Slotting fees are fixed charges paid by food manufacturers to retailers for access to the retail market. This note considers this practice in the context of multi-product markets with imperfectly competitive retailers, a monopoly supplier of one good, and competitive suppliers of other goods. We show how the monopolist and the retailers can use bnakedQ slotting fees–charges imposed on the suppl...

I examine the incentives for software providers to design appropriate user interfaces. There are two sorts of costs involved when one uses software: the fixed cost of learning to use a piece of software and the variable cost of operating the software. I show that a monopoly provider of software generally invests the right amount of resources in making the software easy to learn, but too little ...

Image concerns and the provision of quality by Jana Friedrichsen* In this paper, I study markets where consumers are heterogeneous with respect to both their concerns for the quality of goods and the image associated with them. Consumers with a taste for quality lend a positive image to the product of their choice and thereby increase the product's value to others. A monopolist restricts the pr...

The modern state has monopolized the legitimate use of force. This concept is twofold. First, the state is empowered with enforcement rights; second, the rights of the individuals are (partly) restricted. In a simple model of property rights with appropriation and defense activity, we show that a restriction of private enforcement is beneficial for the property owner, even if there are no econo...

We consider a monopoly seller who optimally auctions a single object to a single potential buyer, with a known distribution of valuations. We show that a tight lower bound on the seller’s expected revenue is 1/e times the geometric expectation of the buyer’s valuation, and that this bound is uniquely achieved for the equal revenue distribution. We show also that when the valuation’s expectation...

The issue of technical progress under uncertainty is nested into the debate on vertical integration vs outsourcing, to show that, in general, the former is preferable to the latter in terms of both expected profits and technological efficiency. It is then shown that there exist (i) an optimal two part tariff where the unit price set by the upstream firm is conditional upon its R&D effort, and (...

This paper investigates how the tying of complementary products can be used to both preserve and create monopoly positions, where our focus is on the use of tying to deter the entry of efficient producers. We first show how a firm that is a monopolist of a product in the current period can use tying to preserve its monopoly position in the future. We then show using related arguments how a mono...

This paper deals with a polling game on a graph. Initially, each vertex is colored white or black. At each round, each vertex is colored by the color shared by the majority of vertices in its neighborhood. (All recolorings are done simultaneously). We say that a set W0 of vertices is a dynamic monopoly or dynamo if starting the game with the vertices ofW0 colored white, the entire system is whi...

Considerable attention has focused on US District Court Judge Jackson’s preliminary fact findings about the Microsoft half of the Wintel monopoly. But the November 5, 1999, decision of the US Court of Appeals for the Federal Circuit, exonerating allegedly monopolistic conduct of the Intel half of Wintel-dom, has gone almost unremarked. This month’s Micro Law updates the July-August 1998 Micro L...

This paper solves merger formation problem in Cournot oligopolies by a cooperative and computational approach. In three-firm linear oligopolies, monopoly will be formed (or be stable) if its merging cost is sufficiently low and cost differentials are sufficiently large. When monopoly is unprofitable due to high merging costs, a profitable two-member merger will be formed if its efficient member...