Asymmetric-price adjustment is a common phenomenon in many markets around the world, particularly in retail gasoline markets. This paper studies the existence of this phenomenon in the retail gasoline market in the city of Santiago, Chile, using a data set of weekly gas station prices that...

In this paper we consider a market situation in which initially there is an unintegrated monopoly upstream that owns an essential facility and two dowstream firms. Then the market is liberalized allowing upstream entry and vertical integration. The equilibrium entry mode - sharing the incumbent...

The present paper proposes a simple model for studying the interplay between self-enforcing cooperation and network formation. In particular, the model provides an answer to the ancient question of how cooperative behavior emerges in different communities and how the possibility of behaving...

This paper develops a new rationale for the emergence of pay-for-performance contracts. The labor market is competitive, workers are risk averse and firms risk neutral. The paper shows that in stable environments more productive workers self-select into pay-for-performance jobs because risk is...

The conventional intuition suggests that in the absence of synergy, diversification should bring neither gains nor loses, and that gains from diversification should increase with the amount of synergy. That is, as the cash-flow from merging two or more stand-alone firms increase, the value of a...

In this paper we develop a frictionless labor market model in which a firm invests in specific and general training that is neither complement nor substitute to specific training, while the worker invests only in specific training. We use this simple model to show that, contrary to Becker's...

This paper presents a simple model that shows the effects of financial liberalization on the credit market of a small, relatively capital poor economy. The empirical evidence regarding the effect of foreign bank entry is mixed. Some studies show that financial liberalization leads to an increase...

We present a static general equilibrium model of an economy with agents with heterogeneous wealth and endogenous credit constraints created by partial loan recovery rates. Higher loan recovery rates and better bankruptcy protection increase output and credit penetration, while the former raises...

This paper shows that the effects of financial liberalization on the credit market of a small and capital constrained economy depend on the market structure of domestic banks prior to liberalization. Specifically, under perfect competition in the domestic credit market prior to liberalization,...