We construct in this paper a "benchmark" model of fluctuations with optimizing households and firms. The economy is a monetary one, with imperfect competition in goods and labor markets, as well as increasing returns to scale and specialization. This economy is subject to technological and...

Recent human capital theories predict that labor market frictions and product market competition influence firm-sponsored training. Using matched worker-firm data from Dutch manufacturing, our paper empirically assesses the validity of these predictions. We find that a decrease in labor market...

In the theoretical literature, strong arguments have been provided in support of the efficiency defense in antitrust merger policy. One of the most often cited results is due to Williamson (1968) that shows how relatively small reduction in cost could offset the deadweight loss of a large price...

In this paper we propose an example of successive oligopolies where the downstream firms share the same decreasing returns technology of the Cobb-Douglas type. We stress the differences between the conclusions obtained under this assumption and those resulting from the traditional example...

This paper analyses successive markets where the intra-market linkage depends on the technology used to produce the final output. We investigate entry of new firms, when entry obtains by expanding the economy as well as collusive agreements between firms. We highlight the differentiated effects...

In this paper we analyze how the technology used by downstream firms can influence input and output market prices. We show via an example that both these prices increase under a decreasing returns technology while the countrary holds when the technology is constant.

This paper investigates how an incumbent monopolistic can weaken potential rivals or deter entry in the output market by manipulating the access of these rivals in the input market. We analyze two polar cases. In the first one, the input market is assumed to be competitive with the input being...

This paper analyses price competition under product differentiation when goods are defined in a two dimensional characteristic space, and consumers do not know which firm sells which quality. Equilibrium prices consist of two additive terms, which balance consumers’ relative valuation of...

The standard efficient contract involving a monopolistic firm and a union has always been derived under the assumption that the firm operates efficiently, i.e. it uses fully its labor force. However, nothing constrains the firm to do so and production with under-utilization of labor may actually...

The paper derives optimal industrial policy for natural monopoly. It compares the benefit and cost of privatization and regulation taking into account the problems of asymmetric information and of soft budget constraint for regulated firms. It helps to disantangle the notion of 'privatization'...