Predation occurs when a firm offers consumers favorable deals, usually in the short run, that get rid of competition and thereby harm consumers in the long run. Modern economic theory has shown how commitment or collective-action problems among consumers can lead to such paradoxical effects.But...

This paper studies the ability of an agent and a principal to achieve the first-best outcome when the agent invests in an asset that has greater value if owned by the principal than by the agent. When contracts can be renegotiated, a well-known danger is that the principal can holdup the agent,...

We consider a bilateral trading problem in which one or both parties makes relationship-specific investments before trade. Without adequate contractual protection, the prospect of later holdups discourages investment. We postulate that the parties can sign noncontingent contracts prior to...

Observers worry that generic patent challenges are on the rise and reduce the effective market life of drugs. A related concern is that challenges disproportionately target high-sales drugs, reducing market life for these “blockbusters.”

Many of those concerned with public utility regulation assume that federal antitrust law has little bearing on regulated industries. That assumption is erroneous. This paper indicates some of the ways in which antitrust law affects regulated firms. It begins with a few words about antitrust...