Using the coefficient of cooperation, we analyse the effect of cost asymmetries on collusive agreements when firms are able to coordinate on distinct output levels than the unrestricted joint profit maximization outcome. In this context, we first investigate the extent to which collusive...

Standard analysis of mergers in oligopolies along the lines of the popular Farrell-Shapiro Framework (FSF) relies, regarding its policy conclusions, on the assumption that rational agents will only propose privately profitable mergers. If this assumption were held, a positive external effect of...

Antitrust authorities consider commodity bundling as an extension of monopoly power to other markets which harms consumers. This paper analyzes quality competition and its effect on consumer surplus for the case of commodity bundling by a multi-product firm in a vertically differentiated...

This paper examines the effects of obtaining a strategic advantage of becoming the leader in the market on insiders’ incentives to merge and consumer welfare. We show that being the market leader is privately profitable for the merging insiders. We also show that the leading merger would...

Bundled discounts by pairs of otherwise independent firms play an increasingly important role as a strategic tool in several industries. Given that prices of firms competing for the same consumers are strategic complements, one would expect their discounts levels also to be strategic...

We analyze the impact of passive partial ownership (PPO) on horizontal mergers. We show that antitrust authorities ignoring the effects of previous PPO acquisitions invite sneaky takeovers: a PPO is strategically used prior to a full takeover to get a merger approved which is in fact detrimental...

We formally characterize predatory pricing in a modern industry-dynamics framework that endogenizes competitive advantage and industry structure. As an illustrative example we focus on learning-by-doing. To disentangle predatory pricing from mere competition for efficiency on a learning curve we...

When commodity prices rise, wholesalers and retailers of products derived from basic commodities respond by passing along at least a portion of the price increase to consumers. In this paper we examine whether firms respond differently to positive commodity price shocks than to negative...

We analyze how the size of a cartel affects the possibility to sustain a collusive agreement. We develop a multi-period oligopoly model with homogeneous, quantity-setting firms, a subset of which are assumed to collude, while the remaining (fringe) firms choose their output levels...

This paper compares one-part and two-part pricing in a discrete-continuous choice model, providing more extensive welfare results than prior literature. Under two-part pricing, firms may set fixed fees with or without `unit-price commitment,' where the lack of unit-price commitment is consistent...