Issue 1

Volume 29 JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY
Spring 2020

Business dynamics statistics of High Tech industries

Nathan Goldschlag and Javier Miranda
In this paper we describe an extension to the Census Bureau's Business Dynamics Statistics that tracks job creation, job destruction, startups, and exits by firm and establishment characteristics, including sector, firm age, and firm size in the High Tech sector. We preview the resulting statistics, showing the structural shifts in the High Tech sector over the past 30 years, including the surge of entry and young firm activity in the 1990s that reversed abruptly in the early‐2000s.

Intermediated surge pricing

Sushil Bikhchandani
Although Uber and Lyft are known for their flexible “surge pricing,” they are surprisingly rigid in another way: each firm takes a constant percentage of passenger fare whether or not there is a surge. In this paper, I investigate the possible reasons for, and the impact of, this rigidity.

Can consumer complaints reduce product reliability? Should we worry?

Joaquín Coleff
We analyze a monopolist's pricing and product reliability decision in a model where consumers are entitled to product replacement if the product fails, but have heterogeneous costs of exercising this right. Our main result shows that, under some conditions, a decrease in consumers expected to claim cost leads to a decrease in product reliability but an increase in profit and welfare.

Savings that hurt: Production rationalization and its effect on prices

Mauricio Varela and Madhu Viswanathan
Production rationalization, the process of reallocating production across facilities so as to reduce total costs, results in firms equating marginal costs across markets. This results in marginal costs, and hence prices, being higher in some markets and lower in others than otherwise would be without production rationalization. This paper proposes a model of competition that elicits these effects and the resulting consequences on consumer and producer surplus.

Asymmetric‐information allocation to avoid coordination failure

Fumitoshi Moriya and Takuro Yamashita
In the context of team production, this paper studies the optimal (deterministic and stochastic) information allocation that implements desired effort levels as the unique Bayesian equilibrium. We show that under certain conditions, it is optimal to asymmetrically inform agents even though they may be ex ante symmetric.

On the corporate use of green bonds

Mark Bagnoli and Susan G. Watts
We show that in less competitive retail markets when retailers can “skim” more of the premium that end consumers pay for socially responsible products, green bonds provide additional funds to help cover the cost of a wholesaler's socially responsible activities.