Postal reform (liberalization) is occurring rapidly around the world, perhaps most notably in the EU where January 1, 2011 was the date of Full Market Opening (FMO). As a strategy for maintaining the Universal Service Obligation (USO) under FMO, several authors suggest that the sale of access to...

Although traffic safety belongs to the quite intensively regulated sectors, there has been little discussion about the adequacy of the arguments underlying these regulations. We argue that passive and active car safety systems might cause positive externalities for other traffic participants and...

We consider an industry where firms produce goods that have different quality levels but firms cannot differentiate themselves from rivals. In this situation, producing low-quality generates a negative externality on the whole industry. This is particularly true when consumers cannot identify...

This paper constructs an entry and code-sharing alliances game to demonstrate that the alliance between the incumbent carriers may play a significant role of entry deterrence in a given airline network. We show that incumbents can use the alliances as a credible threat to deter the entry of the...

Airports are typically monopolistic providers of aeronautical services. Hence, the widespread privatization of airports within the last 20 years has in general been accompanied by some form of price regulation of aeronautical services. A great deal of attention has been given to the issue of...

This paper explores the role of a minimum quality standard when the quality choice is discrete. A minimum quality standard is never a socially optimal policy under Bertrand and Cournot competition. Conversely, it is often optimal to subsidize or tax the high quality in order to implement...

This paper characterizes the optimal quality regulation of a monopolist when quality is observable. In contrast to Sheshinski (1976) it is shown that a minimum quality standard may be desirable even if it induces the firm to reduce output.

Within the context of natural monopoly regulation, price cap schemes are often combined with price bands in which a maximum percentage by which the price in a market can be raised or lowered is stipulated. In this note, we examine the feasibility of combining average-revenue-lagged and Laspeyres...

A trade embargo is a common way to punish a country. The question I ask is what effect does an embargo have on an imperfectly competitive market? I extend the standard quality duopoly model to show that if the embargo is on the high quality good the quality diminishes and causes an ambiguous...

This paper constructs an entry and code-sharing alliances game to demonstrate that the alliance between the incumbent carriers may play a significant role of entry deterrence in a given airline network. We show that incumbents can use the alliances as a credible threat to deter the entry of the...