This paper studies the two royalty structures: Sales-based Royalty (SBR) and Margin-based Royalty (MBR). From the standpoint of a franchisor, if it is necessary for a franchisee to engage in a marketing activity, the SBR grants a more high-powered incentive scheme to the franchisee than the MBR...

This paper develops a model of international trade where firms are heterogeneous across capacity and productivity. A binding capacity constraint induces firms to raise prices in order to take advantage of access to new markets. This generates markets with a flexible competitive structure giving...

This paper analyzes the welfare implications of information aggregation in a security-trading model where traders have both idiosyncratic endowment risk and asymmetric information about security payoffs. In the model a large market can be welfare-reducing --- i.e., the optimal market size is...

The relationship between the size of a market and the competitiveness of the market has been of long-standing interest to IO economists. Empirical studies have used the relationship between the size of the geographic market and both the number of firms in the market and the average sales of the...

This paper empirically characterizes competitive behavior among charitable nonprofits where prices and output are difficult to observe. Using a model tailored to donative nonprofits and an empirical methodology that exploits cross-sectional variation in market size and various measurable...