In theory, X-factor regulation provides better incentives for cost reduction than previously widely-used rate-of-return regulation. However, a deeper look into how this factor is effectively estimated shows the regulator enjoys a great deal of discretion, especially when selecting the...

The article analyzes the modern state and trends of the investment resources deficit decision problem in the context food production innovative development in Ukraine. The dynamics and regional characteristics of foreign investment in agriculture and food industry are studied. The basic...

Are labels good or bad for consumers and firms? The answers may seem straightforward since labels improve information, yet economic theory reveals situations where their introduction reduces the welfare of, at least, some market participants. This essay reviews the theoretical literature on...

This paper considers the effects of labels in a vertically differentiated duopoly. A label certifies the level of a product's measurable characteristic. It is shown that the certification label chosen by a private (for profit) certifier is lower than both the socially optimal and the firm's...

Motivated by the unprecedented availability of consumer information on the Internet, we characterize the winners and losers from potential privacy regulation in the context of four commonly-used oligopoly models: a linear city model, a circular city model, a vertical differentiation model, and a...

As the network externality in an industrial organization has been widely discussed in recent years, many researchers in the field have noted a particular type of market, the so-called two-sided market. In a two-sided market, two or more groups of agents such as buyers and sellers interact while...

This paper analyses the economic consequences of labeling in a setting with two vertically related markets. Labeling on the downstream market affects upstream price competition through two effects: a differentiation effect and a ranking effect. The magnitude of these two effects determines who...

Prior studies suggest that, with elastically supplied inputs, free entry may lead to an inefficiently high number of firms in equilibrium. Under input scarcity, however, the welfare loss from free entry is reduced. Further, free entry may increase use of high-quality inputs, as oligopolistic...

In this paper, we study the effects of consumer information on equilibrium market prices and observable product quality in the market for child care. Child care markets offer a unique opportunity to study these effects because of the existence of resource and referral agencies (R&Rs) in some...

We study firms' responses to minimum standards and other forms of regulatory intervention on both the probability of exit and the distribution of observable product quality, using firm level data for a nationally representative sample of markets. Our empirical work is motivated by the literature...