This paper considers the relative efficiency of ad valorem and unit taxes in imperfectly competitive markets. We provide a simple proof that ad valorem taxes are welfare-superior to unit taxes in the short run when production costs are identical across firms. The proof covers differentiated...

We analyze the incidence of ad valorem and unit excise taxes in an oligopolistic industry with differentiated products and price-setting (Bertrand) firms. Both taxes may be passed on to consumers by more than 100 percent, and an increase in the tax rate can increase short run firm profits (and...

This paper lays out and elaborates upon the properties of an extended Chamberlinian model with applications both in Industrial Organization and Economic Geography/ Urban Economics. The framework is used to explain the impact of some major changes over the last two centuries: reductions in...

We investigate what can be learned about the prevalence of work disability using self-reported assessments of work capacity. Although health status is widely recognized as a crucial determinant of labor supply behavior and participation in public transfer programs, there is a long-standing...

In a memorable scene from the …lm ”A Beautiful Mind,” John Nash explains to his friends how to direct their attentions to women in a bar. Game theorists who have seen the …lm point out that the proposed solution is not a Nash equilibrium. Here we determine the Nash equilibria to the...

This paper presents a theory of the market provision of broadcasting and uses it to address the nature of market failure in the industry. Advertising levels may be too low or too high, depending on the nuisance cost to viewers, the substitutability of programs, and the expected benefits to...

We derive bounds on the ratios of deadweight loss and consumer surplus to producer surplus under Cournot competition. To do so, we introduce a parameterization of the degree of curvature of market demand using the parallel concepts of ½-concavity and ½-convexity. The ”more concave” is...

We revisit the fundamental issue of market provision of variety associated with Chamberlin, Spence, and Dixit and Stiglitz when firms sell several products. Both products and firms are envisaged as di?erentiated. We propose a nested demand model where consumers decide upon a firm then which...

We analyze the effect of consumer information on firm pricing in a model where consumers search for prices and matches with products. We consider two types of consumers. Uninformed consumers do not know in advance their match values with firms, whereas informed consumers do. Prices are lower the...

We describe firm pricing when consumers search passively and follow simple reservation price rules. In stark contrast to other models in the literature, this approach yields equilib- rium price dispersion in pure strategies even when firms have the same marginal costs. In equilibrium, lower...