This paper introduces a simple extensive form pricing game where firms can react to each others’ price changes before the customers arrive. The Bertrand outcome is a Nash equilibrium outcome in this game, but it is not necessarily subgame perfect. The subgame perfect equilibrium outcome...

In media markets, products are highly differentiated but prices are often bunched at apparent focal points. I use a comprehensive cross-section data set on the German book market to assess whether such focal points are a result of upstream coordination and whether the option to impose resale...

This paper analyzes the impact of R&D subsidies on incumbent firms to introduce new goods. We are especially interested in investigating various consequences of government subsidies for R&D, provided to firms that o.er products of di.erent qualities. This study examines the incentives of...

Merger activity is intense during economic booms and subdued during recessions. This paper provides a non-financial explanation for this observable pattern. We construct a model in which the target-by setting the takeover price-screens the acquirer on his (expected) ability to realize synergy...

This study shows that preemptive investment in product proliferation is subject to a commitment problem that is not constrained to models of horizontal product di.erentiation, but applies to vertical product di.erentiation settings as well. We investigate the incentives of firms producing high-...

I derive and estimate a model for profit maximization of German magazines. Quarterly data on German women's magazines observed between 1998 and 2001 are used in the econometrics. Main empirical results are that magazines with particularly circulation-sensitive advertising prices set cover prices...

Investments in Generating Capacities between a monopolist and two competing firms are compared where the firms invest in their capacity and fix the retail price while electricity demand is uncertain. A unit price auction determines the wholesale electricity price when the firms compete. They...