We investigate how various institutional settings affect a network provider’s incentives to invest in infrastructure quality. Under reasonable assumptions on demand, investment incentives turn out to be smaller under vertical separation than under vertical integration, though we also provide...

In 1997, France Telecom, the state-owned French telephone company, went through a partial privatization. We adapt a standard neoclassical model to predict how employees might respond to the firm's offer to sell them various classes of shares. Using a database that tracks over 200,000 eligible...