The author considers a market that consists of two competing franchise systems and focuses attention on franchise agreements that specify the payment of the franchisees as a quantity contingent nonlinear price schedule. At the equilibrium, the schedule of wholesale prices reflects both an...

The author's goal is to predict whether horizontal mergers can gene rate informational advantages to firms facing a stochastic market. At the Cournot equilibrium, each nonmerging firm benefits from an informational advantage that exceeds the informational advantage (if it exists) of each merging...