Using a natural experiment from a retail gasoline antitrust case, we study how asymmetric information sharing affects oligopoly pricing. Empirically, price competition softens when, following case settlement, information sharing shifts from symmetric to asymmetric, with one firm losing access to...

Mergers have the potential for negative social welfare consequences from increased likelihood or effectiveness of future collusion. This raises the question of whether there are meaningful thresholds for the post-merger industry that should trigger significant scrutiny by the Department of...

We model the behavior of Nasdaq momentum traders, also known as SOES bandits. We show that the profitability of SOES bandits decreases in the bid-ask spread, but increases in the effective tick size (ceteris paribus). The patterns we observe in the data are consistent with the model

In their seminal article on multilateral vertical contracting, McAfee and Schwartz (1994) argue that nondiscrimination clauses may be ineffective in curbing opportunism and may thus have no bite. This begs the question why nondiscrimination clauses are commonly observed in intermediate-goods...

The equity markets for smaller issues are characterized by close economic relationships between new issuers and the underwriters who bring the stock public. Underwriters sponsor new issues and often provide liquidity in the secondary market by acting as market makers. This paper analyzes...

We examine choices of leverage and debt maturity, focusing on the impact of investment opportunity sets and regulatory environments. Using the mathematics of strategic complementarities, we derive conditions under which firms choose facets of capital structure that re monotonic in their...

We study the effects of changes in bid-ask spreads on the prices and trading volumes of stocks that move from Nasdaq to the NYSE or Amex, and stocks move from Amex to Nasdaq. When stocks move from Nasdaq to an exchange, their spreads typically decrease, but the reduction in spreads is much...

We provide a framework for evaluating various proposed changes in the NASDAQ market including a reduction of the minimal tick size, the abolition of preferencing, and measures designed to ensure that market makers do not avoid odd-eighth quotes. We do so by explicitly modeling the interaction...

This paper argues that the standard competitive equilibrium result that prices will be driven down to the level of marginal cost cannot be routinely applied to the NASDAQ market without explicitly taking into account the institutional features of this market. We show that price competition among...