This study investigates how franchising chains use advertising to enhance coordination and improve their control over prices set at franchised outlets. We argue that chains use price advertising to inform customers about their desired prices, thereby influencing franchisees to adopt the advertised prices although they are not contractually required to do so. We test our hypotheses using rich outlet‐level price data collected before and after a U.S. nationwide advertising campaign by McDonald's. Our findings indicate that advertising is an effective mechanism that franchising chains use to improve their control over franchisees, enhance uniformity, and reduce franchisee free‐riding. Copyright © 2013 John Wiley & Sons, Ltd.
Usury laws cap the interest rates that lenders can charge. Using data from Prosper.com (an online lending marketplace), I show how interest rate caps affect 1) the probability that a loan is funded 2) the amount a borrower requests 3) the interest rate at which a loan is funded, and 4) loan repayments. The key to my empirical strategy is that there was initially substantial variability in states' interest rate caps, in which Prosper borrowers from different states faced different caps ranging from 6 to 36%. A behind-the-scenes change in loan origination suddenly increased the cap to 36% in all but one state. This change, which was not pre-announced, created "treatment" states whose caps rose and few control states whose caps remained unchanged. I find that higher interest rate caps increase the probability that a loan be funded, especially if its borrower is risky and had been previously * This is a revised version of chapter 1
We use data from a field experiment at Kiva, the online microfinance platform, to examine the role of transactions costs and social distance in decision-making. Requests for loans are either written in English or another language, and our treatment consists of posting requests in the latter category with or without translation. We find evidence that relatively small transactions costs have a large effect on the share of funding coming from speakers of languages other than that in which the request was written. Social distance plays a smaller role in funding decisions.
We use individual-level survey and county-level expenditure data to examine the extent to which Hanukkah celebrations among US Jews are driven by the presence of Christmas. We document that Jews with young children are more likely to celebrate Hanukkah, that this effect is greater for reform Jews and for strongly-identified Jews, and that Jewish-related expenditure on Hanukkah is higher in counties with lower shares of Jews. All these findings are consistent with the hypothesis that celebration of religious holidays is designed not only for worship and enjoyment but also to provide a counterbalance for children against competing cultural influences.Is religious activity responsive to the presence and activity of other religions? How do religious minorities persist and keep their children from converting? We investigate these questions by examining the extent to which the celebration of Hanukkah, a Jewish holiday that is celebrated in December, is driven by the presence of Christmas. Hanukkah celebration in the US is especially suited to address these questions; US Jews are a minority who account for less than 2% of the population, and conversion and intermarriage, which is estimated at over 40% (United Jewish Communities, 2000), are key concerns among American Jews.A key observation that motivated this work is that Hanukkah is a minor holiday in Judaism in general and in Israel in particular but it is one of the most celebrated Jewish holidays in the US. Hanukkah is often called the ÔJewish ChristmasÕ because American Jewish parents give their children gifts, like their Christian neighbours. Surveys we conducted in both Israel and the US confirm that Hanukkah is perceived to be much less important in Israel. This stark difference in the importance of Hanukkah in Israel (where Jews are a majority) and in the US (where Jews are a minority) suggests that the extent of Hanukkah celebration in the US may be driven by the presence of Christmas. With so many other differences between Israel and the US, however, one should be cautious drawing any interpretation from this anecdotal fact. Our strategy is therefore to look within the US, by comparing the behaviour of different American Jewish households.Our hypothesis is that Jews with children are more likely to be affected by the presence of Christmas, because Jewish parents might worry that their children would feel left out, intermarry, or convert. That is, Christmas, a fun holiday for children, induces Jewish parents to ÔcompeteÕ. Thus, if the presence of Christmas is important, we expect that Jewish parents will celebrate Hanukkah more intensively than Jews without children. To account for the alternative hypothesis that children induce more intensive celebration of all holidays regardless of Christmas, we use the intensity of Passover celebration as a control. To account for the alternative hypothesis that Hanukkah is simply a more fun holiday for children than Passover, we use a difference-in-differences
Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We study how mandatory online disclosure of supermarket prices affects prices and price dispersion in brick-and-mortar stores. Using data collected before and after a transparency regulation went into effect in the Israeli food retail market, multiple complementary control groups and relying on a differences-in-differences research design, we document a sharp decline in price dispersion and a 4% to 5% drop in prices following the transparency regulation. The price drop varied across stores and products; it was smaller among private-label products than among branded products, and it was smaller among stores and products that were likely to have been associated with more intense search patterns even before prices became transparent (e.g., products in heavy-discount chains; popular products; products that meet stringent kosher requirements). Finally, we show that prices declined as more consumers used price-comparison websites, and we highlight the role of media coverage in encouraging retailers to set lower prices. Terms of use: Documents inJEL-codes: D830, L810, L660.
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