We formulate an analytic equilibrium model for simultaneously functioning electricity market and a market for Green Certificates. The major focus of the paper is the effect of market power in a Green Certificate system. One of the main results from the analysis is that the certificate system...

This paper examines coordination and profit allocation in a profit-center organization using a single transfer price. The model includes compensations, taxes, and minority interests of two divisions deciding on capacity and sales.The analysis covers arm's length transfer prices which are either...

We examine how executive compensation can be designed to motivate product market collusion. We look at the 2013 decision to close several regional offices of the Department of Justice, which lowered antitrust enforcement for firms located near these closed offices. We argue that this made...

In this paper, we develop a nonlinear programming (NLP) model to jointly determine the optimum financial incentives and price discount levels for each rate class. The model aims at maximizing net revenues. It includes nonlinear relationships representing the impact of incentives on productivity...

Firms that develop user innovations for their own use often find these innovations attractive to their competitors. Thus, the user innovator may consider vertical diversification, turning to manufacturing and selling its own innovation while keeping its original business as a user. The question...