We analyse the efficiency effects of the initial permit allocation given to firms with market power in both permit and output market. We examine two models: a long-run model with endogenous technology and capacity choice, and a short-run model with fixed technology and capacity. In the long run,...

In markets with competing interconnected networks like mobile telecommunication markets investments affect the investor's and also any competitors' profits. In a theoretical model it is shown that cost-reducing investments reduce the investor's termination rates and increase competitors'...

This paper studies how investment outcomes in a vertically related industry with a regulated monopolist and downstream competition are affected by diverse regulation imposed investment regimes and the nature of product market competition. We analyze the situation when the regulator determines...