A model of new-product diffusion is proposed in which a site-percolation dynamics represents socially-driven diffusion of knowledge about the product's characteristics in a population of potential buyers. A consumer buys the new product if her valuation of it is not below the price of the...

Many successful franchise chains directly own a positive fraction of stores --- a structure referred to as plural form. We propose that this ownership structure is chosen as a commitment not to expropriate franchisees. The theoretical model is based on an empirical analysis of contract and...

According to New Institutional Economics, two or more individuals will found an organization, if it leads to a benefit compared to market allocation. A natural consequence will then be internal rent seeking. We discuss the interrelation between profits, rent seeking and the foundation of...

Abstract: In this paper we experimentally investigate whether the so-called in-group/out-group bias leads to a favoring of own team members as candidates in promotion (by voting for them) relative to other teams and their members. In contrast to psychological approaches, mon- etary incentives...

This paper discusses the optimal firm size in the presence of influence activities, and the level of individual rent-seeking dependent on the economic situation of the firm. Since size has a discouraging effect on the level of individual rent-seeking but also a quantity effect as the number of...

This paper extends the standard principal-agent model with moral hazard to allow for agents having reference- dependent preferences according to Köszegi and Rabin (2006, 2007). The main finding is that loss aversion leads to fairly simple contracts. In particular, when shifting the focus from...

In practice, two types of tournaments can be distinguished - U-type and J-type tournaments. In U-type tournaments, workers receive prizes that have been fixed in advance. In J-type tournaments, the employer fixes an aggregate wage bill in advance, which is then shared among the workers according...

In some sports leagues, the sports association sells broadcasting rights centrally in order to create competitive balance. In other ones, the market is decentral. As a result, there is competitive imbalance. In this paper, the preferred kind of marketing of sports associations is analysed....

We study an industry in which an upstream monopolist supplies an essential input at a regulated price to several downstream firms. Legal unbundling means that a downstream firm owns the upstream firm but this upstream firm is legally independent and maximizes its own upstream profits. We allow...

In this paper, we combine the strategic delegation approach of Fershtman-Judd-Sklivas with contets. The results show that besides a symmetric equilibrium there also exist asymmetric equilibria in which one owner induces pure sales maximization to his manager so that all the other firms drop out...