National versus international mergers in unionized
oligopoly.
We analyze how the presence of trade unions affects the pattern of
mergers in an international oligopoly and the welfare implications
thereof. We find that wages for the merger participants are . . .
Aggressive leaders.(strategic investments)
I characterize the incentives to undertake strategic investments in
markets with Nash competition and endogenous entry. Contrary to the case
with an exogenous number of firms, when the investment . . .
Partial cross ownership and tacit collusion.
We examine the effects that passive investments in rival firms have
on the incentives of firms to engage in tacit collusion. In general,
these incentives depend in a complex way on the entire . . .
Partnership dissolution with interdependent values.
We study partnership dissolution when valuations are interdependent
and only one party is informed. In contrast with the case of private
values (Cramton, Gibbons, and Klemperer, 1987), in which . . .
Internal control versus external manipulation: a model of
corporate income tax evasion.
We offer a formal model of corporate income tax evasion. While
individual tax evasion is essentially a portfolio-selection problem,
corporate income tax evasion is much more complicated. When the . . .
Using price distributions to estimate search costs.
We show how the equilibrium restrictions implied by standard search
models can be used to estimate search-cost distributions using price
data alone. We consider both sequential and nonsequential . . .
Best foot forward or best for last in a sequential
auction?
Should a seller with private information sell the best or worst
goods first? Considering the sequential auction of two stochastically
equivalent goods, we find that the seller has an incentive to . . .
Damaged durable goods.(incentives calculations)
I analyze a durable-goods monopolist's incentives to introduce
a damaged good (a stripped-down version of the original good) in an
infinite-horizon framework. The damaged good helps the monopolist . . .
Predation and its rate of return: the sugar industry,
1887-1914.(American Sugar Refining Co.)
We show that the price wars following two major entry episodes were
predatory. Our proof is twofold: by direct comparison of price to
marginal cost, and by construction of a lower bound to . . .
The strategic impact of resource flexibility in business
groups.
We show that in business groups with efficient internal capital
markets, resources may be channelled to either more- or less-profitable
units. Depending on the amount of internal resources, a group . . .
Explaining the distribution of firm growth rates.
Empirical analyses on aggregated datasets have revealed a common
exponential behavior in the shape of the probability density of
corporate growth rates. We present clear-cut evidence on this . . .
Reputational cheap talk.(private information reporting)
We analyze information reporting by a privately informed expert
concerned about being perceived to have accurate information. When the
expert's reputation is updated on the basis of the report as . . .
Incentives, wages, and promotions: theory and evidence.
I study an incentive problem that has been largely ignored in the
agency literature: incentives for repeated (human capital) investment.
The optimal contract is very simple but still provides rich . . .
Designing electricity auctions.
Motivated by the new auction format in the England and Wales
electricity market, as well as the recent debate in California, we
characterize bidding behavior and market outcomes in uniform . . .
Tenure dependence in consumer-firm relationships: an empirical
analysis of consumer departures from automobile insurance firms.
A typical pattern in markets featuring long-term consumer-firm
relationships is for departure probabilities to decline with tenure. A
crucial question is whether this actually implies increasing . . .
Field experiments on the effects of reserve prices in auctions:
more Magic on the Internet.
I present experimental evidence on the effects of minimum bids in
first-price, sealed-bid auctions. The auction experiments manipulated
the minimum bids in a preexisting market on the Internet for . . .
Cooperative investments induced by contract law.
I revisit the economic analysis of contract law for a setting of
cooperative investments. While Che and Chung (1999) have shown that
expectation damages perform rather poorly, I argue that this . . .
Sequential auctions: theory and evidence from the Seattle Fur
Exchange.
We develop a model that incorporates salient features of the
Seattle Fur Exchange: identical lots of furs are auctioned sequentially,
bids must be raised by specified increments, and the winner of . . .
Incentives in internal capital markets: capital constraints,
competition, and investment opportunities.
We examine the effect of competition for scarce corporate financial
resources on managers' incentives to generate profitable investment
opportunities. Operating an active internal capital market . . .
Targeting managerial control: evidence from franchising.
Franchisors simultaneously operate outlets under two distinct
incentive schemes: franchising and company ownership. Using an extensive
panel dataset, we show that experienced franchisors maintain a . . .
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