This article provides a systematic analysis of the welfare effects of vertical integration by a monopolist input supplier into a monopolistically competitive downstream industry. We give sufficient conditions on consumer preferences that lead to Pareto-improving vertical integration and...

Scrutiny of potential mergers by the European Commission often focuses on unilateral effects or single firm dominance. But some cases have involved concerns over coordinated effects: the concern that the merger could increase the likelihood of consumer harm through tacit collusion by the reduced...

In this paper we discuss some of the most important economic issues raised in European Commission vs. Microsoft (2004) concerning the market for work group servers. In our view, the most important economic issues relate to (a) foreclosure incentives and (b) innovation effects of the proposed...

We use experiments to analyze what type of communication is most effective in achieving cooperation in a simple collusion game. Consistent with the theories of collusion and cheap talk, an initial burst of collusion rapidly collapses if subjects can only use a limited message space that does not...

We use experiments to analyze what type of communication is most effective in achieving cooperation in a simple collusion game. Consistent with the existing literature on communication and collusion, even minimal communication leads to a short run increase in collusion. However, in a limited...

We show in this article that the Coase conjecture does not hold when a durable goods monopolist also sells nondurable goods that are demand-related to the durable ones. The presence of nondurable complements or substitutes reduces the rate at which the monopolist introduces the durable good into...

In the last 15 years we have seen a revolution in the use of economics in competition. The central role of economic analysis for good decision making has been acknowledged by the Commission ever since the introduction of a “more economic approach” in merger, antitrust, and state aid policy....

Enforcement against the exploitative abuse of a dominant position is not as prominent as other antitrust fields. Although a renaissance of these cases can be experienced in recent years, the evolution is very limited. This editorial discusses the role of enforcement for these practices and aims...

When will a monopolist have incentives to foreclose a complementary market by degrading compatibility/interoperability of his products with those of rivals? We develop a framework where leveraging extracts more rents from the monopoly market by "restoring" second degree price discrimination. In...

Financial constraints are an important impediment to the growth of small businesses. We study theoretically and empirically how the financial constraints of agents affect their decisions to exert effort, and, hence the organizational decisions and growth of principals, in the context of...