Competition, Markups, and the Gains from International Trade

By Chris Edmond, Virgiliu Midrigan, and Daniel Yi Xu

American Economic Review, October 2015

We study the procompetitive gains from international trade in a quantitative model with endogenously variable markups. We find that trade can significantly reduce markup distortions if two conditions are satisfied: (i) there is extensive misallocation, an...

Exclusive Contracts and Market Dominance

By Giacomo Calzolari and Vincenzo Denicolò

American Economic Review, November 2015

We propose a new theory of exclusive dealing. The theory is based on the assumption that a dominant firm has a competitive advantage over its rivals, and that the buyers' willingness to pay for the product is private information. In this setting, the domi...

On Communication and Collusion

By Yu Awaya and Vijay Krishna

American Economic Review, February 2016

We study the role of communication within a cartel. Our analysis is carried out in Stigler's (1964) model of repeated oligopoly with secret price cuts. Firms observe neither the prices nor the sales of their rivals. For a fixed discount factor, we identif...

Discounts as a Barrier to Entry

By Enrique Ide, Juan-Pablo Montero, and Nicolás Figueroa

American Economic Review, July 2016

To what extent can an incumbent manufacturer use discount contracts to foreclose efficient entry? We show that off-list-price rebates that do not commit buyers to unconditional transfers--like the rebates in EU Commission v. Michelin II, for instance--can...

Sequential Markets, Market Power, and Arbitrage

By Koichiro Ito and Mar Reguant

American Economic Review, July 2016

We develop a framework to characterize strategic behavior in sequential markets under imperfect competition and restricted entry in arbitrage. Our theory predicts that these two elements can generate a systematic price premium. We test the model predictio...

Search Advertising

By Alexandre de Cornière

American Economic Journal: Microeconomics, August 2016

Search engines enable advertisers to target consumers based on the query they have entered. In a framework in which consumers search sequentially after having entered a query, I show that such targeting reduces search costs, improves matches and intensifi...

Either or Both Competition: A "Two-Sided" Theory of Advertising with Overlapping Viewerships

By Attila Ambrus, Emilio Calvano, and Markus Reisinger

American Economic Journal: Microeconomics, August 2016

In media markets, consumers spread their attention to several outlets, increasingly so as consumption migrates online. The traditional framework for competition among media outlets rules out this behavior by assumption. We propose a new model that allows ...

Naked Exclusion with Private Offers

By Jeanine Miklós-Thal and Greg Shaffer

American Economic Journal: Microeconomics, November 2016

We consider a seller's ability to deter potential entrants by offering exclusive contracts to downstream buyers. Previous literature has shown that this can be a profitable strategy if there is a coordination failure on the part of the buyers or if the se...