Working Papers

The paper shows that the answer is no. Holmstrom (1979) and Shavell (1979) show that the sellthe firm contract does not achieve the first best when the principal and the agent have different

This paper introduces means of quantifying global trend of proliferation in antitrust laws, and introduces measures to assess the presence of such laws across a large set of countries. In particular

This paper examines the output and profit effects of horizontal mergers between upstream firms in intermediate goods markets. We consider market settings in which the upstream firms sell

The off-net-cost pricing principle argues that under a broad range of environments a positive “access” charge paid by originating networks to interconnected terminating networks would cause networks

PUBLISHED AS: Avoiding Aggregation Bias in Demand Estimation: A Multivariate Promotional Disaggregation Approach

Estimating cross-brand promotional effects with aggregate data requires knowledge of the

Zone pricing in wholesale gasoline markets is a contentious topic in the public policy debate. Refiners contend that they use zone pricing to be competitive with local rivals. Critics claim that zone

PUBLISHED AS: Estimating the Cost of New Drug Development: Is it really $802m?

This paper analyses a detailed data set on drugs in human clinical trials around the world between 1989 and 2002. The data

Across many forms of rent seeking contests, the impact of risk aversion on equilibrium play is indeterminate. We design an experiment to compare individuals’ decisions across three contests which are

PUBLISHED AS: The Loss Leader Is a Turkey: Targeted Discounts from Multi-product Competitors

When some customers are more profitable to serve than others, one might expect sellers to compete more

Is the second best outcome of static agency models renegotiation proof? In models with one period of renegotiation, Fudenberg and Tirole (1990) answer no when the principal makes the offer, while Ma

PUBLISHED AS: Market and Non-Market Barriers to Internet Wine Sales: The Case of Virginia

This study investigates the effects of the Commonwealth of Virginia’s ban on direct wine shipments from out-of

This paper analyzes the value of using data from on-line auctions to determine product market definitions and competitive effects of mergers. Traditionally this type of demand analysis has been based on

A well-known theory (Lazear, 1979) argues that wage patterns in which younger workers are underpaid relative to marginal revenue product and older workers are overpaid relative to marginal revenue

A basic tenet of incentive theory states that there is a trade-off between risk and incentives. By implication, greater variation in firm profits leads to a reduction in the use of profit sharing

Critical loss analysis is often used to argue that firms with large margins have more to lose from a reduction in sales and hence are less likely to increase prices. This argument ignores the fact

Our objective is to determine the effect of ownership type (for-profit, not-for-profit, government) on firm conduct in hospital markets. Secondary objectives include estimating hospital demand systems

The paper empirically analyzes the economic theory and intuition that the "free rider" problem will overwhelm firm-wide incentives in large firms. Kandel and Lazear (1992) claim that in a simple model

With competition in telecommunications markets a carrier relies on competing networks to complete inter-network calls originated by its customers. Regulators typically require the calling party’s

Intellectual property protection affects the manner in which multinational enterprises facilitate technology transfer from the innovating North to the developing South. Firms with products that are

This working paper presents the findings of research on the relationship between price and quality in consumer service industries in the Washington, D.C. area. The study relies primarily upon consumer