This paper analyzes the optimal adjustment strategy of an inventory-holding firm facing price- and quantity-adjustment costs in an inflationary environment. The model nests both the original menu-cost model that allows production to be costlessly adjusted, and the later model that includes...

German technology policy has undergone a remarkable change during the last years. The first thing to mention is that technology policy in Germany takes a broader view now, focussing not only on knowledge creation (i.e. the invention process per se) but also on knowledge diffusion and faster...

The paper analyses the infrastructure provision in East Germany mainly by an examination of existing literature. At the time of German unification 1990, infrastructure in East Germany was in a very bad condition. After more than ten years of rebuilding, most of the remaining need for...

The author shows with pooled OLS estimations based on transport margins from international social accounting data that investments in improved road infrastructure have the potential to significantly reduce transport costs. However, this result can only be clearly confirmed for industrial...

The Kiel Canal in Germany connects ports on the Baltic Sea with the rest of the world and is the most-used artificial waterway in the world. Despite this fact, it generates a balance sheet loss. Revenues, which are mainly generated by the transit charge, do not cover its operating expenses. This...

The European Unions's task of providing Trans-European Networks (TENs) in transportation, communications and energy transmission which has been enacted by the treaty of Maastricht, is not confined to internal networks in the EU. Since 1994 this task has been widened so as to give support to the...

We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility gains from price decreases of equal magnitude. Price...

Some path-breaking work on mergers takes efficiency gains for granted, or assumes that firms have perfect knowledge when taking merger decisions. In practice, firms and competition authorities cannot know exact future efficiency gains, prior to merger consummation. This paper analyzes horizontal...

Smallholders often have to certify according to international standards and produce under contract for large agro-businesses to access the export market. While mostly positive effects for the farmers have been found for contracts and certifications, little is known about the role of individual...

This paper addresses the reduction of market failure under imperfect competition. It proposes a taxscheme that provides firms with an incentive to forgo their market power: Firms optimize after-tax profits. Now simply consider a firm´s gross profit margin the unique tax-rate it is charged on...