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Previous studies (e.g. by Peltzman and Mathios-Plummer) reveal powerful share‐value effects of Federal Trade Commission (FTC) actions against firms for their advertising. Curiously, however, Mathios‐Plummer finds that when the FTC announces an investigation but simultaneous settlement of the...
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This paper provides a welfare analysis of vertical merger between an input monopolist and downstream firms that compete perfectly in a homogeneous product market. The distinguishing feature of the present model is that the downstream firms face capacity constraints. As a result of downstream...
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