In providing rewards to innovators, there is a tradeoff between patent length and breadth. This article provides conditions under which the optimal patent policy involves infinitely-lived patents, with patent breadth adjusting to provide the required reward for innovation.

Whether transmission contracts increase or mitigate market power depends crucially on the allocation of transmission rights. In an efficiently arbitraged uniform-price auction, generators will only obtain contracts that mitigate their market power. Contracts inherited or bought in a "pay-as-bid"...

Consider a duopoly market in which consumers have heterogeneous information about the quality differential q of the two goods. When firms are ignorant about q, consumers rationally believe that a firm with high market shares is likely to produce a high-quality good. As a result, firms try to...

When analyzing a Cournot market with strictly convex costs dependent on a private information parameter, do we err more by ignoring market power or by ignoring the impact of incomplete information? Is the welfare loss at the market outcome driven by private information or by market power? The...

This article analyzes the duality of prices and quantities in a differentiated duopoly. It is shown that if firms can only make two types of binding contracts with consumers, the price contract and the quantity contract, it is a dominant strategy for each firm to choose the quantity (price)...

We analyze the effects of strategic behavior by a large informed trader in a price discovery process used in opening auctions in continuous trading systems. It is found that the large informed trader manipulates the market using a contrarian strategy to neutralize the effect of the trades of...

In this article I propose a monopolistic competition framework to analyze the effects of different disclosure rules used by trade associations on the incentives to share information and on the welfare of consumers, firms, and society. This framework is appropriate whenever a single firm cannot...

This article provides a systematic analysis of the welfare effects of vertical integration by a monopolist input supplier into a monopolistically competitive downstream industry. We give sufficient conditions on consumer preferences that lead to Pareto-improving vertical integration and...