The welfare impact of a merger involves the market power offense and the efficiency defense. Salant et al. (1983) show that mergers among symmetric firms are unprofitable except for monopolization. We characterize the limit to this merger paradox in a simple linear Cournot oligopoly with...

In this paper, we raise the following two questions: (1) do Belgian holding companies operate an internal capital market to transfer financial resources in between their subsidiaries? And if yes, (2) is the internal capital market efficient? To answer the first question, we check if the group...

We consider the following stage game: a domestic government chooses an import quota, the a domestic and a foreign firm choose their quality level before engaging a price competition. We first show that the indirect effect of the quota on the sales of the domestic producer are different depending...

Williamson (1979) claims that in a buyer-seller relationship with observable but unverifiable investments and state of nature, the hold up of future benefits leads to underinvestment. Aghion, Dewatripont and Rey (1994) resolve it provided that the initial contract can specify a default option...

We consider the following stage game : A domestic government chooses an import quota, then a domestic and a foreign firm choose their quality level before engaging a price competition in the final stage. We first show that the indirect effect of the quota on the sales of the domestic producer...

We study the efficiency of the equilibrium price in a centralized, order-driven market where many asymmetrically informed traders are active for many periods. We show that asymmetries of information can lead to sub-optimal information revelation with respect to the symmetric case. In particular,...

We consider the two-stage game proposed by Kreps and Scheinkman in the adress model of horizontal differenciation developed by Hotelling. Firms choose capacities in the first stage and then compete in price. We show that capacity precommitment softens price competitio drastically.

This paper proposes a model where employers have two types of prejudices: racial and spatial discrimination. Because of the first one, black workers have less chance than white workers to find a job. Because of the second one, workers living closer to the city-center have less chances than...

Both product differentiation through quality and capacity commitment have been shown to relax price competition. However, they have not been considered simultaneously. To this end we consider a three stage game where firms choose quality then commit to capacity and finally compete in price.

We study the efficiency of the equilibrium price in a centralized, order-driven market where many asymmetrically informed traders are active for many periods.