This chapter reviews recent theoretical work on the design of regulatory policy, focusing on the complications that arise when regulated suppliers have better information about the regulated industry than do regulators. The discussion begins by characterizing the optimal regulation of a monopoly...

This is Volume 3 of the Handbook of Industrial Organization series (HIO). Volumes 1 & 2 published simultaneously in 1989 and many of the chapters were widely cited and appeared on graduate reading lists. Since the first volumes published, the field of industrial organization has continued to...

This chapter offers a comprehensive survey of the economic analysis of advertising. A first objective is to organize the literature in a manner that clarifies what is known. A second objective is to clarify how this knowledge has been obtained. The chapter begins with a discussion of the key...

Switching costs and network effects bind customers to vendors if products are incompatible, locking customers or even markets in to early choices. Lock-in hinders customers from changing suppliers in response to (predictable or unpredictable) changes in efficiency, and gives vendors lucrative ex...

This chapter surveys the developments in price discrimination theory as it applies to imperfectly competitive markets. Broad themes and conclusions are discussed in the areas of first-, second- and third-degree price discrimination, pricing under demand uncertainty, bundling and behavior-based...

Recently there has been a notable increase in interest in antitrust law in much of the world. This chapter discusses antitrust policy toward horizontal mergers, the area of antitrust that has seen some of the most dramatic improvements in both economic tools and the application of economics in...