This article considers the general structure of self-selection models. By imposing conditions which permit the ordering of agents by their preferences, we provide a characterization of the distortions inherent in the sorting process.

An electrical system is modelled with a transmission network, customers, central generators, and independent generators. The system is subject to stochastic failures and stochastic demand parameters. Optimal spot prices are derived for the system. They vary stochastically with space and time,...

This article models the problem of designing predation policy as one of structuring incentives so that firms choose not to practice predation but to engage in nonpredatory competition. The government decides how intensively to search for possible predatory incidents, how thoroughly to...

This article develops a methodology to test alternative oligopoly models and to analyze the effects of entry restrictions on conduct. This methodology is applied to the Uruguayan banking sector, whose legal entry barriers were significantly relaxed during the late 1970s. The results are...

We consider how a principal can use randomized strategies in designing optimal contracts in agency settings. We distinguish between ex post randomization (over fee schedules following act selection by the agent) and ex ante randomization (over fee schedules before act selection). We show that ex...

Most studies of residential energy usage treat energy as a final consumer good. This study explicitly considers the production of housing service flows from stocks of real estate and flows of operating inputs, and considers the demand for residential energy as a factor input. The empirical...

In an earlier paper we presented an entry game with a monopolist and a potential entrant facing financial constraints in which the unique perfect equilibrium involved no entry. Here we consider a one-sided, incomplete information variant of the game in which the monopolist allows for the...

A model of the occurrence of accidents is used to examine liability and safety regulation as means of controlling risks. According to the model, regulation does not result in the appropriate reduction of risk--because the regulator lacks perfect information--nor does liability result in that...

The possibility of a convex industry demand function's leading to two local profit maxima for a monopolist supplier is found to extend to a model of monopolistic competition where two classes of consumers are distinguished by their relative demand for the industry's products. A long-run,...

This article uses Tobin's q, the ratio of the market value of a firm to the replacement value of its physical assets, to measure monopoly power and to examine the relationship between market structure and profitability. Tobin's q is a better measure of monopoly profits than indices of...