Browsing by Author "Taylor, CR"

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    Competition or Compensation: Supplier Incentives under the American and Japanese Subcontracting Systems
    (American Economic Review, 1997-09-01) Taylor, CR; Wiggins, SN
    Two fundamentally different subcontracting systems arise as distinct solutions to the quality control problem facing an input buyer. The "American" system involves competitive bidding on each contract, large orders, and inspections. The "Japanese" system involves repeat purchases from a supplier who earns a premium, small orders, and no inspections. Both systems may coexist as local solutions, but the global optimum is determined by the ratio of set-up to inspection costs. This suggests that the adoption of flexible manufacturing equipment and rising product complexity may be responsible for the shift from the American to the Japanese system observed in many industries. (JEL L14, L15, and L22).
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    Consumer privacy and the market for customer information
    (RAND Journal of Economics, 2004-12-01) Taylor, CR
    I investigate consumer privacy and the market for customer information in electronic retailing. The value of customer information derives from the ability of Internet firms to identify individual consumers and charge them personalized prices. I study two settings, a confidential regime in which the sale of customer information is not possible, and a disclosure regime in which one firm may compile and sell a customer list to another firm that uses it to price discriminate. Welfare comparisons depend critically on whether consumers anticipate sale of the list and on demand elasticity. Copyright © 2004, RAND.
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    Local discouragement and global collapse: A theory of coordination avalanches
    (American Economic Review, 2001-03-01) Jeitschko, TD; Taylor, CR
    We study a dynamic game in which all players initially possess the same information and coordinate on a high level of activity. Eventually, players with a long string of bad experiences become inactive. This prospect can cause a coordination avalanche in which all activity in the population stops. Coordination avalanches are part of Pareto-efficient equilibria; they can occur at any point in the game; their occurrence does not depend on the true state of nature; and allowing players to exchange information may merely hasten their onset. We present applications to search markets, organizational meltdown, and inefficient computer upgrades.
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    Supplier surfing: Competition and consumer behavior in subscription markets
    (RAND Journal of Economics, 2003-06-01) Taylor, CR
    I explore the practice of offering subscribers enticements to switch suppliers. This type of competition is natural in subscription markets for homogeneous goods and services. Efficiency is impaired because subscribers are induced to expend resources changing suppliers. Subscription markets are fully competitive only when three or more firms serve the industry. In this case, the price offered to switchers is below cost, while nonswitchers pay a premium. Each firm earns rent on its customer base, but zero expected profit on each new subscriber it attracts. When firms can track switching behavior, consumers may change suppliers in order to establish reputations.
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    The Long Side of the Market and the Short End of the Stick: Bargaining Power and Price Formation in Buyers', Sellers', and Balanced Markets
    (1995) Taylor, CR
    The determinants of bargaining power and price formation in a dynamic exchange market where new traders enter randomly over time are studied. When agents on the long side of the market possess the option to wait for the arrival of future partners, the terms of trade in the spot market must honor the value of this option. The equilibrium terms of trade are expressed in intuitive closed-form equations that highlight the distinct influences of short-run spot-market conditions and long-run market demographics. Copyright 1995, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.