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Working Paper
Optimal linear taxation of polluting firms

Working Papers , Paper 92-17

Working Paper
Cournot oligopoly with external costs

Working Papers , Paper 89-17

Working Paper
Oligopoly dynamics with barriers to entry

This paper considers the effects of raising the cost of entry for potential competitors on infinite-horizon Markov- perfect industry dynamics with ongoing demand uncertainty. All entrants serving the model industry incur sunk costs, and exit avoids future fixed costs. We focus on the unique equilibrium with last- in first-out expectations: a firm never exits before a younger rival does. When an industry can support at most two firms, we prove that raising barriers to a second producer?s entry increases the probability that some firm will serve the industry and decreases its long-run entry and ...
Working Paper Series , Paper WP-06-29

Working Paper
Last-in first-out oligopoly dynamics

This paper extends the static analysis of oligopoly structure into an infinite- horizon setting with sunk costs and demand uncertainty. The observation that exit rates decline with firm age motivates the assumption of last-in first- out dynamics: An entrant expects to produce no longer than any incumbent. This selects an essentially unique Markov-perfect equilibrium. With mild restrictions on the demand shocks, a sequence of thresholds describes firms? equilibrium entry and survival decisions. Bresnahan and Reiss?s (1993) empirical analysis of oligopolists? entry and exit assumes that such ...
Working Paper Series , Paper WP-06-28

Working Paper
Oligopoly banking and capital accumulation

We develop a dynamic general equilibrium model of capital accumulation where credit is intermediated by banks operating in a Cournot oligopoly. The number of banks affects capital accumulation through two channels. First, it affects the quantity of credit available to entrepreneurs. Second, it affects banks' decisions to collect costly information about entrepreneurs, and thus determines the efficiency of the credit market. We show that under plausible conditions, the market structure that maximizes the economy's steady-state income per capita is neither a monopoly nor competition, but an ...
Working Paper Series , Paper WP-00-12

Conference Paper
Rival stock price reactions to large BHC acquisition announcements: evidence of linked oligopoly?

Proceedings , Paper 105

On both sides of the quality bias in price indexes

It is often argued that price indexes do not fully capture the quality improvements of new goods in the market. Because of this shortcoming, price indexes are perceived to overestimate the actual price increases that occur. In this paper, I argue that the quality bias in price indexes is just as likely to be upward as it is to be downward. I show how both the sign and the magnitude of the quality bias in the most commonly applied price index methods are determined by the cross-sectional variation of prices per quality unit across the product models sold in the market. ; I do so by simulating ...
Staff Reports , Paper 157

Working Paper
Rival stock price reactions to large BHC acquisition announcements: evidence of linked oligopoly

An examination of whether multimarket contacts among geographically diversified bank holding companies adversely affect competition.
Working Papers (Old Series) , Paper 8605

Discussion Paper
A model of duopoly and meeting or beating competition

Research Papers in Banking and Financial Economics , Paper 87