Tying in two-sided markets with heterogeneous advertising revenues and negative pricing Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-06-20 Jong-Hee Hahn, Sang-Hyun Kim, So Hye Yoon
We offer a theory of anticompetitive tying in two-sided markets when below-cost or negative pricing is possible. With the coexistence of two consumer groups (one regarding tying and tied goods as complementary and the other as independent), a tying-good monopolist may face difficulties in extracting rent under separate sales and wish to use tying to directly capture the large advertising revenue created
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Consumers' preference for downsizing over package price increases Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-06-15 In Kyung Kim
In this paper, I study how and why consumers react differently to package downsizing and package price increases that result in the same degree of unit price increases. Utilizing differential responses of South Korean milk manufacturers to the production cost rise in 2018, I first show that consumers strongly prefer downsizing to package price increases, and this tendency does not diminish over time
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Sequential mergers under incomplete information Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-06-14 Jiajia Cong, Wen Zhou
We study sequential mergers under incomplete information where the follower is ignorant about the leader's merger synergy. When the follower's own synergy is sufficiently large, incomplete information induces both firms to merge more. These additional mergers benefit both firms and total welfare but hurt consumers. If the follower's synergy is very small, the leader is unable to take any strategic
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M&A and technological expansion Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-06-13 Ginger Zhe Jin, Mario Leccese, Liad Wagman
We examine how public firms listed in North American stock exchanges acquire technology companies during 2010–2020. Combining data from Standard and Poor's (S&P), Refinitiv, Compustat, and Center for Research in Security Prices, and utilizing a unique S&P taxonomy that classifies tech mergers and acquisitions (M&As) by tech categories and business verticals, we show that 13.1% of public firms engage
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Upstream conduct and price authority with competing organizations Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-05-26 Enrique Andreu, Damien Neven, Salvatore Piccolo, Roberto Venturini
We characterize the degree of price authority that competing upstream principals award their downstream agents in a setting where these agents own private information about demand and incur nonverifiable distribution costs. Principals cannot internalize these costs through monetary incentives and design “permission sets” from which agents choose prices. The objective is to understand the forces shaping
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Trade spends and profitability of promotions Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-05-16 Maxim Sinitsyn
This paper examines the prevalent mechanism of financing advertising and temporary price reductions through trade spend budgets. A manufacturer and a retailer interact for a number of periods with a plan to hold a sale in the last period. During the nonpromotional periods, the retailer accumulates the funds in this budget in proportion to the size of its order from the manufacturer. In the sale period
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What innovation paths for AI to become a GPT? Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-04-27 Timothy Bresnahan
Early commercial applications of artificial intelligence technologies (AITs) were narrow but extremely profitable. Comparable uses of those technologies throughout the economy would lead to a growth boom. Firms which emulated the early applications successfully would make tremendous strategic gains. This is a situation familiar from earlier rounds of information and communication technology. However
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Social preferences and sales performance Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-04-27 Andrea Essl, Frauke von Bieberstein, Michael Kosfeld, Markus Kröll
We use an incentivized experimental game to uncover heterogeneity in social preferences among salespeople in a large Austrian retail chain. Our results show that the majority of agents take the welfare of others into account but a significant fraction reveal selfish behavior. Matching individual behavior in the game with firm data on sales performance shows that agents with social preferences achieve
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Digital highways and firm turnover Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-04-24 Carlo Cambini, Lorien Sabatino
We study the impact of ultra-broadband (UBB) internet connections on firm entry and exit dynamics. These connections are based on optical fiber cables that link telecommunication operators to final users, allowing a significantly higher performance compared with traditional copper-line networks. We leverage on a unique comprehensive dataset collecting municipality-level information on broadband diffusion
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Artificial intelligence adoption and system-wide change Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-04-20 Ajay Agrawal, Joshua S. Gans, Avi Goldfarb
Analyses of artificial intelligence (AI) adoption focus on its adoption at the individual task level. What has received significantly less attention is how AI adoption is shaped by the fact that organizations are composed of many interacting tasks. AI adoption may, therefore, require system-wide change, which is both a constraint and an opportunity. We provide the first formal analysis where multiple
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The optimality of public–private partnerships under financial and fiscal constraints Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-04-18 Marco Buso, Luciano Greco
The government may delegate two sequential tasks (e.g., building and operating an infrastructure) to the same or different agents (i.e., partnership vs. sequential contracts). Agents are risk-neutral but face financial constraints, whereas the government's contractual capacity may be limited by the renegotiation-proofness and fiscal constraints. By relying on history-dependent incentives, the partnership
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The impact of artificial intelligence design on pricing Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-04-13 John Asker, Chaim Fershtman, Ariel Pakes
The behavior of artificial intelligence (AI) algorithms is shaped by how they learn about their environment. We compare the prices generated by AIs that use different learning protocols when there is market interaction. Asynchronous learning occurs when the AI only learns about the return from the action it took. Synchronous learning occurs when the AI conducts counterfactuals to learn about the returns
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Spatial competition with demand uncertainty: A laboratory experiment Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-04-06 Aurélie Bonein, Stéphane Turolla
Motivated by recent research on product differentiation, we conduct laboratory experiments to study how demand uncertainty influences firms' incentives to differentiate. We ground our experiment on a discrete version of the standard location-then-price game introduced by Hotelling (1929), and we consider different levels of demand uncertainty. We first derive the game equilibrium assuming risk-neutral
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How firms compete when they set identical prices: Nonprice strategies in the Indian biscuit industry Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-03-29 Gianluca Antonecchia, Ajay Bhaskarabhatla
How do firms compete when all firms in an industry set identical prices? Using Nielsen data on India's biscuit manufacturers, we document productivity-based competition on nonprice strategies under industry-wide uniform pricing. Products with one standard deviation higher quantity-based productivity contain, on average, 13% more quantity per pack for the same price. Productivity also positively correlates
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Using managers' expectations for ex-ante policy evaluation: Evidence from the COVID-19 crisis Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-03-29 Kohei Kawaguchi, Naomi Kodama, Hiroshi Kumanomido, Mari Tanaka
Evaluation of the impacts of government policies during an economic crisis is often delayed until the outcomes are realized. Policies can be better guided if they can be evaluated amid a crisis, before the realization of outcomes. This study examines whether survey data on the expectations of small business managers can help evaluate two high-stake subsidies for firms amid the COVID-19 crisis in Japan
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Platforms and the transformation of the content industries Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-03-21 Luis Aguiar, Imke Reimers, Joel Waldfogel
This paper discusses how digitization and the associated emergence of distribution platforms have affected product discovery, as well as new opportunities, in the content industries. First, we describe the traditional ways in which content creators reached consumers, as well as how platforms have transformed the product discovery process. Second, we present the promise and challenges of the information
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Inferno: A guide to field experiments in online display advertising Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-03-23 Garrett A. Johnson
Online display advertising is a hostile medium for field experiments. Display-ad effects are tiny and necessitate large-scale experiments. The experimenter has limited control because ad exposure is jointly determined by advertisers, users, algorithms, and market competition. As such, online display ads provide useful lessons for experimenters at the frontier of digital research more generally. Display-ad
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Licensing standard-essential patents with costly enforcement Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-03-10 Marc Bourreau, Rafael C. de M. Ferraz, Yann Ménière
We study the interaction between the holder of a standard-essential patent (SEP) and two downstream firms using the patented technology to design standard-compliant products. The SEP holder approaches the downstream firms simultaneously in the shadow of patent litigation and is subject to fair, reasonable, and non-discriminatory licensing requirements. We show that the patent holder faces a litigation
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Worker autonomy and performance: Evidence from a real-effort experiment Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-01-05 Veronica Rattini
Worker flexibility in effort allocation is a crucial factor for productivity and optimal job design. This paper runs a real-effort experiment that manipulates both the degree and type of autonomy individuals have in scheduling their effort, and it examines the causal effects of these manipulations on final performance. The main findings come from comparing subjects with different levels of cognitive
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Fixing feedback revision rules in online markets Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2023-01-03 Gary Bolton, Kevin Breuer, Ben Greiner, Axel Ockenfels
Feedback withdrawal mechanisms in online markets aim to facilitate the resolution of conflicts during transactions. Yet, frequently used online feedback withdrawal rules are flawed and may backfire by inviting strategic transaction and feedback behavior. Our laboratory experiment shows how a small change in the design of feedback withdrawal rules, allowing unilateral rather than mutual withdrawal,
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Leadership and cooperation in growing teams Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2022-12-25 Gerald Eisenkopf, Torben Kölpin
We study how the growth of teams affects leadership effectiveness and intragroup cooperation. We put experimental participants in two teams. In each team, the members voluntarily contribute to a club good. In one of the two teams, the members observe the contribution of a randomly chosen leader before they decide themselves. Two treatments allow for migration between the teams. In one of them, participants
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A theory of socially inefficient patent holdout Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2022-12-23 Gerard Llobet, Jorge Padilla
This paper proposes a framework to analyze holdout in patent licensing negotiations. We show that when the validity of a patent is probabilistic, a potential downstream user has incentives to shun to pay the price offered by a patent holder to license the technology and risk being brought to court. These incentives are exacerbated when jurisdictions are local, and the downstream producer can approach
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Noncompete agreements, training, and wage competition Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2022-12-22 Oz Shy, Rune Stenbacka
We study the effects of noncompete agreements in an environment where firms invest in training junior workers. After obtaining employer-provided training, trained workers can choose whether to remain loyal to their initial employer or switch to the competing employer. We evaluate the effects of noncompete agreements on wages, employment, investment in training, production, profits, and total welfare
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Teaching an old dog a new trick: Reserve price and unverifiable quality in repeated procurement Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2022-12-22 Gian Luigi Albano, Berardino Cesi, Alberto Iozzi
This paper shows that, in a repeated competitive procurement, a buyer can use the reserve price in a low-price auction as a “public”—hence nondiscriminatory—incentive device to elicit unverifiable quality. We study a model with many firms and one buyer, who is imperfectly informed on the firms' costs. When firms are ex ante identical, the provision of quality is sustained by a sufficiently high reserve
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Random encounters and information diffusion about product quality Journal of Economics & Management Strategy (IF 2.245) Pub Date : 2022-10-26 Jean J. Gabszewicz, Marco A. Marini, Skerdilajda Zanaj
This paper explores how social interactions among consumers shape markets. In a two-country model, consumers meet and exchange information about the quality of the goods. As information spreads, demand evolves, affecting the prices and quantities manufactured by profit-maximizing firms. We show that market prices with informational frictions reach the duopoly price with full information at the limit