Changes in the extent of multi-market contact (MMC) between firms often affect market outcomes – quantities and prices. We show that a strategic but purely competitive effect of changes in MMC can change the quantity provided in a market by a firm by as much as 50%, and the prices a firm sets...

Earlier work characterized pricing with switching costs as a dilemma between a short-term 'harvesting' incentive to increase prices versus a long-term 'investing' incentive to decrease prices. This paper shows that small switching costs may reduce firm profits and provide short-term incentives...

This article investigates downstream firms' ability to collude in a repeated game of competition between supply chains. We show that downstream firms with buyer power can collude more easily in the output market if they also collude on their input supply contracts. More specifically, an implicit...

We estimate a model of drug demand and supply that incorporates insurance, advertising, and competition between branded and generic drugs within and across therapeutic classes. We use data on antiulcer drugs from 1991 to 2010. Our simulations show generics and "me-too" drugs each increased...

We consider a seller s ability to deter potential entrants by offering exclusive contracts to its downstream buyers. Rasmusen, Ramseyer, and Wiley (1991) showed that this can be a pro fitable strategy if there is a coordination failure on the part of the buyers. Segal and Whinston (2000) showed...