Empirical work on price-cost margins often treats costs as exogenous. Allowing for endogenous costs when estimating … third equation, which endogenizes costs. We implement the model using data for eight European airlines from 1976-1994, and … show that the treatment of endogenous costs has important implications for the measurement of price-cost margins and the …

Empirical work on price-cost margins often treats costs as exogenous. Allowing for endogenous costs when estimating … third equation, which endogenizes costs. We implement the model using data for eight European airlines from 1976-1994, and … show that the treatment of endogenous costs has important implications for the measurement of price-cost margins and the …

determines how changes in trade frictions affect allocative efficiency in an oligopoly model of international trade, decomposing …

-industry trade. Our analysis also reveals that, when trade costs and discount factors are not too high, efficient cartel agreements … consequence, for a certain range of discount factors, welfare is higher when there are no trade costs than when trade costs are so … neighborhood of unimpeded (i.e., free) trade. In contrast, reductions in trade costs are welfare-improving when they are high …

difference between any two tariff rates exactly equals 100% of the difference between the foreign firms' marginal costs, the home …