Here we Þrst summarize the explicit solutions to our pricing-capacity and quantity-capacity models for both the monopoly and duopoly when uncertainty is uniformly distributed. Then follow the proofs and other technical extensions. (For clarity, we use the subscript M for monopoly and D for duopoly, as needed.) The main paper appeared in Management Science Vol. 45, No. 12, December 1999 pp. 1631...

This paper focuses on the role that production subsidies play in a Bertrand mixed duopoly. The paper examines four regimes: mixed and private duopoly, each with and without subsidies. The results of this study are compared with the findings of the existing Cournot mixed market literature. As a result, the paper shows that that the introduction of production subsidies into the analyses of Bertra...

We investigate the impact of advertising in a simple static differentiated duopoly model. In order to do that, we compare the situation where the firms compete with two strategic variables – i.e. the prices and the advertising expenditures – with the situation where the firms only compete in prices and do not advertise at all. We characterize in terms of the model parameters the circumstances i...

This paper analyzes a dynamic mixed duopoly in which a profit-maximizing competitor interacts with a competitor that prices at zero (or marginal cost), with the cumulation of output affecting their relative positions over time. The modeling effort is motivated by interactions between Linux, an open-source operating system, and Microsoft’s Windows in the computer server segment, and consequently...

We develop a reduced-form model of price transmission in a vertical sector, allowing for refined asymmetric, contemporaneous and lagged, own and cross price effects under time-varying volatility. The model is used to investigate wholesale-retail price dynamics in the US butter market. The analysis documents the nature of nonlinear price dynamics in a vertical sector, with implications for price...

Oligopoly price discrimination in the retail market prevents a manufacturer from inducing optimal retail margins through any wholesale price. This motivates the manufacturer to impose resale price maintenance. In a model of third-degree price discrimination by rival retailers, a retail price ceiling (or floor) enables the manufacturer to restore the first best. Imposing a fixed retail price is ...

This paper uses annual data from 1980-1998 to test two models of the relationship between wholesale and retail marijuana prices. Results from regressions of retail prices on wholesale prices reject a multiplicative model, in which the difference in prices between levels is proportional to the wholesale price, in favor of an additive model, in which the price difference is a fixed amount. This f...

This paper studies business hour decisions by retail chains and corner shops in a spatial retail market. We use a Salop-type model where retailers compete in prices and shopping hours. Assuming equally efficient firms, we find that the corner shop chooses no shorter business hours than a retail chain, but potentially longer ones. Additionally, we find that the firms have different stands toward...