This paper characterizes environmental regulations which induce polluting Bertrand competitors to invest efficiently in environmental R&D. Post-innovation benefits to raising rivals' costs provide firms with incentives to innovate. Although optimal behavior cannot be elicited with pollution...

We study when and how pure non-horizontal mergers, whether cross-product or vertical, can deter new entry. Organizational mergers implicitly commit firms to more aggressive price competition. Because heightened competition deters entry, mergers can occur in equilibrium even when, absent entry...