We model a “new economy” industry where innovation is sequential and monopoly is persistent but the incumbent turns over periodically. In this setting we analyze the effects of “extraction” (e.g., price discrimination that captures greater surplus) and “extension” (conduct that...

We show that, in general, consistent estimates of cost pass-through are not obtained from reduced-form regressions of price on cost. We derive a formal approximation for the bias that arises even under standard orthogonality conditions. We provide guidance on the conditions under which bias may...

Newspaper Joint Operating Agreements (JOAs) are long term, inflexible contracts between metropolitan daily newspapers in the same market. These contracts maintain two editorial voices while combining all business operations of the two competitors in order to capture many of the scale economies...

The critical loss test proposed by Barry Harris and Joseph Simons has become popular in helping define U.S. antitrust markets. The test commonly leads to large, inclusive markets. We show that it is problematic, for several reasons.

This paper examines a moral hazard problem faced by the owners of fleet automobiles. because fleet vehicules are generally not driven by their owners, the drivers of these vehicules do not bear all of the costs of either neglecting or abusing the vehicule.