We study the profitability and welfare effects of merger in a strategic trade policy environment. Merger changes the strategic trade policy equilibrium. We show that merger can be profitable and welfare enhancing here, even though it is not profitable in a laissez-faire economy. A key element is...

Consider a committee that in the past has made a promise not to confiscate the profits from a foreign investor. After the investment has taken place, there is a material benefit if the committee decides to default on the earlier promise. But there are also some small moral costs for those who...

This paper considers education investment and public education policy in closed and open economies with an extortionary government. The extortionary government in a closed economy chooses an education policy in order to overcome a hold-up problem of time-consistent taxation similar to benevolent...

In this paper we briefly report some key data on educational expenditure and output in OECD countries and then turn to the motivations for public education. Public education can be important for equal opportunities and has a number of redistributional aspects within and between generations. We...

Competition in some product markets takes the form of a contest. If some firms cooperate in such markets, they must decide how to allocate effort on each of their products and whether to reduce the number of their products in the competition. We show how this decision depends on the convexity...

In this note we consider the preferences of a profit maximizing firm for international ownership in a world in which firms compete in an international Cournot oligopoly, and in which countries use strategic trade policy. We find that firms prefer national ownership and show that full...

Merged firms are typically rather complex organizations. Accordingly, me rger has a more profound effect on the structure of a market than simply reducing the number of competitors. We show that this may render horizontal mergers profitable and welfare – improving even if costs are linear. The...

The standard contest model in which participants compete in a single dimension is well understood and documented. Multi-dimension extensions are possible but are liable to increase the complexity of the contest structure, mitigating one of its main advantages: simplicity. In this paper we...

Where product innovation requires several complementary patents, fragmented property rights can be a factor that limits firms' willingness to invest in the development and commercialization of new products. This paper studies multiple simultaneous R&D contests for complementary patents and how...

This paper considers education investment and public education subsidies in closed and open economies with an extortionary government. The extortionary government in a closed economy has incentives to subsidize education in order to overcome a hold-up problem of time consistent taxation, similar...