Issue 1

March 2004

The Determinants of Optimal Interchange Fees in Payment Systems

This paper presents a model of a card payment system as a two-sided market that allows for partial participation by heterogeneous consumers and merchants.

Softening Competition by Inducing Switching in Credit Markets

We show that competing banks relax overall competition by inducing borrowers to switch lenders.

Delegation of Authority In Business Organizations: An Empirical Test

This paper tests the predictions of economic theory on the determinants of the allocation of decision-making power through the estimates of ordered probit models with random effects.

Optimal Regulation of Cooperative R&D Under Incomplete Information

A regulator offers a cooperation contract to two firms to develop a research project. The contract provides incentives to encourage skill-sharing and coordinate subsequent efforts.

Costly Information Disclosure in Oligopoly

We examine the effect of competition on the incentive of firms to disclose quality to consumers before trade when information disclosure is not costless.

Market Power and Joint Dominance in U.K. Brewing

Market power and joint dominance are examined in U.K. brewing.

Competitive balance and gate revenue sharing in team sports

This paper shows that under reasonable conditions, increasing gate revenue sharing among teams in a sports league will produce a more uneven contest, i.e. reduce competitive balance.