We examine the response of Medicare Advantage contracts to published quality ratings. We identify the effect of star ratings on premiums using a regression discontinuity design that exploits plausibly random variation around rating thresholds. We find that 3, 3.5, and 4-star contracts in 2009 significantly increased their 2010 monthly premiums by $20 or more relative to contracts just below the...

Brander and Lewis (AER, 1986) show that ...rms with limited liability can use debt to commit to aggressive behavior in Cournot markets. In our duopoly experiments, we ...nd that subjects choose much less debt than predicted by theory. Although subjects try to exploit the strategic advantage of debt, they do not (want to) acknowledge possible strategic advantages of opponents’ debt. Replacing qu...

We compare the advertising intensity and content of programming in a market with competing media platforms. With pay-tv media platforms have two sources of revenues, advertising revenues and revenues from viewers. With free-to-air media platforms receive all revenues from advertising. We show that if viewers strongly dislike advertising, the advertising intensity is greater under free-to-air te...

It is often argued that multinationals are reluctant to transfer technology due to the fear of spillovers. We show that this need not be the case if host country policies like taxation are taken into account. Furthermore, we examine the incentives the multinational and the host country have to engage in an international joint venture. We show why a multinational may agree to enter a joint ventu...

Consider two sellers each of whom has one unit of an indivisible good and two buyers each of whom is interested in buying one unit. The sellers simultaneously set reserve prices and use second-price auctions as rationing device. An equilibrium in pure strategies where each seller has a regular customer is characterized. The result is applied in order to demonstrate that not allowing sellers to ...

I consider an oligopoly model where, prior to price competition, firms invest in persuasive advertising and induce brand loyalty in consumers who would otherwise buy the cheapest alternative on the market. This setting, in which persuasive advertising is introduced to homogenous product markets, provides an alternative explanation for price dispersion phenomena. Despite ex-ante symmetry, the eq...

What is the appropriate degree of centralization in the context of industrial policy? The basic advantage of centralization results from internalization of external e ects. While most of the literature stresses the superior information of regional authorities as a countervailing force, the present paper discusses another argument in favor of decentralization: Delegation of authority to regional...

In a model of oligopolistic competition in the banking sector, we analyse how the monetary policy rule chosen by the Central Bank can in ̄uence the incentive of banks to set high interest rates on loans over the business cycle. We exploit the basic model to investigate the potential impact of EMU implementation on collusion among banks. In particular, we consider the possible e€ects of the Europ...

A pure Hotelling game is a competition between a finite number of players who select simultaneously a location in order to attract as many consumers as possible. In this paper, we study the case of a general distribution of consumers on a network generated by a metric graph. Because players do not compete on price, the continuum of consumers shop at the closest player’s location. Under regulari...

The paper analyzes spatial Cournot competition among multi-store firms. It demonstrates that the complex problem of determining equilibrium store locations for competing multi-store firms can be approximated by a simple one, in which each firm behaves as a multi-store monopolist in choosing its store locations. A firm’s equilibrium store locations often coincide with its monopoly locations, and...