The implementation of automated solutions in manufacturing commonly involves substantial investments in terms of both human and financial resources, and it exposes the firms to the risk of substantial losses if the expected benefits fail to materialize. It is therefore important that decisions related to automated solutions are well supported. The maturity level differs across industry sectors, and the wood products industry is lagging behind in some respects. The purpose of this paper is to explore the potential challenges the wood products industry is facing related to automation decisions when designing manufacturing systems and suggest strategies that can support such decisions, with inspiration from another industrial sector. A multiple case study was conducted, involving a development project carried out in the wood products industry and another in the presumably more mature automotive industry. Automation decisions were studied in the different phases prior to the implementation of the physical manufacturing system. The findings showed both similarities and differences between the development projects. For example, in both development projects, it was decided to reach out to automation suppliers for automation technology acquisition. However, the decision on to which degree to collaborate with the automation suppliers differed. Based on the similarities and differences pointed out, ideas were put forward that might support the wood products industry.

Firms spend a half-trillion dollars advertising each year. To model and examine the welfare effects of advertising with heterogeneous goods Grossman and Shapiro (1984) model informative advertising in monopolistic competition find that informative advertising is socially excessive for large numbers of sellers. However, it has been noted that their equilibrium may not exist. We present a tractable model of informative advertising in monopolistic competition replacing the standard assumption of a finite number of firms with a continuum of firms. We derive conditions for equilibrium existence and find that in the monopolistically-competitive model, informative advertising is socially insufficient. We also find that with free entry, the measure of the set of active firms is lower than the socially optimal one. The comparison of our results with the results of Grossman and Shapiro (1984) also shows that a pure-strategy, symmetric equilibrium typically does not exist in the latter model if the number of sellers is large, a fact which accounts for the different conclusions drawn in the two papers. 

In recent years, commercial banks have substantially reduced the number of their branch offices. We address the question of whether or not the increased distance to lenders caused by branch office closures translates into a lower credit supply for small and medium sized enterprises (SMEs). We use a unique dataset based on 33,000 loan contracts from a state-owned Swedish bank designed to support credit-constrained SMEs, and relate loan size and the interest rate to the number of nearby commercial bank offices. We use an IV strategy to account for potential endogeneity of the number of banks in a region. In line with previous studies, we find that interest rates increase with distance, while loan size decreases with distance. Thus, a larger number of local bank offices increases the local credit supply, and thereby reduces credit constraints of nearby SMEs.

The wood products industry is facing increasing challenges from global competition, and automation of manufacturing can greatly help companies in the industry to handle such challenges. Investments in automation of manufacturing are more likely to succeed if they are the expression of informed and systematic decisions. This paper aims to increase the knowledge on the process leading to investment decisions on automation of manufacturing in the wood products industry, as well as on the aspects considered in such processes. A real-time case study was conducted at a large Swedish wood manufacturing company to gain in-depth understanding of decisions related to automation investments. The findings demonstrate that mainly representatives from manufacturing and marketing functions were involved throughout the investment project's length. This could be a contributing factor to the narrow view on automation of manufacturing when decisions are made, where focus is placed on financial and technological aspects. The findings further show a limited knowledge regarding automation of manufacturing, which resulted in a tendency to heavily rely on the technical supplier’s recommendations. This paper identifies the weak points related to decisions on automation of manufacturing in the wood products industry and provides insights on how to support the decision process.

In the past few decades, commercial banks have substantially reduced the number of their branch offices. We address the question of whether or not the increased distance from the lenders correspondingly faced by many small and medium sized enterprises (SMEs) translates into a lower volume of loans. We use a unique dataset on loans from a state owned Swedish bank designed to support credit-constrained SMEs and interact their loan portfolio with the number of nearby commercial bank offices at the firm level along with an IV strategy to account for endogeneity. The estimation results strongly indicate that a larger number of local bank offices increases the local credit supply, and decreases the credit constraints of nearby SMEs.

In their seminal paper, Grossman and Shapiro (1984) find that informative advertising is socially excessive in an oligopoly pure-strategy symmetric equilibrium (PSSE). However, their analysis assumed that every consumer receives at least one advertisement. Christou and Vettas (2008) present counter-examples, showing that if this assumption does not hold, the PSSE advertising may, instead, be insufficient. Christou and Vettas (2008) also show by example that quasiconcavity may not hold in Grossman and Shapiro (1984) and that there may be non-existence due to discontinuities from undercutting, although deriving existence conditions (not derived in Grossman and Shapiro (1984)) is infeasible. We revisit the question by modeling firms (like consumers) as a continuum, which mitigates the discontinuity, enables the derivation of intuitive existence conditions for a PSSE, and allows a general analysis including when some consumers receive no advertisements. More importantly, we find that advertising is always socially insufficient and entry is also insufficient.

In their seminal paper Grossman and Shapiro (1984) find that informative advertising is socially excessive in an oligopoly (entry is also socially excessive). However, to derive the results, it was assumed that all consumers receive at least one ad, i.e., advertising does not have a demand creation effect. Christou and Vettas (2008), Tirole (1988), among others, have presented counter-examples in alternative settings, showing when the assumption does not hold, advertising may socially advertising. Christou and Vettas (2008) also show that quasiconcavity may not hold and present examples in which the equilibrium does not exist as firms would deviate to a higher price. We revisit the question by modeling firms (like consumers) as a continuum, which eliminates the discontinuity that bedeviled both papers and allows us to not use the assumption that all consumers receive at least one ad. As a result, we are able to derive explicit and intuitive conditions for an equilibrium. More importantly, we find instead advertising is socially insufficient regardless of the fraction of the consumers who receive an ad, including when there is effectively no demand creation. We also find that there is insufficient entry instead of excess entry. We provide intuition for the difference between our and previous results, which partly turns on firms deviating to a lower (supercompetitive) price.

Consumers often face a trade off when considering whether to share more information with firms - for example, by letting an app access their list of contacts, location or browsing history. More precise information can help the sellers to make more targeted offers, and can yield multiple relevant offers and lower prices. However, information disclosure can entail costs via identity theft, fraud, extortion etc. In this paper, we explore this trade-off in a model in which a monopoly platform can gather personal customer information, and offer it to other sellers. The consumers differ relatively to their aversion to information disclosure, and the platform can offer them menus with different disclosure levels. In equilibrium, options featuring greater disclosure levels command a premium, and information about the consumers choosing them is sold to the sellers at a lower price. If we compare scenarios with alternative menus, a greater number of options corresponds to a greater average disclosure level and a greater surplus. If the potential surplus from the induced exchanges is relatively large, equilibrium with a binary menu features levels of the platform’s profit and the surplus close to those achieved with a continuum of offers.

This paper investigates a model in which a monopolist obtains information about her customers’ preferences by delivering her product, and can disclose the same information to other sellers, at a price. More refined information is a more effective facilitator of further exchanges, and boosts competition among the sellers using it, but entails a greater nuisance for the consumers. The actual nuisance implied by any given disclosure level differs across consumers. The monopolist makes two alternative offers. In equilibrium, the prices can induce too many consumers to choose the low disclosure-offer, the disclosure levels can be inconsistent with surplus maximization, and the average disclosure level is lower than the surplus-maximizing one. A lower proportional participation of the monopolist in the profits from the induced exchanges typically entails more differentiated disclosure levels; the response of the average level is non-monotonic. The high disclosure-offer can feature a higher price, due to the higher probability of further trade and to the more intense competition among the sellers.