No abstract

No abstract

No abstract

No abstract

Does uncertainty about future wholesale prices facilitate coordination among firms? To address this question, we exploit a policy intervention (Mepco) that limited the week‐to‐week variation in wholesale prices in the Chilean retail gasoline industry. We show that Mepco caused a decrease in retail gasoline margins in Chile. Further, using price leadership intensity as a proxy for the strength of market coordination, we show that margins decreased more in markets with higher leadership intensity. We rationalize these findings through a repeated‐game framework.

No abstract

We model “patent privateering”—whereby producing firms sell patents to Patent Assertion Entities (PAEs), which then license them under the threat of litigation—in a bargaining game. PAEs can negotiate higher licensing fees than producing firms because they cannot be countersued for infringement. Privateering produces two countervailing effects: it increases the offensive value of patents, whereas it decreases their defensive value and lowers the aggregate surplus of producing firms. Embedding the bargaining game into a Research and Development (R&D) contest for multiple complementary technologies, we find that privateering may increase R&D investments, even as it induces more litigation threats and reduces industry profits.

No abstract