The paper investigates prices and deadweight loss in multiproduct monopoly with linear interrelated demand and constant marginal costs. We show that, with commonly used models for linear demand such as the Bowley demand and vertically or horizontally differentiated demand, the price for each good is independent of demand crosseffects and of the characteristics and number of other goods. This contrasts with the oft-expressed view that prices critically depend on demand cross-effects. We also show that for these linear models, the deadweight loss due to monopoly amounts to half the total monopoly profit. Finally, we show how a production subsidy might restore social efficiency.

Recent empirical work investigating the role of minoritygovernments in the selection of fiscal policies has shown thatthe majority status does not affect the budget size. Thispaper presents an analytical framework which accounts for thisresult. It combines a government formation game and a budgetgame involving cabinet and parliament. A general indifferenceresult applies. An exogenous shock to the bargaininigenvironment which absorbes the cohesion of the governmentincreases the demand for expenditures. At the same time theconditions for the formation of a minority government arefulfilled. If the formateur is strong, a minority governmentcan be a device for cutting expenditures. Copyright Kluwer Academic Publishers 2004

In the model of optimal sequencing in economic integration, an agenda setter chooses between two bargaining protocols that correspond to two different integration paths. With multilateral negotiations, the union is formed immediately, whereas with sequential negotiations, a core union is formed before all other countries in the region integrate. The latter is preferred if formation of a core union has negative externalities on a candidate country. The agenda setter improves her bargaining position, but an efficiency loss from delayed integration is incurred. We demonstrate that the threat of delayed entry will not be carried out if an open-rule protocol is available, i.e., if the agenda setter can propose to form a core union and amend this proposal before it is adopted. Acknowledgements:The autors wish to thank an anonymous referee, Gautam Bhattacharya, Nadeem Naqvi, Leon Taylor and seminar participants at KIMEP University, American University in Central Asia, Kazakh-British University, and CEPET Udine.

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