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Regular version of the site
Of all publications in the section: 6
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Article
Shimomura K., Thisse J. RAND Journal of Economics. 2012. Vol. 43. No. 2. P. 329-347.

Many industries are made of a few big firms, which are able to manipulate the market outcome, and of a host of small businesses, each of which has a negligible impact on the market. We provide a general equilibrium framework that encapsulates both market structures. Due to the higher toughness of competition, the entry of big firms leads them to sell more through a market expansion effect generated by the shrinking of the monopolistically competitive fringe. Furthermore, social welfare increases with the number of big firms because the pro-competitive effect associated with entry dominates the resulting decrease in product diversity.

Added: Nov 11, 2012
Article
Taub B., Bernhardt D. RAND Journal of Economics. 2015. No. 46. P. 66-85.

We characterize a duopoly buffeted by demand and cost shocks. Firms learn about shocks from common observation, private observation, and noisy price signals. Firms internalize how outputs affect a rival's signal, and hence output. We distinguish how the nature of information -public versus private-and of what firms learn about-common versus private values-affect equilibrium outcomes. Firm outputs weigh private information about private values by more than common values. Thus, prices contain more information about private-value shocks. 

Added: Dec 21, 2015
Article
Janssen M. C., Pichler P., Weidenholzer S. RAND Journal of Economics. 2011. Vol. 42. No. 3. P. 444-470.

This article analyzes a sequential search model where firms face identical but stochastic production costs, the realizations of which are unknown to consumers. We characterize a perfect Bayesian equilibrium satisfying a reservation price property and provide a sufficient condition for such an equilibrium to exist. We show that (i) firms set on average higher prices and make larger profits compared to the scenario where consumers observe production costs, (ii) expected prices and consumer welfare can be non-monotonic in the number of firms, and (iii) the impact of production cost uncertainty vanishes as the number of firms becomes very large.

Added: Sep 4, 2012
Article
Janssen M. C., Pichler P., Weidenholzer S. RAND Journal of Economics. 2011. Vol. 42. No. 3. P. 444-470.

This article analyzes a sequential search model where firms face identical but stochastic production costs, the realizations of which are unknown to consumers. We characterize a perfect Bayesian equilibrium satisfying a reservation price property and provide a sufficient condition for such an equilibrium to exist. We show that (i) firms set on average higher prices and make larger profits compared to the scenario where consumers observe production costs, (ii) expected prices and consumer welfare can be non-monotonic in the number of firms, and (iii) the impact of production cost uncertainty vanishes as the number of firms becomes very large.

Added: Dec 4, 2012
Article
Stepanov S. RAND Journal of Economics. 2010. Vol. 41. No. 2. P. 270-300.
Added: Nov 18, 2013
Article
Stepanov S. RAND Journal of Economics. 2019. Vol. 50. No. 2. P. 453-480.

I model the choice between a negotiated block trade and a public tender offer as means of acquiring control in a firm with a large minority blockholder. Potential acquirers differ in their (privately known) value‐creation ability. In equilibrium, block trades are made by lower ability acquirers compared to tender offers. The equal opportunity rule (EOR) and the “freezeout” rule are complements in promoting efficiency of control transfers. Stronger investor protection may hamper value‐increasing takeovers when the EOR is present. The model also delivers predictions about announcement returns and the incidence of block trades and tender offers under different legal regimes.

Added: Oct 12, 2018