In an industry characterised by secret vertical contracts, we consider a benchmark case where two vertical chains exist, with two upstream manufacturers selling to two downstream retailers, and show that the equilibrium prices are independent of whether upstream or downstream firms have all the...

This paper examines the properties of quality selection when the standard price discrimination rule is modified for redistributive purposes.

A fresh interpretaion is provided of the influential finding that the markup of prices over marginal costs is counter-cyclical. Using Rotemberg and Woodford's data set we argue that the markup is best modelled as a variable that is integrated of order one. A consequence of this finding is that...

We study the enforcement of competition policy against collusion under Leniency Programs, which gave reduced fines to firms revealing information ot the Antitrust Authority. Such programs give firms an incentive to break collusion, but may also have a pro-collusive effect, since they decrease...

Modern theories of inflation incorporate a vertical long-run Phillips curve and are usually estimated using techniques that ignore the non-stationary behaviour of inflation. Consequently, the estimates obtained are imprecise and are unable to distinguish between competing models of inflation and...

This paper tackles the issue of optimum product diversity in an impoerfeclty competitive market with small or large firms. First, it develops a quadratic utility model of monopolistic competition with horizontal product differentiation which avoids some of the main pitfalls of the S-D-S...

This paper considers whether the Euro-area economies have become more competitive since the introduction of the Euro and the implementation of the Lisbon strategy. Using a measure of the markup as a proxy for competition we show that while the markup has varied considerably over the past 25...

We assess the phenomenon of excess volatility in intra-day foreign exchange markets using a market microstructure approach. Introducing different degrees of competition in the forex market and applying different learning mechanisms we are able to give a rationale for traders' use of rather...

Using annual US data for gross domestic product originating by sector between 1947 and 1997 it is shown that a negative long-run relationship between inflation and the markup is present across the sectors as well as in the aggregate. A preliminary explanation based on indutry structure is...

The effect of organizational structure on performance is studied using a project selection framework in which heterogeneous, rational agents can reject or accept projects.