We study third degree price discrimination in intermediate good markets, in which costs of production for the downstream firms are determined by their investment choices. We focus on the effect of the sequence of firm actions and analyze two models with different timing of investments, before or...

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>