If an intermediary offers sellers a platform to reach consumers, he may face a hold-up problem: sellers suspect that the intermediary will enter their respective market, competing with them. As sellers fear that they cannot recoup their sunk costs of entry, they do not join the platform. Hence,...

We compare predictions from a theoretical model based on the structure of the main outdoor retail market in Jerusalem with the results of an empirical analysis of price response to changes in cost. We find that firms without adjacent competition exhibit both upward and downward price rigidity,...

In markets with asymmetric information, where equilibria are often inefficient, bargaining can help promote welfare. We design an experiment to examine the impact of competition and price transparency in such settings. Consistent with the theoretical predictions, we find that competition...