In this paper, we address the incentives to invest in environmental innovation of enterprises that exercise market power in the output market and also buy and sell pollution permits. Differently from the existing literature, using a market approach we explicitly model the interaction between the...

This paper first introduces an approach relying on market games to examine how successive oligopolies do operate between downstream and upstream markets. This approach is then compared with the traditional analysis of oligopolistic interaction in successive markets. The market outcomes resulting...

I consider a two period model with an incumbent firm and a potential entrant each of whom produces a homogeneous good. There is a demand uncertainty: it can be high or low and it realizes in the second period. The question I ask: How by choosing capacity at an earlier period of actual production...

In this paper, we present a model of endogenous vertical integration and horizontal differentiation. There exists two output brands and two versions of the input. The only mean for output differentiation is the input version used in output production. Firms may choose to vertically integrate to...

In this paper we give an example in which the price of tradeable emission permits increases despite firms' adoption of a less polluting technology. This is in contrast with Montero (2002) and Parry (1998), among others. If two Counot players switch to a cleaner technology, the price for permits...

We consider a stage-game where the entrant may simultaneously commit to its product's quality and the level of its production capacity before price competition takes place. We show that capacity limitation is more effective than quality reduction as a way to induce entry accommodation: the...

We show in a simple model of entry with sunk cost, that a regulator prefers limiting the output, or capacity, of the incumbent firm rather than imposing a "Minimum Quality Standard" in order to help the entrant to provide high quality. As a by-product, our analysis makes a contribution to the...

In a model of horizontal product differentiation, we show that local monopolies may exist under free entry when capital is perfectly mobile. In contrast both with the situation of restricted entry and with the zero-profit approach to free entry outcomes of Salop (1979), the unit profit rate of...

We analyze a model of a vertically differentiated duopoly with two regions. These two locations differ for the market size or for the distribution of the willingness to pay for quality of their consumers. Firms sequentially choose to settle in one region and then simultaneously compete in...

In this paper we present a model of credit market with several homogeneous lenders competing to finance an investment project. Contracts are non-exclusive, hence the borrower can accept whatever subset of the offered loans. We use the model to discuss efficiency issues in competitive economies...