This paper studies the welfare effects of third-degree price discrimination under oligopolistic competition with horizontal product differentiation. We derive a necessary and sufficient condition for price discrimination to improve social welfare: the degree of substitution must be sufficiently...

Are anti-establishment mass media really useful in preventing politicians from behaving dishonestly? This paper proposes a voting model for analyzing how differences in the direction of media bias affect politicians' behavior. In particular, the probability of corruption by an incumbent is...

This paper analyzes the optimality of package bundling by focusing on the ?main and accessory?relationship between two goods. In particular, we consider option package bundling in which an optional good is valuable only if it is consumed together with a certain (nonoptional) base good. We...

This paper studies the effects of Knightian uncertainty, or ambiguity, on entrepreneurial choice. By distinguishing between risk and ambiguity, we first show that ambiguity aversion makes it less likely that an individual will become an entrepreneur. It is also shown that an increase in...

Data from the 1979 cohort of the National Longitudinal Survey of Youth (NLSY79) show that self-employment (nonfarm or nonprofessional) accounts for as high as 7 percent of all yearly labor supplies by young white males (ages 20-39 in years 1979-2000). On the other hand, nearly 30 percent of...

This paper studies the relationship between horizontal product differentiation and the welfare effects of third-degree price discrimination in oligopoly. By deriving linear demand from a representative consumer's utility and focusing on the symmetric equilibrium of a pricing game, we...

This study considers the choice of ownership as a continuous variable, thereby adapting the Grossman-Hart-Moore (GHM) theory of the firm. To do so, it is assumed that parties sign a contract that enables them to divide and use assets even after the negotiation over gains of trade fails. I show...

This paper proposes a method to estimate relative ministerial weights in parliamentary democracies. Specifically, our method combines a bargaining model of government formation with maximum likelihood estimation. The data required for estimation are who formateurs are, what each party’s...

This note shows that a unique mixed Nash equilibrium obtains when there are three voters in Palfrey and Rosenthal's (1983) costly voting game under complete information. Experimental investigation of this result might be interesting.