We consider the optimal pricing and referral strategy of a monopoly that uses a simple consumer communication network (a chain) to spread product information. The first-best policy with fully discriminatory position-based referral fees involves standard monopoly pricing and referral fees that...

In the 1950s and 60s, Japanese and US antitrust authorities occassionally used the degree of concentration to regulate industries. Does regulating firms based on their market shares make theoretical sense? We set up a simple duopoly model with stochastic R&D activities to evaluate market share...

We examine a firm that can license its production technology to a rival when firms are heterogeneous in production costs. We show that a complete technology transfer from one firm to another always increases joint profit under weakly concave demand when at least three firms remain in the...

Housing developments (condos and suburban developments) are not necessarily homogeneous. Developers provide different types of units with various sizes and other characteristics catering to different types of customers. In this paper, we allow local consumption externalities within each...

We consider a public good provision game with voluntary participation. Agents participating in the game provide a public good and pay the fees according to a mechanism (allocation rule), while nonparticipants can free-ride on the participants. We examine how the equilibrium public good provision...

Diamond and Mirrlees (1971) and Dasgupta and Stiglitz (1972) show that production efficiency is achieved under the optimal commodity tax when profit income is zero. Here, we consider the simplest possible model to analyze production efficiency in the presence of profit income: a tax reform...

Markets are often characterized with firms of differing capabilities with more efficient firms licensing their technology to lesser firms.  We  examine the effects that the amount of the technology transferred, and the characteristics of the partner have on this licensing.  We find that a...

It is often argued in the US that HOV (high occupancy vehicle) lanes are wasteful and should be converted to HOT (high occupancy vehicles and toll lanes). In this paper, we construct a simple model of commuters using a highway with multiple lanes, in which commuters are heterogeneous in their...

This paper considers a resource allocation mechanism that utilizes a profit-maximizing auctioneer/matchmaker in the Kelso-Crawford (1982) (many-to-one) assignment problem. We consider general and simple (individualized price) message spaces for firms' reports following Milgrom (2010). We show...

All countries would agree to immediate global free trade if countries were compensated for any terms-of-trade losses with transfers from countries whose terms-of-trade improve, and if customs unions were required to have no effects on non-member countries. Global free trade with transfers is in...