The growing use of the internet by businesses and consumers is rapidly changing the structure, conduct, and performance of different sectors of the global economy. This ten chapter volume on organizing the "new economy" documents some of these changes, and examines the ramifications for business strategy and public policy.

Chapters in this volume explain how the Internet has altered the conduct of firms competing in "new economy" markets (such as the online market for air travel information), changed the competitive and technological structure of a host of industries, and has impacted the valuation and performance of businesses (including online-retailers). In addition, contributors to this volume document that online price dispersion is ubiquitous worldwide, quantify the value of reputation in online auction markets, and explain optimal business behavior in "new economy" settings where network effects, product compatibility, and market dynamics are important.

The breadth of topics in this volume, coupled with the expertise and diverse backgrounds of its contributors, make Organizing the New Industrial Economy a unique and valuable addition to the growing literature in the area. This volume is part of Elsevier's Advances in Applied Microeconomics series - an annual research volume that disseminates frontier research well in advance of journals and other outlets. For additional information about Internet-related projects, or for more information about this series and planned future volumes, please visit the editor's site at http: //www.nash-equilibrium.comhttp: //www.nash-equilibrium.com

Hardbound. Volume 9 is entitled Industrial Organization and is the ninth volume in the series Advances in Applied Microeconomics. This series provides a forum in which researchers may disseminate frontier research in applied microeconomics to include both theoretical and empirical contributions in applied areas such as industrial organization, consumer and producer behavior, public economics, natural resources, and other applied microeconomic fields. Volumes are published along themes and contain theoretical papers that apply state-of-the-art theory to model important real-world phenomenon, as well as empirical papers that examine such phenomenon.

Advances in Applied Micro-economics

Volume 10 is entitled "Advertising and Differentiated Products," and is part of the annual series "Advances in Applied Microeconomics." The series provides a forum in which researchers disseminate frontier research in applied microeconomics. The volume contains 11 chapters, which cover theoretical and empirical contributions. Four chapters examine theoretical models of incomplete information, product innovations in services, generic advertising, and brand loyalty and price competition. The seven empirical chapters examine both advertising and product differentiation, including generic advertising, advertising bans and the First Amendment, alcoholic beverage advertising, magazines advertising and news stand circulation, product variety in radio broadcasting, mandated exclusive territories, and pricing dynamics in the retail sector.

The Internet has revolutionized the way consumers and firms interact in the marketplace, and it has dramatically changed the information enjoyed by market participants at various points in the value chain. This volume on the Internet and e-commerce provides academics and practitioners with useful research on the 'glue' that holds the new economy together. The first six chapters of the text examine four broad issues: the role of the Internet in fostering competition, its impact on price dispersion and on business-to-business transactions, and the importance of reputation and trust in the new economy. The last four chapters examine the impact of the Internet on the organization of firms, the efficiency of auctions in the Internet age, how consumers choose websites and acquire product information, and the growing problem of congestion on the Internet. This volume is part of Emerald's "Advances in Applied Microeconomics" series - an annual research volume that seeks to disseminate frontier research well in advance of journals and other outlets.

This is the sixth volume in the series discussing advances in applied microeconomics. It covers issues such as efficiency in auctions when bidders have private information about competitors, lift-lining, the general double auction mechanism, and lottery qualification auctions.

This material is based upon work supported by the National Science Foundation under grant #SES-8410190. Any opinions, findings, and conclusions or recommendations expressed in this publication are those of the authors and do not necessari y reflect the views of the National Science Foundation. This support was crucial to the completion of this project, and we are grateful for it. As is usually the case when doing academic research, we are also indebted to a number of individuals. Robert Gillingham, John Greenlees, Jack Triplett, and Paul Harte-Chen freely gave of their time to share their ideas concerning income-based cost of living indices. Seminar participants at the BLS, the University of Karlsruhe, and Tilburg University provided insightful comments on preliminary portions of the manuscript. Bill Stober provided encouragement, and Desmond Lo and Albert Tsui read parts of the manuscript. We owe a special thanks to Bert Balk for providing detailed handwritten comments on a preliminary draft. Evelyn Buchanan and Audrey Abel did an excellent job of typing and retyping numerous drafts of the manuscript. Finally, a very warm thanks to our wives, for enduring. CONTENTS Page PREFACE PART I.