This article analyzes the strategic decisions of firms whether to establish and adhere to a cartel when they can also shape competition by investing into production capacity while being subject to unexpected demand shocks with persistence. The model shows that a negative demand shock can...

This article provides a framework for the analysis of cartel formation. It models the strategic interaction among firms who invest into production capacity, sell a near-homogeneous good, and are subject to unexpected demand shocks with persistence. The firms either compete or collude in prices....

This paper analyzes firms' choice between a merger and a strategic alliance in bundling their product with other complementary product. We consider a framework in which firms can improve profits only from product bundling. While mixed bundling is not profitable, pure bundling is because pure...

An important issue in many antitrust lawsuits involving professional sports leagues and their member teams is the extent to which franchises within the same, and across different, professional sports leagues compete with one another for fans and advertisers. Complicating the issue is the fact...

This paper studies two-part tariffs with explicit consideration of cost uncertainty and risk aversion. It finds that firms charge a risk premium over expected marginal cost for each unit they sell. This pricing rule is socially optimal if and only if the modeled market is fully covered in...

Outsourcing decisions by organizations have strategic and operational implications. Strategically, understanding the market and competition is necessary to make effective outsourcing decisions. In this paper we recognize this concern and model the situation where an organization with quality and...

This study examines the competitive price effect of Wal-Mart Supercenters on national brand and private label grocery prices in New England. For this purpose, we use primary price data collected on a basket of identical products from six Supercenters in Massachusetts, Connecticut, and Rhode...

Around the start of this new millennium, scholars in the operations management/operations research field started to make important contributions to the study of price competition models. In this tutorial, we review these contributions, and partition them into five broad areas. Most of the...

The present paper is concerned with providing a core model to address the issue of firms simultaneously competing in both prices and quantities (capacity levels) within a simple duopoly market setting where products are asymmetrically differentiated by endogenous quality location. A three-stage...