We analyze the sources of persistent asymmetry between firms and between markets in a given industry. We focus on the case where some exogenous ex ante cost asymmetry can be magnified ex post in terms of cost (capabilities), market shares, prices and profit. Our model - a two-product Cournot...

I develop a model under which workers with different marginal productivities self-select into firms based on the firm's seniority reward policy. I show how this may bias upwards the estimates of returns to seniority in cross-sectional and even some longitudinal studies, when differences in...

Small and medium enterprises have strengthened their importance during the last decades in most industrialized countries, including the United States, Germany, Japan and Canada. The province of Quebec makes no exception as firms of less than 200 employees generate a substantial portion of its...

We model capacity-building investments in a homogeneous product duopoly facing uncertain demand growth. Capacity building is achieved through the addition of production units that are durable and lumpy and whose cost is irreversible. While building their capacity over time, firms compete à la...

The model studies information sharing and the stability of cooperation in cost reducing Research Joint Ventures (RJVs). In a three-stage game-theoretic framework, firms decide on participation in a RJV, information sharing along with R&D expenditures, and output. An important feature of the...

The purpose of this paper is to offer a glimpse into the potential industrial organization of the property casualty insurance (P&C) market if banks continue to penetrate it at current rates. To do so, we study an insurance market where banks are already integral in distribution: Title insurance....

We analyse the effects of a price floor on price wars in the retail market for gasoline. Our theoretical model assumes a Bertrand oligopoly supergame in which firms initially collude by charging the monopolistic price. Once firms detect a deviation from this strategy, they switch to a lower...

We study the interactions between the capital structure and the technological flexibility choices of firms in a duopoly. When there are bankruptcy costs, a leveraged firm may modify its strategic choices in order to decrease its probability of bankruptcy. We show that, when the capacity level of...

A model of location choice by Cournot oligopolists is presented, under the assumption that R&D spillovers depend on the distance between firms. We show that a variety of patterns emerge. Agglomeration is optimal under certain assumptions. Geographical dispersion in a two-dimensional plane is...

We show that whether observing technological choices made by competitors is possible or not has significant impacts on the equilibrium technological configurations. Depending upon the industry characteristics, the strategic value of technological flexibility may be either positive or negative,...