We challenge the global optimality of one-shot punishments in infinitely repeated games with discounting. Specifically, we show that the stick-and-carrot punishment à la Abreu (1986) may not be globally optimal. We prove our result by investigating tacit collusion in the infinite repetition of...

Within a simple model of differentiated oligopoly, we show that tacit collusion may be prevented by the threat of nationalising a private firm coupled with the appropriate choice of the weight given to private profits in the maximand of the nationalised company. We characterise the properties of...

Asymmetries in cross-price elasticities have been demonstrated by several empirical studies. In this paper we study from a theoretical stance how introducing asymmetry in the substitution effects influences the sustainability of collusion. We characterize the equilibrium of a linear Cournot...

We investigate the possibility for two vertically related firms to at least partially collude on the wholesale price over an in.nite horizon to mitigate or eliminate the e¤ects of double marginalisation, thereby avoiding contracts which might not be enforceable. We characterise alternative...

This paper shows that market concentration is positively related to outsourcing activities in a framework of Cournot competition with strategic outsourcing in a first stage. The theoretical priors are confirmed by rank correlation coefficients between the intermediate goods import intensity and...

We empirically investigate the relevance of multi-homing in two-sided markets. First, we build a micro-founded structural econometric model that encompasses demand for differentiated products and allows for multi-homing on both sides of the market. We then use an original dataset on the Italian...

We investigate the relationship between market concentration and industry innovative effort within a familiar two-stage model of R&D race in which firms compete à la Cournot in the product market. With the help of numerical simulations, we show that such a setting is rich enough to generate...

We model an industry in which a discrete number of firms choose the output of their differentiated products deciding whether or not to consider the impact of their decisions on aggregate output. We show that two threshold numbers of firms exist such that: below the lower one there is a unique...