It is widely recognized that market failure prevents efficient risk sharing in natural-disaster insurance, leading to several public-private partnership arrangements across the globe. We argue that risk selection by the private partner is potentially an important issue. We illustrate our...

The purpose of this paper is to compare the cost efficiency of private and public property insurance providers in Switzerland. The most commonly used measure for this kind of exercise is the claims-premium ratio. We argue that this measure may give strongly biased results. We develop a simple...

This paper provides an explanation why consumers are frequently rationed at certain types of restaurants, bars, cafes, etc. The argument is as follows: The more expensive the restaurant is, the lower will be the consumers' consumption per unit of time spent in the restaurant, Restaurants have a...

The aim of this article is to give a simple theoretical foundation to the fairly common observation that the more profits a firm is currently making, the more it will do to ensure its future profitability.

The development of "general purpose" products means that the needs of quite heterogeneous consumers can be sat isfied with the same homogenous product. The private and social incen tives to produce "general purpose" products are studied in this paper within the "circular-road-model" of...

Excess capacities held by a dominant firm are usually viewed as ant icompetitive because they constitute a barrier to entry. This paper explores an alternative reason for a dominant firm to hold excess capacities: they serve as an assurance to upstream (or downstream) companies that the dominant...