There is a substantial theoretical literature on the potential effects of loyalty contracts, but a relative paucity of empirical work. This Paper employs the event study methodology to examine the effect of exclusionary contracts on firm performance in the ocean shipping industry. Shipping...

We generalize von der Fehr and Harbord's (1993) multi-unit auction model for the case of a deterministic demand allowing for any technology mix and elastic demand in order to account for demand side bidding. We obtain a general characterization of the equilibrium and show that the Cournot model...

The aim of this Paper is to evaluate simultaneously market power and the incentives faced by carriers to improve efficiency, taking into account the regulatory changes that have affected the European airline industry. We construct and estimate a model that includes demand, capacity, and cost...

We model a new effect of exclusivity on non-contractible investments in buyer/seller relationships. By restricting the buyer to purchase from only one seller, exclusivity increases the buyer’s costs of haggling during renegotiation and hence the seller’s relative bargaining power and...

We study the consequences of leniency - reduced legal sanctions for wrongdoers who spontaneously self-report to law enforcers - on sequential, bilateral, illegal transactions such as corruption, manager-auditor collusion, or drug deals. It is known that leniency helps to deter illegal...

A model of harassment bribes (paid for services one is entitled to) is developed and used to analyze the recent proposal to legalize paying bribes while increasing fines on accepting bribes. We explore performance as regards corruption deterrence and public service provision. A modified scheme,...

The paper reviews the recent evolution of leniency programs for cartels in the US and EU, surveys their theoretical economic analyses, and discusses the empirical and experimental evidence available, also looking briefly at related experiences of rewarding whistleblowers in other fields of law...

We consider an empirical model of worldwide airlines’ alliances that we apply to a large set of companies for the period 1995-2000, with special attention to US and EU carriers. From the estimation of a cost, capacity and demand system that accounts for cross-price elasticities, we attempt to...

Collusive agreements and relational contracts are commonly modeled as equilibria of dynamic games with the strategic features of the repeated Prisoner's Dilemma. The pay-offs agents obtain when being ‘cheated upon’ by other agents play no role in these models. We propose a way to take these...