Holmstrom and Milgrom's (1987) relative performance evaluation example has a simple budgeting interpretation. In an attractive manner, this example conveys some of the basic insights of Holmstrom (1982). The model investigated is a principal-manager-agent version of this example in which the...

The paper explains why some firms transfer their technology to competitors without direct compensation. We consider a Hotelling market where duopolists sell products with different qualities. This market consists of heterogeneous consumers, comprising two groups in terms of their valuations of...

We investigate a Cournot model with strategic R&D investments wherein efficient low-cost firms compete against less efficient high-cost firms. We find that an increase in the number of high-cost firms can stimulate R&D by the low-cost firms, while it always reduces R&D by the high-cost firms....

The paper explains why some firms unilaterally share their technology with competitors. We consider a Hotelling market where duopolists sell products with different qualities. This market consists of heterogeneous consumers, comprising three groups in terms of their valuations of product...

We investigate a Cournot model with strategic R&D investments wherein efficient low-cost firms compete against less efficient high-cost firms. We find that an increase in the number of high-cost firms can stimulate R&D by the low-cost firms, while it always reduces R&D by the high-cost firms....

We provide a simple model to investigate decisions about vertical separation. The key feature of this model is that more than one input is required for the final product of the downstream monopolist. We show that as the bargaining powers of independent complementary input suppliers grow larger,...

Theory shows that vertical integration has contrasting two effects, efficiency and foreclosure effects. This study empirically estimates the relative size of these two effects. Unlike previous studies, I focus on a single vertical merger in order to use a panel dataset, and estimate its average...

We provide a theoretical framework to discuss the relation between market size and vertical structure in the railway industry. The framework is based on a simple downstream monopoly model with two input suppliers, labor forces and the rail infrastructure firm. The operation of the downstream...

We provide a simple model to investigate decisions on vertical integration/separation. The key feature of this model is that more than one input is required for the final products of the local downstream monopolists. Depending on their cost structure, downstream firms' decisions on vertical...

We explore why authority within firms helps trading parties immediately settle ex post adaptation problems despite the possibility of a subordinate's disobedience to the orders of his boss. By employing three crucial behavioral assumptions (reference-dependent preference, self-serving bias, and...