Vertical integration in an environment without foreclosure, or more generally without any mechanisms that restrict competition among firms, and subsidization of firms' production are two separate mechanisms that raise consumer welfare, and both have been proposed as antidotes to certain aspects...

This paper studies the interplay between the wage gap and government spending in a small open economy facing a shock in trade policy. We consider a specific factor model with an export sector, which uses skilled labour, and an import-competing sector, which uses unskilled labour. We find the...

It is widely believed that vertical integration in an environment without foreclosure, or more generally without any mechanism that restricts competition among firms, raises the welfare of consumers. In this paper we show that this can be overturned in a standard setting. We consider a vertical...

It is widely believed that vertical integration in an environment without foreclosure, or more generally without any mechanism that restricts competition among firms, raises the welfare of consumers. In this paper we show that this can be overturned in a standard setting. We consider a vertical...

Two well-known mechanisms for enhancing managers' accountability are yardstick competition and internal monitoring. Yardstick competition puts managers in direct competition when firms make decisions for re-appointment (Tirole, 2006). Monitoring is used by firms to detect managers' rent-seeking...