We consider a case in which two competing suppliers of hardware devices and content each chooses whether to make its content compatible with the other’s device. Our main result is that the outcome of these choices depends upon whether the firms’ major source of profit lies in the sale of...

We conduct a basic analysis of entry and exit in the US broadband market, using a complete FCC census of providers from 2005 to 2008. There is a tremendous amount of (simultaneous) entry and exit in the US broadband market. Most entry is from existing providers expanding into new geographic...

In this paper, we ask how antitrust immunity subject to a carve-out affects collusion incentives in international airline alliances. We show that the gains from economies of density due to higher interline traffic under the alliance strengthen the incentive to collude on the interhub route,...

In this paper we develop a methodology to quantify the value to consumers of the non-price characteristics of airline networks. Our research demonstrates that analyses that ignore the quality effects associated with expanded airline networks generate incorrect findings and thus should not form...

This paper surveys the literature on scale and scope economies in the water and sewerage industry. The magnitude of scale and scope economies determines the cost efficient configuration of any industry. In the case of a regulated sector, reliable estimates of these economies are relevant to...

This paper examines the design of vertically related industries with a regulated monopolistic upstream input and competitive downstream activities. Two institutional patterns are investigated. Ownership separation entails full unbundling between upstream and downstream activities. Legal...

Payment cards have been a perennial source of debate among economists. That debate received additional fodder in 2010 with passage in the US of the Durbin Amendment, which targets debit card interchange fees. I assess the Durbin Amendment, testing the interchange fee cap it imposes against the...

This paper analyzes competition in a two-period differentiated-products duopoly in the presence of both switching costs and network effects. We show that they have opposite implications on the demand side, specially in the first period. Switching costs reduce demand elasticities and network...

This paper studies the performance of a direct charging regime in the ATM market in the presence of uninformed consumers who fail to recognize all relevant fees when selecting a bank. We show that the success of a direct charging regime critically depends on consumer information: the equilibrium...

Regional sports networks (RSNs) have become among the most important and expensive programming carried by multi-channel video programming distributors (MVPDs), many of which have acquired RSNs in whole or in part. Under Nash bargaining theory, vertical integration creates incentives to charge...