Comparative statics of the firm
Article Abstract:
Complementarity has a fundamental function in the comparative statics of the firm. It emerges naturally in optimal decision-making models in a firm. A powerful tool for making qualitative analyses in such conditions may be provided by the theoretical properties of supermodular functions. A general model of a firm is considered where conditions for complementarities are provided.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1995
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Reputation with noisy precommitment
Article Abstract:
The economic paradox of companies disregarding consumer satisfaction signals can be resolved based on two issues: that the company erred in hiring an inappropriate salesperson, and how strong the consumer signal is. Since firms can never be certain that the appropriate salesperson has been hired, emphasis is placed on the strength of the consumer satisfaction signal.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1998
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Coordination and externalities
Article Abstract:
Decision coordination in a regulatory environment is affected by how informational rents are handled. If regulators leave rents to more efficient agents, reduction in global activity will result due to centralized coordination. However, if principals leave rents to less efficient agents, increased activity will result. Budget balance optimizes these results.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1998
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