I reconsider Stiglitz’s (1977) problem of monopolistic insurance with a continuum of types. Using a suitable transformation of control variables I obtain an analytical characterization of the optimal insurance policies. Closed form solutions and comparative statics results for special cases are provided. JEL: D42, D82

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Article history: Received 29 January 2010 Received in revised form 2 December 2011 Accepted 7 December 2011 Available online 13 December 2011

T paper investigates the pricing and restocking fee decisions of two competing firms selling horizontally differentiated products. We model a duopoly facing consumers who have heterogeneous tastes for the products and who must experience a product before knowing how well it matches with their preferences. The analysis yields several key insights. Restocking fees not only can be sustained in a c...

We prove the existence of subsidy free and sustainable pricing schedule in multiproduct contestable markets. We allow firms to discriminate the local markets that are composed by a set of the products line and a set of agents. Results are obtained under an assumption of fair sharing cost and under boundary condition of demand functions. The pricing problem is modelled in terms of equilibrium-co...

We consider a price competition between two sellers of perfect-complement goods. Each seller posts a price for the good it sells, but the demand is determined according to the sum of prices. This is a classic model by Cournot (1838), who showed that in this setting a monopoly that sells both goods is better for the society than two competing sellers. We show that non-trivial pure Nash equilibri...

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...

We model the market for news as a two-sided market where newspapers sell news to readers who value accuracy, and sell space to advertisers who value advert-receptive readers. We show that a monopoly newspaper under-reports or biases news that sufficiently reduces advertiser proÞts, whereas in the duopoly case, newspapers may paradoxically increase accuracy as the size of advertisers grows. We t...

1.1. Example: A Dice-Rolling Problem. In board games like Monopoly, Clue, Parcheesi, and so on, players take turns rolling a pair of dice and then moving tokens on a board according to rules that depend on the dice rolls. The rules of these games are all somewhat complicated, but in most of the games, in most circumstances, the number of spaces a player moves his/her token is the sum of the num...