Posada and Straume (J Econ 83:243–265, <CitationRef CitationID="CR5">2004</CitationRef>) analyze a three-firm model of a circular city where two of the firms merge and may choose to relocate. They propose an equilibrium with relocation where taking part in the merger yields higher profits than staying outside, i.e., relocation may solve...</citationref>

This paper establishes that regulating harmless activity can be an effective instrument of law enforcement when the harmless activity and the harmful activity are interdependent. This type of regulation is not without cost, as it distorts the individual choices made by both law-abiding and...