Brand proliferation is examined as an instrument of competition among established firms and as a means to limit entry in a model with both firm and product-specific differentiation. We find that the incentives to proliferate, the credibility of proliferation as an entry barrier, and the welfare...

We study the welfare implications of market power in a model where banks choose between credit rationing and monitoring in order to alleviate an underlying moral-hazard problem. We show that the effect of banks’ market power on social welfare is the result of two countervailing effects. On the...

Competition with product rivalry is examined in a model where products are differentiated by both quality and brand name. With no commitment, firms produce a full product line. When firms can commit to restrict their product offerings, firms specialize if the degree of brand-specific...

This paper presents a simple model of compatibility and bundling in industries where consumers assemble several necessary components into a system that is close to their ideal. The authors show that, for a wide range of parameters, firms will choose to produce compatible components but will...