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SSRN Research Paper Series
The Social Science Research Network’s Research Paper Series includes working papers produced by Stanford GSB and the Rock Center.
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Involuntary Unemployment and Imperfect Competition: A Game Theoretic Macro Model
This paper considers a game-theoretic, non-Walrasian, general equilibrium model of price determination, production, and exchange. In this game, firms first select prices and wages, consumers/workers then make input supply and output demand offers…
Optimal Auditing, Insurance, and Redistribution
The objective of this paper is to analyse optimal tax and audit strategies for a principal seeking to redistribute income among a population of taxpayers when the principal can observe the income of an individual at a cost. We show that in very…
Process Constraints on Strategic Capability Transfer During Acquisition Integration
This paper reports the results of an in-depth study of the acquisition integration process in seven acquisitions representing twelve firms. A grounded theory of acquisition integration is elaborated. Three constraints in the integration process…
Strategic Capability Transfer in Acquisition Integration
This paper presents a grounded theory of the acquisition integration process. The theory proposes that the central element in successful acquisition integration is the transfer of strategic capabilities between firms. A series of interactions…
Asymmetric Information and Labor Contracts: A Survey
This paper surveys models of optimal labor contracts between risk averse workers and privately informed firms. We analyze the inefficiencies resulting from the conflict between the provision of incentives for the firm and risk sharing…
Bias in Small Sample Tests of Stock Price Rationality
This paper demonstrates a severe small sample bias in the use of sample variances to test stock price variance bounds, under the maintained assumption that prices and dividends follow stationary and ergodic stochastic processes. This bias is due…
Capacity Utilization in the Chemical Processing Industries: Theoretical Models and Empirical Tests
Alternative models of optimal capacity expansion are used to develop a series of hypotheses regarding the behavior of capacity utilization. These hypotheses are then tested at the industry level on a large data sample covering 40 chemical…
Common Knowledge with Probability 1
Two people, 1 and 2, are said to have common knowledge of an event if both know it, 1 knows that 2 knows it, 2 knows that 1 knows it, 1 knows that 2 knows that 1 knows it, and so on. We provide a Bayesian definition of common knowledge, that is,…
Excess Capacity, Entry, and Market Structure in the Chemical Processing Industries
Recent advances in oligopoly theory suggest a number of reasons why excess capacity may be related to entry and market structure. This paper used comprehensive data on 40 chemical products to test a series of hypotheses on the determinants of…
Hierarchies of Beliefs and Common Knowledge
A type of an individual is an infinite hierarchy of beliefs—over some state space S, over other individuals’ beliefs over S, and so on. We show that a coherent type determines a belief over S and other individuals’ types, and that common…
Market Growth, Economies of Scale, and Capacity Expansion in the Chemical Processing Industries
What factors determine the size of new industrial plants? This study uses data on 23 chemical products to test alternative models of capacity expansion, including: (1) the Manne model, which yields a constant cycle time between plant construction…
Mutual Fund Performance Evaluation: A Comparison of Benchmarks and Benchmark Comparisons
Abstract not available.
Patents, Learning by Doing, and Market Structure in the Chemical Processing Industries
This paper analyzes propensity to patent and the effect of patented process innovations on output prices for a sample of 24 chemical products. Econometric count data models (Poisson and negative binomial) are used given the discrete nature of the…
Price Competition vs. Quantity Competition: The Role of Uncertainty
We analyze the Nash equilibria of a one-stage game in which the nature of the strategic variables (prices or quantities) is determined endogenously. Duopolists producing differentiated products simultaneously choose either a quantity to produce…
Reputation in Repeated Second Price Auctions
Often, the same set of bidders take part in a series of similar but independent auctions. If bidders draw inferences from the past behaviour of others, then the auctions cannot be analysed independently. In particular, this paper shows that it…
Shadow Pricing with Suboptimal Policy Rules
This paper aims to clarify different views on the validity of the Little-Mirrlees border price rule for project evaluation in a context where the Government chooses its controls suboptimally in a systematic fashion. The rule is shown to be valid…
Structural Relations in Organizations: On the Relationship Between Behavior, Belief and Formal Structure
Research concerning organizational structure has reached an impasse. Two approaches to structure research have remained isolated despite their complementary insights and methodologies. In mainstream structure research, organizational structures…