Publications

Educators

2024
Working Paper

Consumer Inertia and Market Power

By: Alexander MacKay and Marc Remer

We study the pricing decisions of firms in the presence of consumer inertia. Inertia, which can arise from habit formation, brand loyalty, and switching costs, generates dynamic pricing incentives. These incentives mediate the impact of competition on market power in... View Details

Keywords: Consumer Inertia; Market Power; Dynamic Competition; Demand Estimation; Consumer Behavior; Markets; Performance; Competition; Price

2024
Working Paper

Ponzi Funds

By: Philippe van der Beck, Jean-Philippe Bouchaud and Dario Villamaina

Many active funds hold concentrated portfolios. Flow-driven trading causes price pressure, which pushes up the funds’ existing positions resulting in realized returns. We decompose fund returns into a price pressure (self-inflated) and a fundamental component and... View Details

Keywords: Investment Funds; Investment Portfolio; Investment Return; Price Bubble; Financial Reporting; Financial Liquidity

2023
Working Paper

Dynamic Pricing, Intertemporal Spillovers, and Efficiency

By: Alexander J. MacKay, Dennis Svartbäck and Anders G. Ekholm

Pricing technology that allows firms to rapidly adjust prices has two potential benefits. Time-varying prices can respond to high-frequency demand shocks to generate greater revenues, and they can also be used to smooth out demand to reduce costs. Using data... View Details

Keywords: Price; Consumer Behavior; Applications and Software; Volatility

05 Jul 2006
First Look

First Look: July 5, 2006

Working PapersThe Framing Effect of Price Format Marco Bertini and Luc Wathieu Existing evidence suggests that preferences are affected by whether a price is presented as one all-inclusive expense or... View Details

Keywords: Sean Silverthorne

28 Aug 2011
News

Long-term housing demand trend is positive

How Is Foreign Aid Spent?

We use oil price fluctuations to test the impact of transfers from wealthy OPEC nations to their poorer Muslim allies. The instrument identifies plausibly exogenous variation in foreign aid. We investigate how aid is spent by tracking its short-run effect on... View Details

March 2020
Article

Estimating the Value of Electricity Storage in PJM: Arbitrage and Some Welfare Effects

By: Ramteen Sioshansi, Paul Denholm, Thomas Jenkin and Jurgen Weiss

Significant increases in prices and price volatility of natural gas and electricity have raised interest in the potential economic opportunities for electricity storage. The paper analyzes the arbitrage value of a price-taking storage device in PJM during the six-year... View Details

Keywords: Energy Storage; Arbitrage; Energy; Energy Industry

Find at Harvard

23 Oct 2018
Working Paper Summaries

Opportunistic Returns and Dynamic Pricing: Empirical Evidence from Online Retailing in Emerging Markets

Keywords: by Chaithanya Bandi, Antonio Moreno, Donald Ngwe, and Zhiji Xu; Service

23 Oct 2019
Working Paper Summaries

Decarbonization Factors

Keywords: by Alex Cheema-Fox, Bridget LaPerla, George Serafeim, David Turkington, and Hui (Stacie) Wang

September 2013
Case

SafeBlend Fracturing

By: Benson P. Shapiro, Frank V. Cespedes and Alisa Zalosh

The CEO of SafeBlend Technologies must set a price for the company's environmentally friendly fracturing fluid additive. The firm is negotiating a new contract with its biggest client, Bristol Natural Gas. For the last two years, SafeBlend has been the sole provider of... View Details

Keywords: Information Technology; Customer Relationship Management; Price; Negotiation; Competitive Advantage; Environmental Sustainability; Energy Sources; Sales; Energy Industry

Educators

Research Summary

Ray's current research is on technology platforms - how technology companies can platformize their technology offerings, how platforms impact competitive strategy and create pricing power, and how technology consumers interact with technologies that are platforms. View Details

July 2009
Article

How Is Foreign Aid Spent? Evidence from a Natural Experiment

By: Eric D. Werker, Faisal Z. Ahmed and Charles Cohen

We use oil price fluctuations to test the impact of transfers from wealthy OPEC nations to their poorer Muslim allies. The instrument identifies plausibly exogenous variation in foreign aid. We investigate how aid is spent by tracking its short-run effect on aggregate... View Details

Keywords: Foreign Aid; Money

Find at Harvard

2007
Working Paper

How Is Foreign Aid Spent? Evidence from a Natural Experiment

By: Eric D. Werker, Faisal Z. Ahmed and Charles Cohen

We use oil price fluctuations to construct a new instrument to test the impact of transfers from wealthy OPEC nations to their poorer Muslim allies. The instrument identifies plausibly exogenous variation in foreign aid. We investigate how aid is spent by tracking its... View Details

Keywords: International Finance; Energy Sources; Energy Industry; Asia

October 7, 2021
Article

Carbon Might Be Your Company’s Biggest Financial Liability

By: Robert G. Eccles and John Mulliken

The price of carbon may be zero in many places today, but it’s unlikely to remain zero for long. That means that many companies have hidden liabilities on their books. To cover their carbon short position, executives can take several steps: Measure the position in... View Details

Keywords: Climate Risk; Climate Finance; Risk Management; Governance; Environmental Accounting; Climate Change; Environmental Sustainability

June 2024
Article

Counterparty Risk and Counterparty Choice in the Credit Default Swap Market

By: Wenxin Du, Salil Gadgil, Michael Gordy and Clara Vega

We investigate how market participants price and manage counterparty credit risk using confidential trade repository data on single-name credit default swap (CDS) transactions. We find that counterparty risk has a modest impact on the pricing of CDS contracts but a... View Details

Keywords: Credit Derivatives and Swaps; Market Participation; Risk and Uncertainty; Price; Financial Markets; Credit

Find at Harvard

December 1986 (Revised March 1991)
Supplement

Caterpillar-Komatsu in 1986

By: Christopher A. Bartlett

Provides an update to the global competitive interaction between Caterpillar and Komatsu described in companion cases Caterpillar Tractor and Komatsu Ltd. Caterpillar's response to Komatsu's growing market share is outlined, then the impact of rapidly changing... View Details

Keywords: Competition; Currency Exchange Rate; Price; Global Strategy; Policy; Market Participation; Strategy; Manufacturing Industry; Agriculture and Agribusiness Industry; Industrial Products Industry

October 1996 (Revised April 1997)
Case

Tweeter etc.

By: John T. Gourville and George Wu

In the early 1990s, Tweeter etc., a small regional retailer of higher-end audio and video equipment, faced increasing competitive pricing pressures from several large regional and national consumer electronics chains. In response, in 1993, they introduced "Automatic... View Details

Keywords: Advertising; Customer Focus and Relationships; Price; Market Entry and Exit; Supply Chain Management; Competition; Electronics Industry; Retail Industry

Educators

2014
Working Paper

Firm Competitiveness and Detection of Bribery

By: George Serafeim

Using survey data from firms around the world I analyze how detection of bribery has impacted a firm's competitiveness over the past year. Managers report that the most significant impact was on employee morale, followed by business relations, and then reputation and... View Details

Keywords: Competitiveness; Corruption; Bribery; Employee Engagement; Reputation; Regulation; Competition; Crime and Corruption; Ethics; Performance