Competition in an industry with an upstream natural monopoly infrastructure requires vertical separation. However, this cannot increase welfare unless marginal costs are reduced, given the advantages of vertical integration. It turns out that entry increases marginal costs and has ambiguous...

Recent university reforms tend to mean budget cuts, economic incentives at all levels and a more powerful management, in the spirit of the new public management. Performance-based pay is often motivated through the principal-agent theory where agents would provide inadequate efforts under a...