Independent rent extraction by competing public officials produces a level of bribery that is too high both from the viewpoint of corrupt administrations and from the viewpoint of social welfare. Nevertheless, governments in many developing countries do not curb the harmful lack of coordination...

Two widely discussed pricing benchmarks in the literature on payment cards markets are the "tourist test" interchange fee (Rochet and Tirole, 2010), which internalizes usage externalities in payment card markets, and "perfect surcharging" by merchants (Rochet and Tirole, 2002). This paper shows...

Two widely discussed pricing benchmarks in the literature on payment card markets are the "tourist test" interchange fee (Rochet and Tirole, forthcoming), which internalizes usage externalities in payment card markets, and "perfect surcharging" by merchants (Rochet and Tirole, 2002). This paper...

This paper characterizes the optimal quality regulation of a monopolist when quality is observable. In contrast to Sheshinski (1976) it is shown that a minimum quality standard may be desirable even if it induces the firm to reduce output.

The two central pricing rules contained in most antitrust laws are prohibitions of below-cost pricing and prohibitions of discriminatory pricing. This article shows that the rule against discriminatory pricing may actually induce firms to charge exclusionary below-cost prices, even in the...

Payment networks typically differentiate interchange fees across different merchant sectors. This paper shows that it is generally efficient for a regulator to leave the decision on the structure of interchange fees to payment networks.

Myopic consumers underestimate the likelihood with which they will require follow-on services for products they purchase. Firms have an incentive to exploit this behavioral bias by skewing their price structure toward high add-on charges. Inadvertently, this skewed price structure provides...

This dissertation contains four independent chapters. Chapter 1 analyzes the impact of vertical integration on quality provision. Chapter 2 seeks to explain the pervasiveness of uncoordinated corruption. Chapter 3 proposes a theory of political agency. Chapter 4 is an inquiry into the...

While the previous literature on exclusive dealing has been concerned with the question of how exclusive dealing can raise static profits, this paper analyzes the question of how exclusive dealing can be used to predate in a dynamic context. It is shown that exclusive dealing may arise even if...

This paper analyzes the impact of vertical integration on product quality. Contrary to previous findings, it is shown that integration decreases quality in many natural situations. In general, the direction of the quality change is governed by three effects that are isolated in the model. This...