We construct a model of market-share contracts with vertical externalities. When a dominant supplier offers a linear wholesale price to a retailer, vertical externalities, well-recognized as double-marginalization problems, arise in the vertical relation. The dominant supplier facing vertical...

This paper examines the role of convertible debt when venture capitals invest in young companies. In venture financing, lenders do not have sufficient information to estimate the productivity of firm's projects.We construct a model in which a borrower can communicate information about the...

We examine the benefits and costs of internal capital allocation with costly information acquisition by an executive officer in the headquarter of the multi-divisional firm. Then we characterize the optimal compensation scheme for the officer that maximizes the expected firm value. The...

We investigate a firm's pre-emptive behavior by comparing Cournot competition and Stackelberg games with one leader and multiple followers, where each firm has access to private information on stochastic demand. We show that the firm prefers pre-emptive quantity choice (Stackelberg leader) to...

We develop a model of property taxation and characterize equilibria under three alternative taxation regimes often used in the public finance literature: decentralized taxation, centralized taxation, and "rent seeking" regimes. We show that decentralized taxation results in inefficiently high...

This paper analyzes tariff competition by investigating the strategic interactions among firms that are highly mobile across national boundaries. Although high transport costs yield a geographic dispersion of the industry, sufficiently low transport costs result in a core-periphery location...

Urban economics, economic geography, and urban planning have widely recognized the importance of urban interactions, such as face-to-face communication or a convivial atmosphere, to understand urban phenomena. However, solitary contemplation is indispensable to enhance ability and creativity. I...