Motivated by the slow diffusion of generic drugs and the increase in prices of brand-name drugs after generic entry, I incorporate consumer learning and consumer heterogeneity into an empirical dynamic oligopoly model. In the model, firms choose prices to maximize their expected total discounted...

This paper shows that, unlike what has been found in other papers, a hydro reservoir is an effective tool to exercise market power. Its appealing as a tool is enhanced by the fact that there is no need to constrain total hydro production - a practice too easy to detect -; it suffices to distort...

We derive a measure of firm speed of price adjustment that is directly inversely related to market power and compare this to the measure derived by Martin (1993). However, both measures are incorrect when firms have price conjectural variations. This is because Taylor expansions of the demand...

This article lays down economic principles that should govern electricity transmission pricing when peak-load pricing is used to set tariffs. Transmission systems perform three different functions: to transport energy, to substitute for generation capacity, and to increase competition in the...

The access pricing problem emerges when a vertically integrated firm (the incumbent) provides an essential service in the upstream market, to an entrant. Both firms produce a final service and compete in the downstream market. The standard treatment of this problem has been to add the access...

Este artículo explora a través de un mismo modelo básico las características fundamentales que determinan si es socialmente preferible concesionar versus privatizar un servicio público con características monopólicas. Los principales resultados de este trabajo son que la opción de...

Pharmaceutical price control has achieved attentions of policy makers in the world. Japanese pharmaceutical market provides a good case study for price control. First, the Japanese pharmaceutical market has been tightly regulated by price control. Second, the difference between the official...

The paper analyzes calling party pays access pricing policies in a General Equilibrium two ways access charge model with consumers that choose between different telecommunication providers, and benefit from making calls to other consumers and from the calls that they receive. We obtain that...

This paper examines firms' incentive to make irreversible investments under an open access policy with stochastically growing demand. Using a simple model, we derive an access-to-bypass equilibrium. Analysis of the equilibrium confirms that the introduction of competition in network industries...

Congress enacted The Americans with Disabilities Act of 1990 over the protests of small business advocates who claimed that the ADA would trigger a wave of bankruptcies. Although the profitability of firms may suffer from the costs of ADA compliance, no systematic evidence is available on the...