The hypothetical monopoly test for market power is translated into an operational 'formula' involving cost and demand elasticities. The importance of the choice of the pricing benchmark is emphasized - and of why it is important to incorporate an assessment of cost structure when conducting such...

A common procedure in experiments is to use binary lotteries to induce in all subjects pre-specified risk preferences. The validity of this procedure has been established only for a subject performing a single task, yet the procedure is normally applied in multi-task settings. This article...