This paper studies the emergence of firm asymmetry as an equilibrium outcome. We consider differentiated Cournot and Bertrand duopolies where firms endogenously select their organizational governance and their timing strategy. For Cournot competition asymmetric and symmetric equilibria may...

In the recent decade, global backbone providers have emerged to link dispersed networks. Local networks obtain global connectivity through transit contracts with switching hubs. Using the Shapley value, this paper shows that the bargaining position of the local network depends upon the...

In this paper signals are observed by two receivers who have different preferences about the sender and therefore respond to information about himin different ways. This can result in a Catch-22 for the sender; if he sends a signal to induce a positive response from one receiver, this may induce...

Scope economies (reflecting the benefit of a multioutput firm) have been defined by Baumol, Panzar, and Willig in the context of cost functions. This paperuses Luenberger's shortage function to develop a general measure of scope economies directly from the underlying technology. The analysis...

Although competition law and intellectual property have overlapping economic rationales, they frequently conflict. One area of conflict is vertical leveraging. This paper analyzes recent legislation and court decisions dealing with vertical leveraging. The main conclusion is that two policy...

After discussing some categories and modalities of a designed system change the paper turns to the example of the recent Russian company legislation. The design of two ambitious new company codes for large and small corporations implied a massive transformation of both the underlying economic...

A recent business survey reveals that firms rarely react to corruption, even when they have lost important contracts as a result. Lack of proof was not reported as the most important explanation. This paper explores disinclination to take action in the light of market structures and the...

If a worker's output is observed by the market only when the worker invests in self-promoting activities, then workers overinvest in self-promotion. The efficient contract is one in which firms (i) offer to match outside offers strategically and (ii) guarantee a minimum wage. The model predicts...

This paper analyzes the transformation of banks driven by innovations in financial products and in information technology, the liberalization of financial markets, and changes in bank regulation. A bank faces various strategic choices including its positioning in the life cycle of financial...

Post reunification estimates of East German per capita income were barely one-half the officially reported level. This paper tries to explain this discrepancy and to account for the implied postwar economic divergence between the two Germanies. The statistical discrepancy is attributed to a...