We analyse the influence of wage bargaining on the firm´s research incentive. In a duopoly setting, firms invest resources into a Reinganum-type patent race. The wage is bargained for with a union. Besides the holdup and the strategic effect, which have been analysed before, we are able to...

This article adds technology choice to a free-entry Cournot model with linear demand and constant marginal costs. Firms can choose from a discrete set of technologies. This simple framework yields the nonexistence of (pure-strategy) equilibrium and the existence of multiple equilibria and...

Economic theories explaining the existence of stable cartels are still rare. The paper offers a generalization of the D'Aspremont, Jacquemin, Gabszewicz and Weymark [1983] approach of stable cartels in a static "small world" framework taking into account that suppliers may differ with respect to...

Banks play a central role in financing and monitoring firms in transition economies. We study how bank competition affects the efficiency of the credit allocation, the monitoring of firms, and the firms' restructuring effort. In our model, banks compete to finance an investment project with...

A safe and risky seller serve a market. While the expensive safe seller can solve the problems of all consumers, the cheap risky seller can help a consumer only with a certain probability. The risky seller's success probabilities are distributed across consumers; by the choice of her quality the...

The traditional analysis of exclusionary bundling examines the impact of a monopolist bundling product A with another product B, which is competitively provided. Using experimental posted-offer markets, we investigate the exclusionary and welfare implications of having a fringe competitor in the...

This paper proposes relative profits (RP) as a robust measure of competition. I consider nine different parameterizations of competition and show that more intense competition increases the profits of a firm relative to a less efficient firm. Further, popular competition measures like the...

We analyze the welfare effects of mergers in a strategic trade-policy environment. A merger in one country changes the strategic behavior of all firms in the markets, which in turn modifies the strategic interaction between governments in the policy game. Consequently, the results strongly...

We revisit the comparison between Bertrand and Cournot competition in a symmetric differentiated oligopoly where each firm maximizes a weighted average of its own profit and welfare. Under very general specifications, Bertrand competition yields higher prices and profits, and lower quantities,...

Based on a Hotelling-type model, this paper analyzes a differential game where two firms engage in quality-enhancing research and development (R&D). The analysis is formulated in terms of open-loop and feedback solutions. We find that the open-loop stationary levels of R&D and quality are...