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Nicolas Eschenbaum
Last Name
Eschenbaum
First name
Nicolas
Email
nicolas.eschenbaum@unisg.ch
Phone
+41 71 224 3088
Homepage
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1 - 7 of 7
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PublicationExplaining Escalating Prices and Fines: A Unified ApproachThis paper provides an explanation for escalating prices and fines based on a unified analytical framework that nests monopoly pricing and optimal law enforcement. We show that escalation emerges as an optimal outcome if the principal (i) lacks commitment ability, and (ii) gives less than full weight to agent benefits. Escalation is driven by decreasing transfers for non-active agents rather than increasing transfers for active agents. Some forward-looking agents then strategically delay their activity, which drives a wedge between the optimal static transfer and the benefit of an indifferent agent. This wedge is the source of escalation.Type: journal articleJournal: Journal of Economic Behavior & OrganizationVolume: 171
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PublicationType: working paper
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PublicationType: working paper
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PublicationDynamic Monopoly Pricing With Multiple Varieties: Trading UpThis paper studies dynamic monopoly pricing for a class of settings that includes multiple durable, multiple rental, or a mix of varieties. We show that the driving force behind pricing dynamics is the seller’s incentive to switch consumers—buyers and non-buyers—to higher-valued consumption options by lowering prices (“trading up”). If consumers cannot be traded up from the static optimal allocation, pricing dynamics do not emerge in equilibrium. If consumers can be traded up, pricing dynamics arise until all trading-up opportunities are exhausted. We study the conditions under which pricing dynamics end in finite time and characterize the final prices at which dynamics end.Type: working paper
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PublicationType: working paper
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PublicationType: working paper