We generalize the captive-and-shopper model of sales to allow asymmetries in production costs and captive audiences, in oligopoly. Bothkinds of asymmetry determine the firms that compete (via randomized sales) to serve the price-comparing shoppers, while other firms exploit their captive audiences. In contrast to a model with symmetric costs (but asymmetric captive audiences), there are natural situations in which more than two firms use sales by engaging in pairwisebattles across distinct price intervals. We also study the choice of production technologies via innovation and extensions to consider costly acquisitions of captives and shoppers, and captives’ choice of captor. (JEL D11, D21, D43, L14, O31)

Rating systems, widely used in online transactions, often reduce buyers' diverse opinions to summary statistics. To explore the consequences of this coarse aggregation, we analyze a dynamic adverse selection model where buyers share anonymous evaluations via a rating system. With heterogeneous buyers, the seller is tempted to secretly lower prices to attract favorable ratings from price-sensitive buyers. That leads to sporadic flash sales. The seller's incentive to manipulate ratings is, however, self-defeating. Our analysis illustrates how the rating system shapes the allocation of surplus and offers insights for platform and product design. (JEL D11, D82, L11, L81)

Many economic decisions, such as whether to invest in developing new skills, change professions, or purchase a technology, benefit from accurate estimation of skill acquisition. We examine the accuracy of such predictions by having study participants predict the speed at which they will master unfamiliar tasks. Across three studies involving two types of tasks and two levels of difficulty, we find systematic underestimation of learning, even after receiving feedback. In a fourth study, participants predicting others' performance showed significantly less underestimation, suggesting that projection bias—overreliance on immediate perceptions of effort and difficulty—may drive prediction errors. (JEL D83, J24)

Labor markets unravel when workers and firms match inefficiently early under limited information. I argue that a significant determinant of unraveling is the presence of a secondary market, where firms can poach workers, and its transparency: how well firms can ascertain workers' value once they are employed by competitors. While early hiring reduces the probability of hiring a high-type worker, it prevents rivals from learning about the worker, making poaching difficult. When secondary markets are very transparent, unraveling disappears. However, the matching remains inefficient due to the incentives of low-tier firms to communicate that they have not hired top-quality workers. (JEL C78, D47, J23, J44, M51)

We study the role of endogenous trust in amplifying ideological bias. Agents in our model learn a sequence of states from sources whose accuracy is ex ante uncertain. Agents learn these accuracies by comparing their own reasoning about the states based on introspection or direct experience to the sources’ reports. Small biases in this reasoning can cause large ideological differences in the agents’ trust in information sources and their beliefs about the states, and may lead agents to become overconfident in their own reasoning. Disagreements can be similar in magnitude whether agents see only ideologically aligned sources or diverse sources. (JEL D42, D72, D83, L25, L82, Z13)

We conduct a large-scale experiment to measure elementary aspects of strategic thinking skills and their linkage to labor market outcomes. Two incentivized measures of higher-order rationality and backward induction are developed. Males’ (females’) strategic thinking skills are positively (negatively) associated with individual labor income. However, among married individuals, strategic thinking skills are significantly and positively associated with their household labor income regardless of gender, highlighting the importance of strategic thinking skills for collective economic success. We argue that the intrahousehold channels encompassing collective labor supply with home-to-workplace spillover and marriage assortative matching offer the most plausible explanation for our findings. (JEL D91, J16, J22, J24, J31)

We examine the effects of overlapping ownership among existing firms deciding whether to enter a product market. We show that in most cases—and especially when overlapping ownership is already widespread—an increase in the extent of overlapping ownership will harm welfare by softening product market competition, reducing entry, and thereby (in contrast to standard results) inducing insufficient entry and magnifying the negative impact of an increase of entry costs on entry. Overlapping ownership can mostly be beneficial only under substantial increasing returns to scale, in which case industry consolidation (induced by overlapping ownership) leads to sizable cost efficiencies. (JEL D21, D24, D43, G24, G34, K21, L13)

We study secure survey designs in organizational settings where fear of retaliation makes it hard to elicit truth. Theory predicts that (i) randomized-response techniques offer no improvement because they are strategically equivalent to direct elicitation, (ii) exogenously distorting survey responses (hard garbling) can improve information transmission, and (iii) the impact of survey design on reporting can be estimated in equilibrium. Laboratory experiments confirm that hard garbling outperforms direct elicitation but randomized response works better than expected. False accusations slightly but persistently bias treatment effect estimates. Additional experiments reveal that play converges to equilibrium if learning from others’ experience is possible. (JEL C83, C90, D83, D91)

Employee spin-offs harm incumbent firms by increasing competition (benefiting consumers) and preventing firm owners from making beneficial investments in workers who may later spin off (harming consumers). We model noncompete agreements (NCAs) as solutions for the firm and analyze the resulting trade-off for consumers. We show that market structure and the nature of investment play large roles. Counterintuitively, increased investment benefits have the potential to harm consumers such that industries where firms value NCAs the most are those where harm is greater. Finally, we draw two analogies between NCAs and antitrust and show how those areas inform NCA policy. (JEL D42, D43, J41, K21, L26, M13, M53)

We develop a revealed preference test for the Choquet expected utility model with ambiguity aversion, which does not rely on specific functional form assumptions on the utility index. It is computationally efficient if the number of states is not too large, even for a large number of observations. This is a nice feature compared to other existing revealed preference tests for decision models with ambiguity. We illustrate the usefulness of our results by implementing our test on two experimental datasets from the literature, and we compare the empirical fit of this model to the subjective expected utility model. (JEL C91, D81, D91, G41)