"We set up a two-sided market framework to model competition between a Prefered Provider Organization (PPO) and a Health Maintenance Organization (HMO). Both health plans compete to attract policyholders on one side and providers on the other. The PPO, which is characterized by a higher...

Using an exhaustive database on academic publications in mathematics, we study the patterns of productivity by world mathematicians over the period 1984-2006. We uncover some surprising facts, such as the absence of age related decline in productivity and the relative symmetry of international...

Speculative industries exploit novel technologies subject to two risks. First, there is uncertainty about the fundamental value of the innovation: is it strong or fragile? Second, it is difficult to monitor managers, which creates moral hazard. Because of moral hazard, managers earn agency rents...

More and more academic journals adopt an open-access policy, by which articles are accessible free of charge, while publication costs are recovered through author fees. We study the consequences of this open access policy on a journal’s quality standard. If the journal’s objective was to...

In this paper, the authors suggest a way in which a monopolistic insurance firm can improve segmentation of its market by conditioning the price of insurance on the quantity of risky assets held by its clients. They derive the optimal linear pricing scheme and show that the firm's profit...

A generalization of J. A. Mirrlees's (1971) income taxation model is formulated in which qualifications of workers are both endogenous and observable by the government. Individuals differ by their unobservable abilities, which simultaneously affect their disutility of labor and their cost of...

The paper offers a roadmap to the current economic thinking concerning interchange fees. After describing the fundamental externalities inherent in payment systems and analysing merchant resistance to interchange fee increases and the associations' determination of this fee, it derives the...

We analyse the demand for hedging and insurance by a firm that faces liquidity risk. The firm's optimal liquidity management policy consists of accumulating reserves up to a threshold and distributing dividends to its shareholders whenever its reserves exceed this threshold. We study how this...

The classical doctrine of the Lender of Last Resort, elaborated by Thornton (1802) and Bagehot (1873), asserts that the Central Bank should lend to ‘illiquid but solvent’ banks under certain conditions. Several authors have argued that this view is now obsolete: when interbank markets are...