Richard Friberg

We study optimal price setting by a monopolist in an infinite horizon model with stochastic costs, moderate inflation, and costly price adjustment. For realistic parameters, chosen to generate observed frequencies of price changes, the model can account for several aggregate regularities. In particular, price reductions are larger but less frequent than price increases, and prices respond considerably faster to cost increases than to cost decreases. The latter asymmetry is more pronounced when input prices are less volatile, as documented by Pelzman (2000).

We use COVID-19 border closings and comprehensive store-level data on Norwegian alcohol sales to quantify the effectcross-border shopping of alcohol on sales volume and commodity tax revenue. Effects are large, for instance, we estimate thatcommodity tax revenue for wine is about 20% lower because of cross-border shopping. Using product level data we establish thateffects come from across all products rather than just a few, but effects are especially marked for bag-in-box wines. Neither avail-ability of the exact same product in Sweden nor idiosyncratic product-level price difference with respect to Sweden has any markedeffect on the impact of cross-border shopping on sales.

Using customer-level data from 2017 for two mobile app word games in France and the US, this study explores the adaptability of customer lifetime value (CLV) models, widely used for e-commerce data, to the mobile app domain. We evaluate the Pareto/NBD model and its four extensions, focusing on dropout process simplification, transaction regularity, dropout-transaction rate correlation, and the inclusion of predictive covariates like gameplay and video views. Although the Pareto/NBD model has strong predictive performance, an extension accounting for dropout-transaction rate correlation excels in out-of-sample performance. By comparing with the e-commerce-based CDNOW dataset, we highlight significant disparities in the relative performance of different models, emphasizing the distinctive nature of mobile app data. We find also slight variations in estimated parameters across different markets, platforms, and games.

This paper examines Amar Bhidé's modernization of Knightian uncertainty as presented in Uncertainty and Enterprise. While Frank Knight's seminal 1921 distinction between risk and uncertainty remains influential, Bhidé argues that uncertainty, as commonly conceived, has become a conceptual dead end. Instead, he proposes an updated framework where uncertainty is understood as doubt arising from missing information about known unknowns. This modernization aims to make uncertainty a more operationally useful concept, particularly in the context of entrepreneurship and firm decision-making. This paper reflects on the applicability of Bhid & eacute;'s ideas beyond entrepreneurship, discussing their relevance to risk management, economic decision-making, and firm strategy. While Bhid & eacute; downplays the significance of Knight's risk-uncertainty dichotomy, this paper argues that the distinction remains analytically valuable, especially in fields such as finance and corporate strategy, where statistical tools play a role in managing risk. Additionally, the discussion revisits the concept of "unknown unknowns" and considers its practical implications for decision-making under extreme uncertainty. Drawing on examples from financial markets, corporate reporting, and mountaineering, the paper highlights how firms and individuals navigate risk and uncertainty in diverse settings. Ultimately, the analysis supports Bhid & eacute;'s call for a broader, more empirically grounded approach to uncertainty.

We use grocery data from Norway and COVID-19 border closings to gauge the effect of cross-border shopping on commodity tax revenue. Detailed store–category-level data identify differential treatment effects that depend on distance to Swedish stores. Economically significant effects extend to up to two hours' drive from the border, and even further for prominent cross-border shopping products, such as beer, cigarettes, and carbonated soft drinks. Across all products, cross-border shopping decreases tax revenue from VAT by 3.6 percent at the national level. National commodity tax revenue from carbonated soft drinks (subject to a sugar tax) is reduced by 8.1 percent and from cigarettes by 11.9 percent.

This study shows that firms regard stock price fragility - exposure to non-fundamental demand shocks stemming from the composition of equity ownership - as a salient corporate risk. We model ex ante corporate responses to higher potential for future stock market misvaluation and then empirically document that within firm variation in equity fragility has effects in line with the model: higher fragility raises cash holdings and lowers investment. Multiple natural experiments support a causal interpretation of the results. The results are shown to be more prominent in the face of high uncertainty and financial constraints. The evidence presents a new dimension of how managerial expectations affect corporate policies.

Using five "freemium" mobile app games on six European markets we examine the effect of price changes on conversion rate, number of users and viewing of rewarded videos. Our difference-in-difference estimation relies on games being available on both the Apple and Google platforms with price changes on only one platform. Our main identification comes from exogenous adjustments of Apples prices in 2021. Own-price elasticities of conversion are in the -1 to -4 range. Watching of rewarded videos decreases as in-app prices decrease with an average elasticity of around.5, but overall play is not affected by changes in in-app prices.

This paper examines hedging against a large market-wide shock in a model with heterogeneous firms and sunk costs of entry. If hedging is voluntary only the most efficient firms hedge against this shock, a finding in line with empirical evidence but at odds with standard motivations for risk management. Hedging affects the critical level of the marginal cost needed to operate in the market. A setting with mandatory hedging is associated with stronger competition than when hedging is voluntary which, in turn, is associated with stronger competition than when hedging is unavailable. © 2022 The Authors. Journal of EconomicsXX1Management Strategy published by Wiley Periodicals LLC.

This article uses firm x national market export and import data for all Swedish private sector firms for 1997-2014 to examine the firm-level contribution of trade and foreign ownership to the correlation between Swedish value added growth and partner country gross domestic product (GDP) growth. Export and import links increase the firm-level correlation but net out for firms that both export to and import from the same market, evidence that this type of 'natural hedging' can help reduce a firm's exposure to foreign economic shocks. We proceed to aggregate the firm-level results to the whole economy and find that severing firm-level ties with a foreign market is predicted to lower the correlation between Swedish value added growth and foreign GDP growth from 0.72 to 0.64 on average. Gabaix's 'granularity' of trade is central to this result: if all firms are given equal weight overall correlations are essentially unaffected by severing firm level ties. Natural hedging is quantitatively important at the firm level and also plays a role in limiting overall comovements.