The purpose of this discussion paper is to contribute to the analysis of two questions. Should a merger control system take into account efficiency gains from horizontal mergers, and balance these gains against the anti-competitive effects of mergers? If so, how should a system be designed to...

In many intermediate goods markets buyers and sellers both have market power. Contracts are usually long-term and negotiated bilaterally, codifying many elements in addition to price. We model such bilateral oligopolies as a set of simultaneous Rubinstein-Ståhl bargainings over contracts...

We explain the empirical puzzle why mergers reduce profits and raise share prices. If being an “insider” is better than being an “outsider,” firms may merge to preempt their partner merging with a rival. The stock-value of the insiders is increased, since the risk of becoming an outsider...

Car prices in Europe are characterized by large and persistent differences across countries. The purpose of this paper is to document and explain this price dispersion. Using a panel data set extending from 1980 to 1993, we first demonstrate two main facts concerning car prices in Europe: (1)...

This paper studies collusive behavior in a repeated oligopoly model with localized competition. Private information about the rivals' past actions naturally arises from this product market structure. The resulting communication problems imply that firms should adopt strategies with sufficiently...

This paper proposes a reduced form approach to identify the presence of monopoly power in oligopolies characterized by vertical product differentiation. In a fairly general model I derive an explicit solution for the reduced form pricing equations under the hypothesis that firms behave...