Our analysis is motivated by cases of cigarette smuggling in Canada and in the UK. In the 1990s, domestic cigarettes were legally exported to be subsequently illegally imported. At first, smuggling was done by individual consumers who bought cigarettes abroad and brought them back through...

When a vertically integrated firm competes against non integrated rivals in the input and the final-good markets, the layman's belief is that, when the non-integrated downstream firms purchase part of their input from the up- stream division of the integrated firm, the downstream division will...