This paper examines how the option for licensing affects research and development (R&D) and social welfare. We find that if cost reduction from R&D is sufficiently small and there is an option of licensing, firms will do non-cooperative R&D. In absence of licensing, firms will do cooperative R&D...

Coordination Failure Diagnostics (CFD) is a model that analyses real market processes with the help of time pattern analysis and investigates whether they operate efficiently (See www.wiwi.uni-muenster.de/cfd). The CFD cartel-audit should enable the detection of cartels via characteristic market...

This paper analyzes if vertical foreclosure can emerge as an equilibrium outcome of an infinitely repeated game. Foreclosure is profitable due to a 'raising rival's costs' effect but it is not a Nash equilibrium of the static game. The results are that foreclosure is in fact a subgame perfect...

I study Cournot competition under incomplete information about demand while assuming that market price must be non-negative for all demand realizations. Although this assumption is very natural, it has only rarely been made in the earlier literature. Yet it has important economic consequences:...

We extend Freixas and Rochet (1997) to two-stage game: In the first stage each bank simultaneously decides on amounts of deposits. Then each bank decides on loan amounts in the second stage. Each stage is a Cournot game in quantity. Scope economies between loans and deposits also arise...

We study the strategic choice of compatibility between two initially incompatible network goods in a two-stage game played by an incumbent and an entrant firm. Compatibility may be achieved by means of a converter. We derive a number of results under different assumptions about the nature of the...

In a world with private information about the quality of technology we find that there are situations where relatively more technologically superior firm will license its technology but relatively less technologically superior firm will not license its technology. This finding is opposite to the...

The residential UK electricity market was opened for the first time in 1999, introducing choice of supplier, and about 40% of households changed supplier in the first four years. After three years price caps were removed. We review this process and assess the competitiveness of the market by...

Noncooperative network-formation games in oligopolies analyze optimal connection structures that emerge when linking represent the appropriation of cost-reducing one-way externalities. These models reflect situations where one firm access to another firm’s (public or private) information and...

We show that returns policies do increase manufacturer profitability by attenuating price competition between retailers. This effect holds only in the presence of end-user demand uncertainty. The conditions under which a returns policy raises the manufacturer's profit are weaker when retailing...