In this paper we set out to investigate the price and quantity fluctuations in Western Denmark, which took place during the winter season 2002-2003. This was a period, which exhibited critical supply conditions in the Nordic area due to a shortage of hydropower. On average, the market in Western...

We analyze the dynamic interaction between imitation and myopic optimization in an environment of changing marginal payoffs. Focusing on finite irreducible environments, we unfold a trade-off between the degree of interaction and the size of environmental shocks. The optimizer outperforms the...

Received literature have shown that if competing networks are restricted to linear and uniform pricing, high access charges can facilitate collusion; a result that breaks down if we allow for non-linear and discriminatory pricing, however. In this paper we add unbalanced calling pattern to the...

This paper analyses the design of hospital reimbursement in an industry with imperfect competition, scarcity of labour and socially costly government transfers. We find that prospective payment not only increases the quantity of hospital care, but also the quality if quality improvements are...

We study a setting where the opportunism or commitment problem identifed by Hart and Tirole (1990) may arise. An upstream monopolist may sell its product to two differentiated downstream retailers. Contract unobservability induces the manufacturer and each retailer to free-ride on margins earned...

This note deals with on-line computatin of learning of Pareto optimal insurance contracts. We account for the fact that the loss distribution often is unknown, unavailable, or intractable. Alternatively, the contracting parties could be inexperienced. In both cases losses must be simulated of...

The supply shock that hit the Nordic electricity market in 2002-2003 put the market to a severe test. A sharp reduction in inflow to hydro reservoirs during the normally wet months of late autumn pushed electricity prices to unprecedented levels. We take this event as the starting point for...

We analyse how the internal organisation of firms affects the correspondence between private and social incentives for horizontal merger. Applying a model of endogenous merger formation in a three-firm asymmetric Cournot industry, we contrast the cases of entrepreneurial and managerial firms....

Cournot-type models of markets in property rights typically feature strategists–acting at a first stage–followed by the move of a non-empty marketclearing competitive fringe. So, which agents can presumably be assigned the price-taking role? When simulating the upcoming medium-sized market...