According to a familiar script, the EU has, in recent years, been subscribing to a progressive ideal of regulation based on evidence. Given the historical affection of the EU integration process to technocratic modes of governance, this choice is not surprising. Yet, as it emerges from the...

We study insurers’ behavior under monopoly and Cournot duopoly when they canaffect the probability or magnitude of harm from accidents. The way consumers’risk aversion changes with wealth and the way risk affects the slope of the demandfunction determine whether Cournot duopolists increase...

We develop a model of optimal capital structure in imperfectly competitive markets by focusing on a duopoly. The model endogenizes both financing and investment decisions of the firms. We show that in equilibrium the industry leader uses debt conservatively, while the follower uses debt more...

A kind of folk theorem in tax policy states that too much uncertainty about the impact of taxing (or subsidizing) a particular taxable attribute is cause for excluding that attribute from the tax base. I extend the optimal tax model to test this hypothesis. In my model, the government is not...

In a partial equilibrium setting without price uncertainty, the balanced-budget substitution of an ad valorem tax on output for a specific (unit) tax can enhance welfare in imperfectly competitive markets and is without impact in a competitive world. This paper demonstrates that a substitution...

Unternehmen müssen nicht immer Kollusionsabsichten verfolgen, wenn sie untereinander Informationen austauschen. Dieser Beitrag zeigt, daß bei Nachfrageunsicherheit auch strikt kompetitive Konkurrenten private Informationen bezüglich ihrer Nachfragebedingungen preisgeben. Dies läßt sich in...

We analyze strategic relationships between buyers and sellers in markets with switching costs and dynamic uncertainty by investigating the scenario wherein a representative buyer trades with two foreign sellers located in the same foreign country. We show that, under exchange rate uncertainty,...

This paper examines a declining duopoly, where firms must choose when to exit from the market. The exogenous shock in the industry follows an exponential jump-diffusion process. We find Markov-perfect equilibria in firms' exit strategies. With small asymmetry in the firm-specific parameters,...

This paper studies two-part tariffs with explicit consideration of cost uncertainty and risk aversion. It finds that firms charge a risk premium over expected marginal cost for each unit they sell. This pricing rule is socially optimal if and only if the modeled market is fully covered in...