It is well-known that switching costs may facilitate monopoly pricing in a market with price competition between two suppliers of a homogenous good, provided the switching cost is above some critical level. With heterogeneous consumers monopoly pricing entails second degree price dierentiotation...

Should the government procure equipment for its agencies or let them run their own procurment auctions? Suppose the agency has private information about product quality, but is inclined to favour local suppliers. Decentralization saves bureaucracy and "agency costs", but leads to biased...

Regulated firms are not necessarily willing to invest in cost minimizing technologies, but evaluate different technologies according to their impact on the information rent. In a two-type adverse selection model three kinds of investments are considered: investments that increase the probability...

A unified method to detect and handle innovational and additive outliers, and permanent and transient level changes has been presented by R.S. Tsay, N.S. Balke has found that the presence of level changes may lead to misidentification and loss of test-power, and suggests augmenting Tsay's...

A common Nordic power market will reduce total CO2 emissions in the Nordic countries as compared to a situation of autarky and, thus, reduce the aggregate cost of complying to strict national CO2 emission targets. A common market for CO2 emissions permits may reduce the aggregate cost further,...

We formulate a econometric framework for studying treatment effects on discrete outcomes when the treatment effects are heterogeneous and the unobserved heterogeneity is given by a factor structure. Within this framework, we show how to define and semiparametrically estimate the average...

We apply the stochastic evolutionary approach of equilibrium selection to macroeconomic models in which a complementarity at the macro level is present. These models often exhibit multile Pareto-ranked Nash equilibria , and the best response-correspondence of an individual increases with a...

We consider repeated interaction among several producers of a homogeneous, divisible good, traded at a common market. Demand is uncertain, and its law is unknown.

We consider transfers in a Stackelberg game of private provision of a public good. It turns out that the agent who is the follower in the process of making voluntary contributions to a public good may have an incentive to make monetary transfers to the Stackelberg leader even in a situation...

We examine how a merger affects wages of unionized labour and, in turn, the profitability of a merger under both Cournot and Bertrand competition. If unions are plant-specific, we find that a merger is more profitable than in a corresponding model with exogenous wages. In contrast to the...