In this note we take a first step towards the analysis of collusion in markets with spatial competition, focusing on the case of pure location choices. We find that collusion can only be profitable if a coalition contains more than half of all players. This result holds for location games played...

Competition in some product markets takes the form of a contest. If some firms cooperate in such markets, they must decide how to allocate effort on each of their products and whether to reduce the number of their products in the competition. We show how this decision depends on the convexity...

Merged firms are typically rather complex organizations. Accordingly, me rger has a more profound effect on the structure of a market than simply reducing the number of competitors. We show that this may render horizontal mergers profitable and welfare – improving even if costs are linear. The...

We analyze the incidence and welfare effects of unit sales taxes in experimental monopoly and Bertrand markets. We find, in line with economic theory, that firms with no market power are able to shift a high share of a tax burden on to consumers, independent of whether buyers are automated or...

While people on all sides of the political spectrum were amazed that Donald Trump won the Republican nomination this paper demonstrates that Trump's victory was not a crazy event but rather the equilibrium outcome of a multi-candidate race where one candidate, the buffoon, is viewed as likely to...

We study a version of a canonical model of attacks against political regimes where agents have an expressive utility for taking political stances that is scaled by the salience of political decision-making. Increases in political salience can have divergent effects on regime stability depending...

In many economic contexts, an elusive variable of interest is the agent's belief about relevant events, e.g. about other agents' behavior. A growing number of surveys and experiments ask participants to state beliefs explicitly but little is known about the causal relation between beliefs and...

In this note, we argue that the Eurozone needs an institutional exit mechanism to enhance Eurozone stability, and propose modifications to the Dobbs' NEWNEY mechanism, the only mechanism that satisfies the twin properties of eliminating incentives for intra-Eurozone capital flight and...

When asking for donations, charitable organizations often use suggestions concerning the amount of potential contributions. However, the evidence concerning the effects of such suggestions is scarce and inconsistent. Unlike the majority of existing studies concerned with small-money...

We use a laboratory experiment to investigate whether statements from a governmental institution expressing concerns about price increases trigger such increases by facilitating tacit collusion. Such statements on market conduct are disclosed after an exogenous and unexpected upward cost shock....