This paper investigates whether the efficiency effect of product market dispersion is a function of the infrastructural and policy environment. We hypothesize that more developed transportation and communication infrastructure and lower government regulation may reduce transaction costs, intensifying the competition associated with a given market structure, and we use data from the recently lib...

Improving a company’s bargaining position is often cited as a chief motivation to vertically integrate with suppliers. This paper expands on that view in building a new theory of vertical integration. In my model firms integrate to gain bargaining power against other suppliers in the production process. The cost of integration is a loss of flexibility in choosing the most suitable suppliers for...

We analyze models of product differentiation with perfect price discrimination and free entry. Although perfect price discrimination ensures efficient output decisions given product characteristics, coordination failures may prevent efficiency in the choice of product characteristics. More fundamentally, even if we have efficient product choices for a fixed number of firms, one always has exces...

We study the choice that a firm makes between an employment mode, in which the firm controls service provision by employing professionals, sales representatives, or other types of agents, and an agency mode, in which the firm enables agents to provide their services on terms that they control. The choice of mode is determined by the need to balance double-sided moral hazard problems arising fro...

In an increasing number of industries, firms choose how much control to give professionals over the provision of their services to clients. We study the tradeoffs that arise in choosing between a traditional mode (where the firm takes control of service provision) and a platform mode (where professionals retain control over service provision). The choice of mode is determined by the need to bal...

This paper studies the estimation of quantile regression panel duration models. We allow for the possibility of endogenous covariates and correlated individual effects in the quantile regression models. We propose a quantile regression approach for panel duration models under conditionally independent censoring. The procedure involves minimizing l1 convex objective functions and is motivated by...

Many multi-product firms incur a complexity fixed cost when offering different product lines in different quality tiers relative to the case when offering all products lines in the same quality tier (high or low). Such fixed costs create an interdependency between firms’choices of quality tiers across different product lines, even when demands are independent. We investigate the effects of this...

Endogenous timing can help to derive the time structure of decision making instead of assuming it as exogenously given. In our study we consider a homogeneous market where, like in the model of Kreps and Scheinkman (1983), sellers determine “sales capacities” before prices. Sellers must serve customers, but at higher costs when demand exceeds “capacitiy”. Our model allows for preemption in “cap...

This paper introduces an alternative to the lobbying literature’s standard assumption that “money buys policies”. Our model – in which influence-seeking requires both money to “buy access” and managerial time to “utilize access” — offers three significant benefits. First, it counters criticism that the “money-buys-policies” assumption is at odds with reality. Second, its much stronger lobbying ...

A Hall type model that includes intermediate materials in the production function and allows for non-stochastic time variation in the contribution of technical change to output growth is used to estimate markup and returns to scale for eight Australian manufacturing industries at approximately the two-digit level, during the period 197172 to 1984-85. Six of the eight manufacturing industries in...