This paper studies the exertion of market power in large buyer groups confronting an incumbent monopolist and a potential market entrant in a repeated trade situation. In the experiment, buyer power can either occur as demand withholding when only the incumbent is present in the market, or it can take the form of buying at higher prices from the entrant in order to foster future re-entry. Compa...

Under a market setting, we analyse the impact of legal liability on prevention, taking into account the possible limited wealth of ...rms. We show that under strict liability, ...rms may choose ex ante not to be able to fully indemnify victims ex post: whatever the market structure, they may use limited liability strategically by investing in prevention in excess of what is socially optimal. Th...

This paper considers the problem of designing selling procedures for substitutes (like condominium units). I show that oral, ascending auctions for the right to choose are efficient. This is a common type of auction used for the sale of real estate. Efficiency is not optimal from the seller’s viewpoint. An optimal procedure distorts the right-tochoose auction to favor in late rounds bidders who...

Within the EU FP6 Integrated Project WINNER, adaptive transmission is investigated as a key technology for boosting the spectral efficiency of a new radio interface for 4G systems. Adaptive allocation of timefrequency bins in an OFDM-based system offers a significant potential, but also poses challenges. Within work package 2 of WINNER, we study critical issues such as the feasibility of adapti...

This paper challenges the conventional wisdom that exclusive owners of an advanced technology are always better off when producing as a monopolist than when competing against another firm. Competition against a less efficient firm weakens the power that a host country can exert on the incumbent in the form of its tariff policy. We show that this gives a motive for a monopolist to license its te...

An altruistic agent who may aid a person with a low income may cause that person to exert little effort to increase his income. Such behavior generates a Dilemma, in which welfare is lower than when no one is altruistic. We show how governmental transfers, which do not allow for reallocation from a person who saves much to one who saves little, reduces the effect, and can lead to an outcome whi...

With uncertain scope of patent protection and incomplete enforcement, the effective strength of patent protection is determined by the legal system. We analyze how the legal system effects the incentives of firms to innovate, taking into account possibilities of strategic licensing and litigation to deter infringement. The legal regime that induces licensing provides incentives to exert R&D eff...