A government authority regulates an upstream monopolist only if there is a sufficient welfare increase to justify doing so. A downstream firm strategically increases costs in order to force regulation upstream. The decision to regulate increases profit downstream, reduces profit upstream and...

Theory presents two channels through which profit sharing can increase worker training. First, it directly increases training by alleviating hold-up problems and/or encouraging co-workers to provide training. Second, it indirectly increases training by reducing worker separation and increasing...