The Pigovian rule for the optimal public goods provision with distortionary taxation is given a new interpretation. It relates the Pigovian rule to project evaluation rules in terms of shadow prices. Our formula for the Pigovian rule is compared with that given by existing literature for cases...

This paper considers an incumbent firm that is faced with a potential entrant in a vertically differentiated market. It demonstrates than an incumbent firm cannot prevent entry through product proliferation because of a commitment problem.