On June 1, 1998, President Clinton approved a three-year quota on wheat gluten imports from Australia, the European Union, and all other nonexcluded countries. The quota-remedy will be reviewed for possible extension for up to five additional years. The potential for extensions is an important...

This paper investigates a comprehensive assessment of firm strategic behavior under financial market uncertainty. A general theoretical model of market value maximization (MVM) is constructed using a traditional capital asset pricing format. The model built on the nonlinear Almost Ideal Demand...

The lack of transparency in the pricing and operational activities of state trading enterprises (STEs) has caused members of the World Trade Organization to express concern that certain countries’ STEs might circumvent Uruguay Round commitments on export subsidies, domestic support, or market...

In this paper, a two-period game is constructed, where duopoly firms choose advertising strategies in the first period and compete in price or quantity in the second period by maximizing the value of firm equity. Using certainty equivalence, we demonstrate the impacts of uncertainty and modes of...

Replaced with revised version of paper 08/24/09.

In this paper, we develop a model of strategic delegation in which shareholders maintain an objective of market value maximization (MVM) of the firm's assets as measured by a capital asset pricing model (CAPM). Optimal delegation requires that managers maximize a linear combination of expected...

Understanding how business cartels form and expand is foundational for developing sound deterrence strategies. Past work (i.e. Connor, 2005) has relied on net present value (NPV) methods to evaluate the streams of costs and benefits of forming or joining a cartel. While NPV adequately measure...

A central result in the theoretical literature on strategic trade is the ?rent-shifting hypothesis?, the idea that government?s can employ trade policy as a precommitment device to transfer profit from foreign to domestic firms. To our knowledge, however, the rent-shifting hypothesis remains...