In a case study of Taiwan's tea industry during the Japanese colonial period, we identify an important function of middlemen: sorting. The transaction cost saved by the intermediary due to sorting is shown to be empirically significant. We also study other services provided by tea middlemen,...

This paper considers a successive oligopoly model in which a vertically-intergrated firm(VI firm) can buy or sell intermediate goods. We find that when there are only a small number of VI firms in the market, they tend to buyor even to store up intermediate goods. In our setting, a vertical...

We consider trade policy in a setting where home country firms are fully dependent on vertically-integrated foreign firms for supplies of a key input. We find that vertically-integrated firms' strategic considerations play an important role and that, in particular, a tariff on final goods may...

The purpose of this paper is to investigate the relationship between income inequality and bequest division rules, an old but untouched topic addressed by Sir Josiah Stamp nearly seventy years ago. We show that the bequest income transition rule for each child should be linearly combined to form...

This paper considers assumptions on consumer heterogeneity that can generate bidirectional distortion in a model of quality discrimination. It is shown that the profit-maximizing strategy can involve the simultaneous degradation of quality at the low end of the spectrum, while quality...

One question development economists are especially interested in, but so far left unanswered, is how the societal income distribution would be affected by introducing a family-planning program to reduce the reproduction rate of the poor, which is usually high in developing countries. The purpose...