Previous papers by Eric B. Rasmusen, J. Mark Ramseyer, and John S. Wiley, Jr. (1991) and Ilya R. Segal and Michael D. Whinston (2000) argue that exclusive contracts can inefficiently deter entry in the presence of scale economies and multiple buyers. We first show that these results no longer hold when buyers are final consumers who can breach these contracts and pay expectation damages. We then show, however, that exclusive contracts can inefficiently deter entry if buyers are downstream competitors, even in the absence of scale economies and even if breach is possible. (JEL D86, K21, L11 , L13, L14, L40)

Highly pathogenic avian influenza (HPAI) is often controlled through culling of poultry. Compensating farmers for culled chickens or ducks facilitates effective culling and control of HPAI. However, ensuing price shifts can create incentives that alter the disease dynamics of HPAI. Farmers control certain aspects of the dynamics by setting a farm size, implementing infection control measures, and determining the age at which poultry are sent to market. Their decisions can be influenced by the market price of poultry which can, in turn, be set by policy makers during an HPAI outbreak. Here, we integrate these economic considerations into an epidemiological model in which epidemiological parameters are determined by an outside agent (the farmer) to maximize profit from poultry sales. Our model exhibits a diversity of behaviors which are sensitive to (i) the ability to identify infected poultry, (ii) the average price of infected poultry, (iii) the basic reproductive number of avian influenza, (iv) the effect of culling on the market price of poultry, (v) the effect of market price on farm size, and (vi) the effect of poultry density on disease transmission. We find that under certain market and epidemiological conditions, culling can increase farm size and the total number of HPAI infections. Our model helps to inform the optimization of public health outcomes that best weigh the balance between public health risk and beneficial economic outcomes for farmers.

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The Coase Theorem suggests that married couples will divorce if and only if doing so increases their joint surplus, regardless of the legal rules governing divorce. This does not mean, however, that divorce laws only affect the distribution of rents. Because the distribution of rents affects each spouse's incentives for non-contractible investments, divorce laws can affect the joint welfare of the couple. This paper analyzes the effects of the consent divorce regime and the unilateral divorce regime on incentives for selfish and cooperative marital investments. Using these results, the paper demonstrates how endogenous choice of marriage with non-contractible investments can explain some recent empirical results concerning the effects of the shift from consent divorce to unilateral divorce. Finally, the paper explores why making divorce costly (but not too costly) can increase the joint welfare of a couple.