the crisis of intellectual monopoly capitalism the last three decades have witnessed the emergence of a new species of capitalism in spite of marked differences between its national varieties a common characteristic of this species can be found in the global monopolisation of knowledge this monopolisation involves hierarchical relations among firms and between capital and labour because the capital of some firms includes the exclusive ownership of much of the knowledge used in production since the 1994 trade related aspects of intellectual property rights agreements the growing commoditisation of knowledge has extended the role of closed science and closed markets at the expense of open science and open markets the intrinsic long term dynamics of this species of capitalism is increasingly characterised by financialisation inequality and stagnation in order to exit from the current crisis we must change many features of intellectual monopoly capitalism and rely on an eclectic approach that draws insights from liberal keynesian and marxian traditions

tying and innovation a dynamic analysis of tying arrangements this paper analyses the effects of tying arrangements on r d incentives it shows that tying is a means through which a firm can commit to more aggressive r d investment in the tied goods market tying also has the strategic effect of reducing rivals incentives to invest in r d the strategy of tying is a profitable one if the gains via an increased share of dynamic rents in the tied goods market exceed the losses that result from intensified price competition in the market the welfare implications of tying and consequently the appropriate antitrust policy are discussed

nonmonetary effects of financial crises abstract this paper empirically examines the nonmonetary effects of financial crises it exploits the special nature of the great depression in canada to test propositions linking financial structure and aggregate economic activity canada s large domestic debt and shrinking banking system had little impact on the course of the depression in comparison with results for the united states this implicates bank failures as a prime factor in the real effects of financial crises

the crash of the knowledge economy this paper advances the hypothesis that some of the roots of the present crisis are to be found in the present institutions of the knowledge economy while protectionism is seen as a possible dangerous outcome of the crisis the extent of protectionism inherent to the strengthening and globalisation of intellectual property rights iprs associated in particular with the signing of the trade related aspects of intellectual property rights agreement is not generally perceived as one of its possible causes indeed iprs have acted as super tariffs they have particularly raised the cost of investments for countries that had neither abundant cheap labour nor high amounts of intellectual property resources moreover iprs may have later exerted negative effects even on ip rich firms as the proliferation of conflicting rights has led firms to increasingly inhibit each other s investments the resulting investment strike has manifested itself as a saving glut and has mainly affected the usa in a situation aggravated by inadequate regulations if intellectual monopolies are one of the causes of the crash the remedies should not only focus on monetary policy financial regulations or even on standard keynesian policies aggregate demand stimulus should be coupled with policies that decrease the level of intellectual monopolisation of the economy

the role of market forces in assuring contractual performance the conditions under which transactors can use the market repeat purchase mechanism of contract enforcement are examined increased price is shown to be a means of assuring contractual performance a necessary and sufficient condition for performance is the existence of price sufficiently above salvageable production costs so that the nonperforming firm loses a discounted steam of rents on future sales which is greater than the wealth increase from nonperformance this will generally imply a market price greater than the perfectly competitive price and rationalize investments in firm specific assets advertising investments thereby become a positive indicator of likely performance

preemptive r d rent dissipation and the leverage theory this paper provides a new perspective on the validity of the so called leverage theory in a model of preemptive innovation in systems markets i examine the effect of bundling on r d incentives i find that bundling provides a channel through which monopoly slack in one component market can be shifted to another with the effect of mitigating rent dissipation in the systems market bundling can be profitable if this beneficial effect of reduced rent dissipation outweighs the negative effect of intensified price competition after demonstrating the private optimality of bundling its welfare implications are considered finally the results can be reinterpreted to analyze the relationship between compatibility decisions and r d incentives in mix and match models

market motives distinctive capabilities and domestic inertia a hybrid model of innovation generation the authors develop and test a model of innovation in which the generative process of innovation is fostered by a balance of three forces market motives distinctive capabilities and domestic ine

concentration in ownership of plant variety rights some implications for developing countries this paper explores concentration levels in the ownership of intellectual property rights over plant varieties worldwide an analysis of data for 30 upov member countries shows a high degree of concentration in the ownership of plant variety rights for six major crops at the national level in the developed world much of this concentration has arisen owing to the rapid consolidation of the seed industry through mergers and acquisitions especially in the 1990s a high degree of concentration in the ownership of plant variety rights in combination with recent efforts to strengthen plant variety protection regimes is likely to have significant effects on the prospects for future innovation in plant breeding and the distribution of market power between companies for developing countries concentration in intellectual property right ownership may have important implications for the structure of domestic seed industries and access to protected varieties and associated plant breeding technologies these implications for developing countries are likely to become apparent in the context of the rapid spread of plant variety protection and access legislation emerging changes in the international exchange regime for plant material and liberalised investment policies permitting foreign investment in the seeds sector

installed base and compatibility innovation product preannouncements and predation a good is often more valuable to any user the more others use compatible goods the authors show that this effect may inhibit innovation if an installed base exists and transition to a new standard must be gradual early adopters bear a disproportionate share of transient incompatibility costs this can produce excess inertia the installed base however is stranded if the new standard is adopted this may create excess momentum these dynamic effects have strategic implications temporary price cutting can permanently prevent entry and product preannouncements can be critical in innovation these strategic actions have ambiguous welfare effects

tying in two sided markets with multi homing this paper analyzes the effects of tying on market competition and social welfare in two sided markets when economic agents can engage in multi homing by participating in multiple platforms to reap maximal network benefits the model shows that tying induces more consumers to multi home and makes platform specific exclusive content available to more consumers which is beneficial to content providers as a result tying can be welfare enhancing if multi homing is allowed even in cases where its welfare impacts are negative in the absence of multi homing the analysis thus can have important implications for recent antitrust cases in industries where multi homing is prevalent

the role of intangible assets in explaining the investment profit puzzle starting around the early 2000s and especially after the 2008 crisis the rate of capital accumulation for us nonfinancial corporations has slowed down despite relatively high profitability indicating a weakening of the link between profitability and investment while the literature mostly focuses on financialisation and globalisation as the reasons behind this slowdown i suggest adding another layer to these explanations and argue that in conjunction with financialisation and globalisation we need to pay attention to the increased use of intangible assets by nonfinancial corporations in the last two decades intangibles such as brand names trademarks patents and copyrights play a role in the widening of the profit investment gap as the use of these assets enables firms to increase market power and profitability without necessarily generating a corresponding increase in fixed capital investment after discussing the ways nonfinancial corporations use intangible assets i look at large corporations in the usa and find the following i the ratio of intangible assets to the capital stock increased in general this increase is highest for firms in high technology healthcare nondurables and telecommunications ii industries with higher intangible asset ratios have lower investment to profit ratios iii industries with higher intangible asset ratios have higher markups and profitability iv the composition of the nonfinancial corporate sector has changed and the weight of high technology and healthcare firms has increased but this increase did not correspond to an equal increase in their investment share the decline in the investment share of durables nondurables and machinery is matched by an increase in the investment share of location specific industries with low intangible asset use most notably firms in energy extraction in general these firms have steadier markups and higher investment to profit ratios v yet intangible intensive industries profitability has increased faster than their share of investment or total assets all in all these findings are in line with the suggestion that the increased use of intangible assets enables firms to have high profitability without a corresponding increase in investment

price advertising and the deterioration of product quality arguments in favour of self enforced bans on advertising by professionals often rely on the stylized fact that advertising can communicate information about price but not about quality this being the case it is argued that allowing professionals to advertise runs the risk that firms will compete vigorously over price at the expense of the quality of their product this paper shows that even if price can communicate no information directly about quality it can do so indirectly because price will be a signal of quality because of this allowing advertising is shown to improve consumer welfare

bundling as an entry barrier in this paper we look at the case for bundling in an oligopolistic environment we show that bundling is a particularly effective entry deterrent strategy a company that has market power in two goods a and b can by bundling them together make it harder for a rival with only one of these goods to enter the market bundling allows an incumbent to credibly defend both products without having to price low in each the traditional explanation for bundling that economists have given is that it serves as an effective tool of price discrimination by a monopolist although price discrimination provides a reason to bundle the gains are small compared with the gains from the entry deterrent effect i introduction in this paper we look at the case for bundling in an oligopolistic environment we show that bundling is a particularly effective entry deterrent strategy a company that has market power in two goods a and b can by bundling them together make it harder for a rival with only one of these goods to enter the market bundling allows an incumbent to defend both products without having to price low in each while it is still possible to compete by offering a rival bundle a monopolist can significantly lower the potential profits of a one product entrant without having to engage in limit pricing prior to entry we also show that bundling continues to be an effective pricing tool even if entry deterrence fails or if there is already an existing one product rival a company with a monopoly in product a and a duopoly in product b makes higher profits by selling an a b bundle than by selling a and b independently leveraging market power from a into b and accepting some one product competition against the bundle is better than using the monopoly power in good a all by itself since bundling mitigates the impact of competition on the incumbent an entrant can expect the bundling strategy to persist even without any commitment the traditional explanation for bundling that economists have given is that it serves as an effective tool of price discrimination by a monopolist see stigler 1968 adams and yellen

a model of biased intermediation this paper studies situations in which some consumers rely on a potentially biased intermediary to choose among downstream firms we introduce the notion that firms and consumers payoffs can be congruent or conflicting and show that this has important implications for the effects of bias under congruence the firm towards which the intermediary is biased invests more than its rival and consumers can be better off than under no bias under conflict bias hurts consumers and the favored firm charges higher prices we study various oft proposed policies for dealing with a biased intermediary and show that the efficacy of each intervention depends strongly on whether the environment exhibits congruence or conflict we discuss how the model relates to recent issues in online markets

technology distribution and the rate of profit in the us economy understanding the current crisis this paper offers a synoptic account of the state of the debate among marxist scholars regarding the current structural crisis of capitalism identifies two broad streams within the literature dealing in turn with aggregate demand and profitability problems and proceeds to concentrate on an analysis of issues surrounding the profitability problem in two steps first evidence on profitability trends for the non farm non financial corporate business the non financial corporate business and the corporate business sectors in post war usa are summarised a broad range of profit rate measures are covered and data from both the us bureau of economic analysis nipa and fixed assets tables and the federal reserve flow of funds account are used second the underlying drivers of profitability in terms of technology and distribution are investigated the profitability analysis is used to offer some hypotheses about the current structural crisis copyright oxford university press

financialisation and capital accumulation in the non financial corporate sector a theoretical and empirical investigation on the us economy 1973 2003 recent research has explored the growing financialization process in the u s and other advanced economies the term is a catch all phrase used to denote important changes in the structure of non financial corporations balance sheets including the growth of income from financial subsidiaries and investment as well as growth in the transfer of earnings to financial markets in the forms of interest payments dividend payments and stock buybacks this paper seeks to empirically explore the relationship between financialization in the u s economy and real investment at the firm level using data from a sample of non financial corporations from 1973 to 2003 i find a negative relationship between real investment and financialization first increased financial investment and increased financial profit opportunities may have crowded out real investment by changing the incentives of firm managers and directing funds away from real investment second increased payments to the financial markets may have impeded real investment by decreasing available internal funds shortening the planning horizons of the firm management and increasing uncertainty these two channels can help explain the negative relationship i find between investment and financialization

the simple economics of research portfolios this article identifies biases in market portfolios of parallel research projects arising from the noncongruence of social goals and private aspirations occasioned by those circumstances where the market rewards only the winner and where the winner is awarded the entire social surplus it is shown that under risk neutrality this noncongruence implies that t he market encourages the development of too many discoveries too lar ge a spread in the distribution of the quality of discoveries and an excessive occurrence of multiple discoveries copyright 1987 by royal economic society

the demands of finance and the glass ceiling of profit without investment in post keynesian recent works the profit without investment case has made its appearance as a particular accumulation regime one claiming along with two others the contractive and the expansive case that it can account for the different conceivable dynamic patterns at work in financialised capitalism actually profit without investment or rather profit beyond investment is in the very nature of capitalism it is not a special case the dividend channel is an essential component of profit formation we show that its enabling condition and what at the same time limits its width is firms resort to debt beyond a certain point the divorce between dividends and investment is such that firms policies leave their viable domain a domain bounded by their wishes to be self financing past that point any increase in profits runs into a glass ceiling in terms of outlets for those profits it is when the demands of finance i e of shareholders reach this limit that the three regimes identified in the literature make their appearance including the one called profit without investment seen in this light these regimes are therefore all cases of profit without investment ones that take on some reality and some plausibility when finance tries to drag profit without accumulation outside of its viable domain

stability in the absence of deposit insurance the canadian banking system 1890 1966 the canadian banking system experienced a prolonged period of stability prior to the introduction of deposit insurance in 1967 documenting the reasons for this stability provides important evidence in the debate over the impact of mandatory flat rate deposit insurance in this paper we use new archival data to refute recent claims that this stability resulted from an implicit deposit insurance scheme managed by canada s largest banks and guaranteed by the federal government we argue that the canadian banking system was stable for two reasons first the absence of deposit insurance provided incentives for both prudence on the part of management and monitoring by depositors and regulators second the absence of unit banking and other regulatory barriers to competition facilitated efficient mergers which produced a relatively small number of well managed banks copyright 1995 by ohio state university press

innovation rent extraction and integration in systems markets author s farrell joseph katz michael abstract we consider innovation incentives in markets where final goods comprise two strictly complementary components one of which is monopolized we focus on the case in which the complementary component is competitively supplied and in which innovation is important we explore ways in which the monopoly may have incentives to confiscate efficiency rents in the competitive sector thus weakening or destroying incentives for independent innovation we discuss how these problems are affected if the monopolist integrates into the competitive sector

tying compatibility and planned obsolescence according to the hypothesis of planned obsolescence a durable goods monopolist without commitment power has an excessive incentive to introduce new products that make old units obsolete and this reduces its overall profitability in this paper i reconsider the above hypothesis by examining the role of competition in a monopolist s upgrade decision i find that when a system add on is competitively supplied a monopolist chooses to tie the add on to a new system that is only backward compatible even if a commitment of not introducing the new system is available and socially optimal tying facilitates a price squeeze

antitrust and regulation essays in memory of john j mcgowan this collection of original essays by economists and lawyers addresses important aspects of antitrust and regulation such as the u s government s merger guidelines antitrust in regulated industries the connection between profitability and market share and the question of what constitutes anticompetitive behavior the book combines economic and legal analysis to inform policymaking with theory as well as the lessons of experience in the petroleum electric power computer retail food and telecommunications industries antitrust and regulation opens with john mcgowan s previously unpublished background paper mergers for power or progress for the merger guidelines taskforce which recommended the rules adopted by the antitrust division of the justice department in 1982 this is followed by competition and antitrust in the petroleum industry an application of the merger guidelines by george a hay and robert j reynolds anticompetitive mergers prevention and cure by william j kolasky jr philip a proger and roy t englert jr industrial markets another look at the sic approach by james w mckie profitability and market share by morris a adelman and bruce e stangle non price anticompetitive behavior by dominant firms toward the producers of complementary products by j a ordover a o sykes and r d willig market conduct when is it anticompetitive by robin c landis and ronald s rolfe can exclusive franchises be bad by f m fisher mixing regulatory and antitrust policies in the electric power industry the price squeeze and retail market competition by paul l joskow preferences of policy makers for alternative allocations of the broadcast spectrum by forrest nelson and roger noll the financial interest and syndication rules in network television regulatory fantasy and reality by f m fisher and borrowing from peter to pay paul more on departures of price from marginal cost by almarin phillips and gary l roberts

a comparison of industry classification schemes a large sample study in a large sample setting we compare four broadly available industry classification schemes in their effectiveness to group stocks with similar operating characteristics we demonstrate the advantage of the global industry classification scheme to be consistent across different application schemes common to capital market research and across different groups of firms

towards a political theory of the firm abstract the revenues of large companies often rival those of national governments and some companies have annual revenues higher than many national governments among the largest corporations in 2015 some had private security forces that rivaled the best secret services public relations offices that dwarfed a us presidential campaign headquarters more lawyers than the us justice department and enough money to capture through campaign donations lobbying and even explicit bribes a majority of the elected representatives the only powers these large corporations missed were the power to wage war and the legal power of detaining people although their political influence was sufficiently large that many would argue that at least in certain settings large corporations can exercise those powers by proxy yet in economics the commonly prevailing view of the firm ignores all these elements of politics and power we must recognize that large firms have considerable power to influence the rules of the

domestic industrial structure and export quality country of origin may provide a signal of product quality if consumers are on average correct in thei r assessments of product quality from a given country then a lemons effect emerges a firm which pays the full cost of quality improvem ent will receive only diluted benefits in return while competitors gain by free riding the resulting international trade equilibrium i s suboptimal for the exporting country the country may be able to ra ise its welfare by use of export quality standards or by internalizi ng the externality by limiting export licenses or by industrial conso lidation copyright 1988 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

tying foreclosure and exclusion in recent years the leverage theory of tied good sales has faced heavy and influential criticism in an important sense though the models used by its critics are actually incapable of addressing the leverage theory s central concerns here the author reconsiders the leverage hypothesis and argues that tying can indeed serve as a mechanism for leveraging market power the mechanism through which this leverage occurs its profitability and its welfare implications are discussed in detail copyright 1990 by american economic association

competition and the incentive to produce high quality previous literature indicates that when quality is a choice variable firms have an incentive to produce high quality to maintain their reputations with consumers the strategic interaction among firms and competition for market share is not considered this paper finds that when firms compete for market share perfect equilibria in which firms produce high quality goods need not exist competition for customers can eliminate the price premium needed to induce firms to maintain a reputation for high quality production in this case economists and policy analysts should pay greater attention to the interaction among firms and the institutions such as professional associations that structure interfirm relations when considering whether firms have an incentive to produce high quality goods

tying investment and the dynamic leverage theory the idea that an incumbent supplier may tie two complementary products to fend off potential entrants is popular among practitioners yet is not fully understood in formal economic theory this article makes sense of the argument by formally deriving a dynamic version of the old leverage doctrine we show that when an incumbent monopolist faces the threat of entry in all complementary components tying may make the prospects of successful entry less certain discouraging rivals from investing and innovating tie in sales may reduce consumer and total economic welfare copyright 2001 by the rand corporation

coordination commitment and enforcement the case of the merchant guild we interpret historical evidence in light of a repeated game model to conclude that merchant guilds emerged during the late medieval period to allow rulers of trade centers to commit to the security of alien merchants the merchant guild developed the theoretically required attributes secured merchants property rights and evolved in response to crises to extend the range of its effectiveness contributing to the expansion of trade during the late medieval period we elaborate on the relations between our theory and the monopoly theory of merchant guilds and contrast it with repeated game theories that provide no role for formal organization

distorting the direction of technological change abstract this article explores a monopolist s incentive to distort the direction of technological change for strategic reasons the monopolist might invent and employ a socially undesirable technology in so doing he might jeopardize not only the vigor of product market competition but also the development of socially desirable methods of production as a result technological dynamism cannot be considered a social virtue until its direction is compared with the social optimum

r d outsourcing and contractual governance an empirical study of commercial r d projects abstract three complementary models derived from transaction cost economics and property rights theory are constructed to explore the boundary between internal and external r d projects and the governance mechanisms of external r d projects contracted out by private business firms whereas the boundary between external and internal projects is explained with sunk cost potentials the uses of governance mechanisms for external projects in terms of control and property rights are explained with reference to both potential sunk costs technical novelty in the r d work and expected resale value of the final r d outputs the models are empirically tested on 80 projects from the norwegian information technology industry half of which are contracted out to non profit research institutes and half of which are made in house by private manufacturing firms the results support both the boundary hypotheses and three of four control incentive hypotheses the theoretical implications involved in choosing between internal and external r d projects and in designing control and property rights for external projects are discussed

a strategic motivation for commodity bundling the analytical literature on commodity bundling explains the practice of selling two or more differentiated products in a single package as a surrogate for direct price discrimination in contrast this paper shows that imperfect competition creates a strategic incentive to bundle the profitability of bundling whether it adversely affects rival producers and whether it yields an overall efficiency gain depends inter alia on the nature of product market competition the role of complementarity in explaining why firms bundle is also explored copyright 1990 by blackwell publishing ltd

what s behind the rise in profitability in the us in the 1980s and 1990s profitability in the us has been rising since the early 1980s and by 1997 was at its highest level since its post world war ii peak in the mid 1960s and the profit share by one definition at its highest point in this paper i examine the role of the change in the profit share and capital intensity as well as structural change on movements in the rate of profit between 1947 and 1997 its recent recovery is traced to a rise in the profit share in national income a slowdown in capital labour growth at the industry level and employment shifts to relatively labour intensive industries copyright 2003 oxford university press

financialisation and the dynamics of offshoring in the usa imports are linked to higher cost mark ups and firm profits and the gains from such non competitive imports the result of offshoring are increasingly associated with the reinvestment of these higher profits our regression analysis of 35 us manufacturing and service industries over the period 1998 2006 supports aggregate and firm level studies showing that offshoring is associated with a higher share of corporate profit in total value added but the dynamic gains from offshoring have not been fully realised because firms have purchased financial assets especially share buybacks and higher dividend payments to raise shareholder value rather than investing in productive assets that raise productivity growth employment and income despite the corporate sector s contribution to national savings over the past decade the offshoring financialisation linkage reduces the capacity of non financial corporations to act as a driver of the recovery from the economic crisis that emerged in 2008

old school ties financial aid coordination and the governance of higher education abstract this paper analyzes the role of financial aid coordination among the group of top northeastern colleges and universities known as the overlap group members of the overlap group met annually to tailor financial aid packages so that the out of the pocket contribution of parents to their children s education was the same regardless of the school the students chose to attend i argue that the practices and stability of the overlap group are difficult to reconcile with traditional cartel theory and that financial aid coordination was a solution to organizational problems encountered in the education industry particularly to matching and externality problems arising in the allocation of elite students among educational institutions

equilibrium product bundling this article offers an equilibrium theory of product bundling by rival firms in several models where a primary good is produced in a duopoly market and one or more other goods is produced under perfectly competitive conditions bundling is shown to emerge as an equilibrium strategy of one or both of the duopolists for its role as a product differentiation device when the rival firms can commit to bundling sales their profits are higher but social welfare is reduced copyright 1997 by university of chicago press

antitrust innovation and competitiveness the essays in this book explore how the us antitrust laws especially the sherman act have affected the ways in which us corporations can form alliances to compete in world markets the editors start from the premise that current antitrust laws needlessly and unwisely restrain innovation because they inhibit communication and co operation between firms although not all the contributors agree with them about the extent of this effect

unemployment and the real wage the economic basis for contesting political ideologies using the keynesian theory of effective demand this paper demonstrates how particular models such as that of cooperative capitalism enunciated by the left keynesian social democrats the marxian model of profit squeeze emphasizing distributive conflict and even the conservative model relying on supply side stimulus fit in as particular variants of a more general theoretical scheme through a reconstruction of the familiar is schedule the argument is weaved around the theme of the relations between unemployment and real wage in the context of both a closed and an open economy to explain the common macroeconomic basis of contesting ideologies copyright 1990 by oxford university press

financialisation and the slowdown of accumulation over the past decades financial investment of non financial businesses has been rising and accumulation of capital goods has been declining the first part of the paper offers a novel theory to explain this phenomenon financialization the shareholder revolution and the development of a market for corporate control have shifted power to shareholders and thus changed management priorities leading to a reduction in the desired growth rate in the second part the link between accumulation and financialization is tested econometrically by means of a time series analysis of aggregate business investment for usa uk france and germany extensive test of robustness are performed for the first three countries evidence that confirms the negative effect of financialization on accumulation is found author s abstract

competition and product quality in the supermarket industry this article analyzes the effect of competition on a supermarket firm s incentive to provide product quality in the supermarket industry product availability is an important measure of quality using u s consumer price index microdata to track inventory shortfalls i find that stores facing more intense competition have fewer shortfalls competition from walmart the most significant shock to industry market structure in half a century decreased shortfalls among large chains by about a third the risk that customers will switch stores appears to provide competitors with a strong incentive to invest in product quality

upgrades switching costs and the leverage theory of tying this article investigates the role of product upgrades and consumer switching costs in the tying of complementary products previous analyses have found that a monopolist of one product will not increase its profits and reduce social welfare by tying and leveraging its monopoly position into a complementary market if the initial monopolised product is essential where essential means that all uses of the complementary good require the initial monopolised product we show that this is not true in settings characterised by product upgrades and consumer switching costs we also discuss various extensions including the role of the reversibility of tying

multiproduct monopoly commodity bundling and correlation of values through what selling strategy can a multiproduct monopolist maximize his profits when his knowledge about individual consumers preferences is limited one possibility extensively studied in the context of a single good monopoly is to use quantity dependent pricing as a means of discriminating among customers with differing tastes see for example oi 1971 and maskin and riley 1984 an alternative technique for price discrimination first suggested by stigler 1968 and analyzed further by adams and yellen 1976 is for the monopolist to package two or more products in bundles rather than selling them separately through a series of examples adams and yellen illustrate that bundling can serve as a useful price discrimination device even when all consumers willingnesses to pay for each of the goods individually are unaffected by whether they are also consuming the other product a typical example is illustrated in figure i adapted from figure iv in adams and yellen where there are two goods three consumers ab c who consume at most one unit of each good with reservation values for each good that are independent of whether the other good is consumed and zero costs of production there a bundle offered at a price of 100 fully extracts all potential surplus which would be impossible pricing the goods independently unfortunately though these authors do not provide any general characterization of the circumstances in which bundling is actually a multiproduct monopolist s optimal strategy their examples however such as figure i create the impression that the profitable use of bundling

optimal capacity in the banking sector and economic growth the paper investigates from the welfare and growth point of view the determination of the optimal capacity of the banking system for that purpose we consider an overlapping generation model with endogenous growth there is horizontal differentiation and imperfect competition in the banking sector macroeconomic shocks affect the return on capital and together with the expectations of depositors condition the stability of the banking sector we specify to what extent deposit insurance may reduce instability and increase the number of deposits welfare and growth we also characterize the conditions under which excess banking capacities may appear and how their reduction may improve welfare

canadian banking solvency 1922 1940 the use of market value accounting to restate the year end balance sheets for canadian banks strongly suggests that only one surviving bank was economically solvent during the depression like u s s ls the authors alternative hypothesis argues that canadian banks continued to operate because of the canadian government s forebearance policy of providing an implicit 100 percent guarantee of bank deposits standing ready to lend to banks and encouraging early mergers of troubled and healthier banks unlike the stylized fact the role of national branching was to facilitate this policy by reducing the number of banks and lessening competition copyright 1993 by ohio state university press

competition in the us meatpacking industry is it history the us meatpacking industry has become concentrated to a degree not experienced since the days of the beef trust a century ago a number of mainstream studies have investigated if such concentration has been detrimental to competition just as earlier studies may have helped shape competition policy towards meatpacking a century ago contemporary studies have made their way into current discussions and may shape competition policy at the turn of this century this paper asks whether or not contemporary studies are useful in informing competition policy after comparing how competition looks from the econometric vantage point with how it looks from the vantage point of the industry s 300 yr history this article concludes that mainstream studies are more useful for a competition policy targeting conduct rather than structure

the pay of corporate executives and financial professionals as evidence of rents in top 1 percent incomes incomes and wages has now raged for at least two decades in this paper we will make four arguments first the increase in the incomes and we will make four arguments first the increase in the incomes and wages of the top 1 percent over the last three decades should be interpreted wages of the top 1 percent over the last three decades should be interpreted as driven largely by the creation and or redistribution of economic rents and as driven largely by the creation and or redistribution of economic rents and not simply as the outcome of well functioning competitive markets rewarding not simply as the outcome of well functioning competitive markets rewarding skills or productivity based on marginal differences this rise in rents accruing skills or productivity based on marginal differences this rise in rents accruing to the top 1 percent could be the result of increased to the top 1 percent could be the result of increased opportunities for rentfor rent

unproductive accumulation in the usa a new analytical framework in this paper i offer an innovative analysis of unproductive accumulation in the united states economy from 1947 to 2011 i develop a new theoretical and empirical framework to analyze the accumulation of capital in its productive and unproductive forms i also develop a methodology to compute marxist categories predicated on the idea that the production of knowledge and information is an unproductive activity that relies on the creation of knowledge rents in particular i provide new empirical estimates to uncover the shifting balance between productive and unproductive forms of accumulation the accumulation pattern observed during the 1947 1979 phase that prioritized productive accumulation gave way after the 1980s to a contrasting pattern prioritizing unproductive accumulation unproductive activity has been growing at a fast pace in terms of incomes fixed assets and employment among all forms of unproductive activity my approach places special attention on how the production of knowledge and information has constituted a rising share of total unproductive income and capital stock additionally productive stagnation and rapid unproductive accumulation have been related to greater exploitation of productive workers and to widening income inequality