Thought Leadership

Publishers face an existential threat from a variety of news aggregators, such as free aggregators (e.g., Google News, Yahoo News), micropayment-facilitating aggregators (e.g., Blendle), and subscription-charging aggregators (e.g., Apple News+). The authors seek to theoretically examine whether publishers can collaborate and compete with the different types of news aggregators and, if so, what pricing and content-sharing strategies publishers should pursue. In the absence of a news aggregator, publishers sell their content as a composite publication; this intensifies interpublisher price competition and hurts publishers’ profits. A free aggregator, however, could help unbundle the articles of a publisher. Moreover, if publishers share articles on the same topic with a free aggregator, they can completely eliminate interpublisher competition and replace it with competition between the aggregator and the publishers, but they only partially eliminate interpublisher competition if they share articles on different topics with it. Yet, the free aggregator needs to bring sufficient additional traffic to the publishers to motivate them to share content and collaborate with it. Conversely, publishers will be willing to collaborate with a micropayment-facilitating aggregator even if it does not bring additional traffic to the publishers. This is because a micropayment-facilitating aggregator helps publishers unbundle their content and price discriminate. Lastly, publishers can be motivated to collaborate even with a subscription-charging aggregator that is powerful enough to dictate the terms of the revenue-sharing arrangement with the publishers. This is because the subscription-charging aggregator improves its profits without hurting the publishers’ surplus.

In a tax—public goods reciprocity framework between citizens and the state, managers view taxes as a payment to the government in exchange for public goods, and hence they adjust their willingness to pay taxes as public good quality changes. We show that corporate tax planning intensity increases with ground-level ozone pollution. Revisions in ozone pollution regulations cause counties that failed the revised and more stringent standards to reduce ozone pollution. Consequently, firms headquartered in these counties reduced corporate tax planning intensity relative to firms in other counties. The ozone-tax link varies in the predicted directions with public attention to pollution, potential welfare loss due to ozone, managers’ stakeholder orientation, taxpayers’ polluting status, political preferences, and civic norms. We also find consistent results for Superfund cleanups of hazardous waste sites. Our research sheds light on reciprocity as a potential mechanism influencing corporate tax compliance.

Using a long panel data set on Japanese firms, we find that firms make more precise forecasts and less autocorrelated forecast errors as they gain more experience. Then, we build a firm dynamics model where firms gradually learn about their demand by using a noisy signal. Using expectations data over time, we cleanly isolate the learning mechanism from other mechanisms and find that it accounts for 20%–40% of the overall decline in forecast errors over the life cycle. Productivity gains from removing information frictions range from 3% to 12%, with firm entry and exit playing prominent roles.