When current employers have more information about worker quality than do potential employers, sectoral shocks cause structural unemployment. That is, some workers laid off from an injured sector remain unemployed despite the fact that they are of sufficient quality to be productively employed...

Backward vertical integration by a dominant firm into an upstream competitive industry causes both input and output prices to rise. The dominant firm's advantage may or may not offset the negative effect of higher prices on social welfare. Whether it does depends on a simple indicator derived...

High and declining prices signal a high-quality product. High prices are the efficient means of signaling, because the consequent loss of sales volume is most damaging for lower-cost, lower-quality products. As time passes and the number of informed consumers increases, the signaling distortion...

The authors analyze how to award a monopoly franchise when the objective is to maximize expected consumers' surplus net of transfer payments to the producer. Potential producers initially possess independent private information about uncertain production costs. Only the chosen producer...

Strategic implications of the learning curve hypothesis are analyzed in the context of a price-setting, differentiated duopoly selling to a sequence of heterogeneous buyers with uncertain demands. A unique Markov perfect equilibrium is characterized and sufficient conditions are provided for...

Many oligopolies exhibit continuing technological change and lumpy costs of adopting new technologies. If firms choose adoption dates in a game of timing and if the downstream market structure is a Bertrand duopoly, the equilibrium adoption pattern displays rent-dissipating increasing dominance,...