This article analyzes the structure of costs, technology, and productivity in the U.S. automobile industry by estimating a general hedonic joint cost function for domestic automotive production for the Big Three American automobile producers: General Motors, Ford, and Chrysler. In general it is...

It is often argued that competition in the product market reduces managerial slack. We formalize this idea. Suppose that there is a common component to firms' costs, i.e., as one firm's (total and marginal) costs fall, so do those of other firms. Then when costs fall, profit-maximizing firms...

A two-part tariff exists when a fixed payment is made before any purchases are allowed. When buyers visit a monopolist more than once per period, they have the ability to substitute between visits and consumption per visit. This substitution weakens the surplus-extracting power of a two-part...