Individual moral hazard engendered by health insurance and monopolistic production are both typical phenomena of drug markets. We develop a simple model containing these two elements and evaluate the market equilibrium on the basis of consumer and social welfare. The consumer welfare criterion...

This paper studies revenue-maximizing mechanisms for a monopolist who expects her buyers to resell in a secondary market. We consider two modes of resale: the first is to a third party who does not participate in the primary market; the second is inter-bidders resale, where the winner in the...

This paper investigates the effect of credibility of environmental policies on environmental innovation and welfare. When the government precommits to an emission tax, the monopolist's abatement effort is lower than if the environmental policy is at the government's discretion. Time consistent...

This paper analyzes optimizing decisions of a monopolist under uncertainty. The aspiration model directly accounts for asymmetric risk preferences with respect to downside risk. The optimal output (price) of a risk-averse monopolist facing marginal cost uncertainty will not exceed that of his...