According to Stigler [1951], vertical disintegration should be the typical development in growing industries, vertical integration in declining industries. The basic argument is that firms will spin off production stages subject to increasing returns to scale in response to market growth. This...

This article studies the design of optimal mechanisms to regulate entry in natural oligopoly markets, assuming the regulator is unable to control the behaviour of firms once they are in the market. We adapt the Clark-Groves mechanism, characterize the optimal mechanism that maximizes the...

In their seminal solution of the chain store paradox Kreps and Wilson assumed that the incumbent monopolist is predisposed, with a small probability, to ght entry. Milgrom and Roberts suggested to view this predisposition to ght as a result of precommitment to an aggressive course of action....