This paper examines the effects of exclusive dealing contracts offered by an incumbent distributor. The effectiveness of exclusive dealing contracts offered by distributors is quite different from those offered by incumbent manufacturers. The traditional literature has focused solely on...

This paper analyzes the effects of bubbles in an in.nitely-lived agent model of endogenous growth with .nancial frictions and heterogeneous agents. We provide a complete characterization on the relationship between .nancial frictions and the existence of bubbles. Our model predicts that if the...

The relation between productivity level and the mode of organi zation remains on unsolved puzzle in international trade theory. As pointed out by Antras and Helpman (2004), while some studies indicate that low productivity firms choose to outsource, other studies have derived results to the...

This paper analyzes a model of coordination where two agents attempt to coordinate their actions through communication. One agent (Sender) is engaged in finding the true state of nature in a stochastic environment and the action that best fits the state. The other agent (Receiver) in turn tries...

The existing literature about exclusive dealing contracts has focused on cases where an incumbent manufacturer o¤ers exclusive contracts to deter an entry. In contrast, we consider the case where an incumbent distributor o¤ers exclusive dealing contracts to deter an entry. Exclusive...

This paper theoretically investigates the relationship between asset price bubbles and bailout. We show that although bailout may mitigate adverse e¤ects of bubbles' bursting ex-post, it is more likely to cause asset price bubbles by encouraging risk-taking behavior ex-ante. In other words,...

The paper examines the impacts of trade and capital movement between North and South, which differ in the quality of financial institution, on the productivity distribution and other characteristics of a financially-dependent industry. We find that financial imperfection causes firm...

This paper explores the relation between the quality of financial institution and asset bubbles. In this paper, we will show that bubbles can improve the macro performance even if the quality of financial institution is very poor and the financial market does not work well. In this sense, the...

This paper examines development processes of a country when the degree of verifiability is endogenously determined. We characterize the development processes rigorously and show that although the efforts for improving of verifiability are important, the income distribution of a country is...

This paper examines the effects of exclusive dealing contracts in a simple model with manufacturers-distributors relations. We consider entrants in both manufacturing and distribution sectors. It is well-known that a potential entry threat is welfare increasing under homogenous price...