The paper proves that monopolistic price discrimination increases output under conditions of constant demand elasticity. The demonstration is simpler than that of Formby, Layson and Smith (1983)

We discuss the effects of bundling two goods offered by two symmetric firms. This situation requires the use of some sharing rule for the profits from the sales of the bundle. We show that the choice of this rule may have substantial effects on prices and profits – even if the possible...

One important issue in firms' governance is how to incentives so that activity centres can become more efficient. In this paper, we first introduce an agency contract where the salary of the manager of an activity centre that produces an intermediate product is dependent of its performance....

Existence problems have been pervasive in the economics literature on horizontal product differentiation. Adding a directional constraint to a standard Hotelling location model leads to a general result of non-existence of a pure strategy Nash equilibrium. Here we present a slightly different...

White (1996), Poyago-Theotoky (2001) and Myles (2002) prove that in the mixed oligopoly the optimal subsidy, equilibrium output level, all firms' profits and social welfare are identical irrespective of whether the public firm maximizes welfare or profit and moves simultaneously with private...

This paper develops a methodology to uncover consumer preferences from a discrete-choice demand model of product differentiation using plant-level data. When prices and quantities are observed, the appropriate strategy for estimating such model is well developed. However, most plant-level data...

There has been a dramatic increase in market concentration in the retail sector in the United States. Although it is typically assumed that standard supply-side forces of returns to scale are behind this trend, it is also possible that demand-side forces have played a role, i.e., that consumers...

We are the first to confirm that sufficient cost convexity in a Stackelberg model generates profitable mergers between two leaders and between two followers. Moreover, the degree of convexity required for leaders to merge is generally far smaller than that required for followers. Most...

We examine behavior in Cournot and Stackelberg markets in a simple experiment where participants experience both market forms. Moreover, Stackelberg followers have to submit full response strategies. Our main finding is that Stackelberg followers employ rather flat, reciprocal response function,...

The aim of this work is to test the Gibrat's Law hypothesis for Brazilian firms. Gibrat''s Law establishes that firm growth is a random walk, it means that the probability of a given proportionale change in size during a specified period is the same for all firms in a given industry. This work...