This paper provides a new perspective on the validity of the so-called quot;leverage theoryquot;. In a model of preemptive innovation in quot;systemsquot; markets, I examine the effect of bundling on Ramp;D incentives. I find that bundling provides a channel through which monopoly...

We consider trade policies intended to affect the production of a foreign monopolist that generates negative externalities. We derive the optimal tariff and optimal import quota and examine which policy measure should be used to maximize domestic welfare. We find that if the domestic government...

We construct a simple two-country model that enables us to examine the interactions between trade in goods and international capital movement under financial imperfection. We show that they are complements in the sense that trade in goods facilitates capital outflow from the South, which is...