This paper studies the welfare effects of third-degree price discrimination under oligopolistic competition with horizontal product differentiation. We derive a necessary and sufficient condition for price discrimination to improve social welfare: the degree of substitution must be sufficiently...

The arm's length principle states that the transfer price between two associated enterprises should be the price that would be paid for similar goods in similar circumstances by unrelated parties dealing at arm's length with each other. This paper examines the effect of the arm's length...

The arm’s length principle states that the transfer price between two associated enterprises should be the price that would be paid for similar goods in similar circumstances by unrelated parties dealing at arm’s length with each other. This paper examines the effect of the arm’s length...

When upstream firms compete in quantity and freely enter the input market, competition among downstream firms reduces the input price (the marginal cost of downstream firms). The industry profits of downstream firms competing in quantity can increase with the number of downstream firms.

The arm's length principle states that the transfer price between two associated enterprises should be the price that would be paid for similar goods in similar circumstances by unrelated parties dealing at arm's length with each other. This paper examines the effect of the arm's length...

This paper presents the development of an equilibrium theory of vertical merger that incorporates strategic behaviors in the Hotelling-type location model for the purpose of considering the relationship between the strategies of downstream firms for product differentiation and vertical...

Friedman and Thisse (RAND Journal of Economics, 1993) show that spatial agglomeration appears in a standard two-stage location price model if the symmetric firms can collude in prices. We introduce a cost difference between two firms. We show that agglomeration never appears in a collusive...

Should civil servants (employees in the public sector) be allowed to bargain collectively? To answer this question, we construct a model of unionized mixed duopoly and examine the regulatory framework of public institutions, especially focusing on a wage regulation imposed on the public firm....

This paper discusses competition between high-quality private service providers that maximize their own profits and a low-quality public service provider that maximizes social surplus. There are two heterogeneous consumer groups: those who demand only high-quality services and those who care...