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This paper studies the welfare consequences of a vertical merger that raises rivals' costs when downstream competition is à la Cournot between firms with constant asymmetric marginal costs. The main result is that such a vertical merger can nevertheless improve welfare if it involves a...
Persistent link: https://www.econbiz.de/10001678164
This paper presents a class of finite n x n bimatrix (2-player) games we coin Circulant Games. In Circulant Games, each player's payoff matrix is a circulant matrix, i.e.\ each row vector is rotated one element relative to the preceding row vector. We show that when the payoffs in the first row...
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We study strategic communication between a Sender and Receiver who are both uncertain about their preferred actions. The Sender observes noisy signals about both players' ideal policies and then communicates with the Receiver. Even though Sender and Receiver disagree about ideal policies as a...
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crisis, recent advances in global liquidity regulation try to curb the excessive reliance on short-term wholesale funding … regulation may interfere with the central bank's influence on short-term money market rates. This paper tries to fill the gap in … asymmetric information. Regulation can be welfare-improving in the presence of an externality and also in case of collateral …
Persistent link: https://www.econbiz.de/10010342820
In the recent financial crisis, risk management tools have been proven inadequate. Model risk, a key component of bank risk, has shown its negative impact. It seems that risk models did not cover the included risks comprehensively and were not kept up-to-date by banks, and also rating agencies....
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