This paper develops a new model, which allows for the co-existence of hub-and-spoke and point-to-point networks in the airline industry. Passengers are segmented between the non-stop and one-stop services. In the baseline model, the monopoly airline’s ability to segment the market and...

Rochet and Tirole have derived an elasticity rule for relative prices in two-sided markets. This rule is seen as counterintuitive because it seems to imply that the "more elastic side of the market" is charged more. In this note it is argued that this interpretation is based on the assumption...

Among the many crucial issues in infrastructure regulation has been how to handle network effects. These can both cause monopoly and complicate the management of partial transitions to competition in telecommunications and electricity. The recent global financial crisis itself reflects network...

To understand the relationship between information flows and white-collar output, we collected unique data on email communications to study the network connecting individuals in a management recruiting firm. We also gathered data on revenues and contracts at the individual level. Our empirical...

We present a price cap mechanism, which features an external standard, constructed to elicit efficient utility performance. We focus on a method for setting the external standard, which is usually based on industry total factor productivity (TFP), when 'peer' data are not readily available. The...

In two-sided markets where the platform is composed of a set of components, a monopolist may have an incentive to foreclose competition in the complementary market. By introducing incompatibility, the monopolist can exclude its complementors, thereby capturing surplus from both sides of...

The Shellpot Bridge is a 536-foot swing bridge located on a rail freight bypass route around Wilmington, Delaware. When the bridge failed in 1994, Conrail, then the bridge's owner, elected not to repair it due to declining freight volume. The State of Delaware reached agreement with the new rail...

In a fully liberalized postal market, two business models will be possible for a new postal operator: (1) access: where the firm performs the upstream operations and uses the incumbent's network for final delivery and (2) bypass where the competing firm controls the entire supply chain and...

Airline deregulation in Ireland arose from a parliamentary revolt in 1984 against legislation to imprison and fine those selling airline tickets below government approved fares. The revolt was heavily influenced by US airline deregulation in 1978 and the writings of Alfred Kahn. The results were...

This paper covers network investment problems under decentralized control of regulation, infrastructure ownership and management. The model features two countries managing domestic infrastructures, used simultaneously for downstream international service provision. Initially, the welfare losses...