We develop a theoretical model of long-run investment decisions on capacity in the context of a liberalized electricity … the level of capacity that maximizes social welfare, and compare it to a decentralized outcome. We show that in the … absence of any regulation, private investment decisions on capacity unambiguously lead to a socially sub-optimal outcome, and …

We Embed an Efficiency Wage View of the Labor Market a la Shapiro and Stiglitz (1984) Into the Standard Hecksher …

We consider a market with three competitors, two of which decide to cooperate. Firms first choose capacity under demand … where two airlines jointly choose capacity and divide it among themselves. Contrary to the full merger case, after demand is … revealed the alliance members market their capacity shares independently. Our main result is that the profit of the cooperating …

a model in which facilities can produce output at a privately known cost up to a previously-determined capacity level …. In such a model, the amount of slack in the firm is shown to be pro-cyclical. Indeed, as capacity constraints become … capacity. …