In this paper, we undertake an in-depth inquiry into the nature of sharing externalities, and study how they affect the market outcome. We show that the key thing for understanding sharing externalities is the interplay between two forces: the specialization/complexity effect, on the one hand,...

Excess capacity is viewed as a distinctive feature and an essential inefficiency of monopolistic competition as the large-group case of imperfect competition. Using a simple geometrical approach and studying the demand and cost curves faced by the individual firm, we find that there is little...

This study investigates the impact of firm-specific discount factors on merger formation and market performance. We estimate firm-specific discount factors for 228 publicly traded and privately held firms operating in the semiconductor market and apply a heterogeneous treatment effects model...

Changes in the extent of multi-market contact (MMC) between firms often affect market outcomes – quantities and prices. We show that a strategic but purely competitive effect of changes in MMC can change the quantity provided in a market by a firm by as much as 50%, and the prices a firm sets...

This study investigates the impact of firm-specific discount factors on merger formation and market performance. We estimate firm-specific discount factors for 228 publicly traded and privately held firms operating in the semiconductor market and apply a heterogeneous treatment effects model...

In this paper, we undertake an in-depth inquiry into the nature of sharing externalities, and study how they affect the market outcome. We show that the key thing for understanding sharing externalities is the interplay between two forces: the specialization/complexity effect, on the one hand,...

This study investigates the role of firm-level discount factors in evaluating the impact of mergers on market outcomes. Discount factors reflect time preferences for future cash flows and are used to determine the present value of investment projects such as mergers. Firm-specific discount...

This article provides a simple account of the effect of quality competition on the extent of sequential entry accommodation for a differentiated oligopoly market characterized by locational differentiation. The model is solved with consumers seeking a “love for quality” surplus utility while...

We investigate the situation where a customer experiencing an inventory stockout at a retailer potentially leaves the firm's market. In classical inventory theory, a unit stockout penalty cost has been used as a surrogate to mimic the economic effect of such a departure; in this study, we...

We develop a two-sector model of monopolistic competition with a differentiated intermediate good and variable elasticity of technological substitution. This setting proves to be well-suited to studying the nature and origins of external increasing returns. We disentangle two sources of scale...