We develop a model of vertical innovation in which firms incur a market entry cost and choose a unique level of quality. Once established, firms compete for market shares, selling to consumers with heterogeneous tastes for quality. The equilibrium of the pricing game exists and is unique within...

The paper aims at empirically investigating the relationship between regulation and the capital structure of the regulated firm, A key aspect of the referred relationship pertains a leverage effect according to which debt could be increased as a response to previous physical capital investment...

We use panel data on 36,104 municipalities in metropolitan France over the period 2010-2014 to estimate two models of entry into local markets by: (i) alternative operators using wholesale access to the legacy copper network via local loop unbundling (LLU), and (ii) the incumbent and two...

While price-fixing cartel prosecutions have received significant attention, the policy determinants and the political preferences that guide such antitrust prosecutions remain understudied. We empirically examine the intertemporal shifts in U.S. antitrust cartel prosecutions during the period...

We study final product manufacturers' incentives to introduce new products into the market and how they are affected by a merger among them. We show that when manufacturers distribute their products through multi-product retailers, a manufacturers merger, although it leads to an increase in the...

We study the impact of barriers to entry on workplace training. Our theoretical model indicates that there are two contrasting effects of deregulation on training. With a given number of firms, deregulation reduces the size of rents per unit of output that firms can reap by training their...

This paper analyzes optimal cross-licensing arrangements between incumbent firms in the presence of potential entrants. The optimal cross-licensing royalty rate trades off incentives to sustain a collusive outcome vis-a-vis incentives to deter entry with the threat of patent litigation. We show...

We explore the incentives of a vertically integrated incumbent firm to license the production technology of its core input to an external firm, transforming the licensee into its input supplier. We find that the incumbent opts for licensing even when licensing also transforms the licensee into...

If an additional competitor reduces output per firm in a homogenous Cournot-oligopoly, market entry will be excessive. Taxes can correct the so-called business stealing externality. We investigate how evading a tax on operating profits affects the excessive entry prediction. Tax evasion raises...

In many countries entrepreneurship is promoted through tax reductions for small businesses and by various government support schemes. We analyze the effects of such policies to subsidize small businesses in a setting where both the risk-return characteristics of the selected innovation project...