One result of the deregulation of utilities in New Zealand has been the bypass of existing networks. We investigate two cases of bypass in the distribution of natural gas, and compare the welfare properties of regulation vs.\ the `laissez-faire' equilibrium. We demonstrate that installing a...

In this paper, we consider the network as an alternative trading environment to the market. The main distinctive feature of the network transaction is the dependence of buyers' purchasing behavior, which makes all consumers not equally valuable to a seller. We characterize the optimal behavior...

This paper considers the possibility that a seller can contract with one uninformed buyer prior to an auction involving two potential buyers. In a more general setting than previous literature, strategic ex-ante contracts not only extract rent from entrants, but could also mitigate the...

This paper presents a formal model of tunneling and propping in a pyramidal ownership structure. Tunneling refers to controlling shareholders shifting funds from one firm to another in the same pyramid. Propping is tunneling that is done to save the receiving firm from bankruptcy. We compare the...

We study how firm boundaries are affected by the reduction in search costs when business-to-business electronic markets are adopted. Our paper analyzes a multi-tier industry in which upstream parts suppliers incur procurement search costs, and downstream manufacturers incur incentive contracting...

This paper analyzes a mechanism through which product market competition affects allocation of the managerial efforts. There are two types of firms, incumbents and entrants. Each incumbent firm delegates its control to a manager and cannot observe the manager's effort. The managers of incumbent...

This paper studies the effects of product market competition on vertical integration. In a duopoly setting, each retailer is associated with a manufacturer who must decide how to allocate property rights over the retail asset. Choosing delegation of property rights over vertical integration...

External recruitment has often been viewed as a necessary evil in that it trades off the need for outside talents with the incentives of inside workers. This paper, however, shows that even from an incentive viewpoint, external recruitment has its positive role to play. Specifically, if...

In this paper I study how the make-or-buy decision of a firm depends on the organization of its peers. I consider a multi-firm framework in which firms choose whether to integrate into the supply of an intermediate input or to outsource its production, and choose the size of their supplier...

We examine patent pools in the context of a consortium standard. Although such pools of complementary technologies are approved by antitrust authorities, the actual implementation has proved to be problematic. We identify two possible obstacles: free riding and bargaining failure. We also...