We explore the long run dynamic implications of subjecting an imperfectly competitive industry to market-based pollution regulation. We are particularly interested in understanding how the allocation of emissions permits in a cap-and-trade program can influence the evolution of a trade exposed...

Incompatibility in markets with network effects can either benefit orharm consumers. Incompatibility reduces consumers' ability to "mixand match" components offered by different sellers, but can also beassociated with changes in product attributes that might benefitconsumers. In this paper, we...