Other-regarding preferences have been documented in many strategic settings. We provide a model in which the managers of firms in an oligopoly have preferences for both consumer welfare and own income. We find that profit sharing can function as a facilitating practice. Managers must receive a...

type="main" <p>This note studies third degree price discrimination in intermediate good markets. I show that whether a more efficient downstream firm is charged a higher or lower price than a less efficient firm depends on the shape of the demand function. Different from the case in which final...</p>

This paper compares the equilibrium outcomes under simultaneous and sequential price settings in a vertically differentiated market. When the timing of the price game is determined endogenously, it is shown that the sequential play with the high quality firm leading emerges, yielding the highest...

This paper studies the discriminatory pricing of an intermediate good and compares two models with a different timing of investments undertaken by the downstream firms, before or after the upstream monopolist sets the input prices. When the more efficient downstream firm is charged a higher...

Though government intervention is prevalent in the market for research and development (R&D), most literature has focused on the use of subsidies, patents or joint research ventures to obtain the efficient R&D investment. By using a two-stage duopoly model in which firms first choose the level...

In explaining economic phenomena, economic analysis concentrates on selected influences and fixes the host of other factors under a ceteris paribus clause. This view, which goes back to Alfred Marshall (1842-1924), is developed in the first part of the book. Aggregation is viewed as a particular...

Life annuities provide a guaranteed income for the remainder of the recipient’s lifetime, and therefore, annuitization presents an important option when choosing an adequate investment strategy for the retirement ages. While there are numerous research articles studying annuities from a...

Even 50 years after Modigliani/Miller’s irrelevance theorem, the basic question of how firms choose their capital structure remains unclear. This survey paper aims at summarizing and discussing corresponding recent developments in empirical capital structure research, which, in our view, are...

There has been a wide-spread misconception based on the imprecise wording of Art. 52 of the European Patent Convention (EPC) that the protection of business methods by patents is prohibited in Europe. This paper investigates the legal framework set by patent laws with respect to the...