Issue 3

September 1995

"Breach of Trust" in Takeovers and the Optimal Corporate Charter

The paper analyzes how takeovers, various takeover defences, and golden parachutes affect the value of target companies, using an incomplete contracts framework.

Profiting from Induced Changes in Competitors' Market Values: The Case of Entry and Entry Deterrence

We resurrect an idea due to Hirshleifer [1971] by examining how one firm might profit by trading in the securities of other firms whose values are dependent upon the first firm's actions.

The Limited Role of Market Power in Generating Great Fortunes in Great Britain, the United States, and Australia

Studies of the largest contemporary fortunes in Great Britain, the United States, and Australia each find that over two-thirds of the fortunes originated in competitive industries.

Price-Matching Policy and the Principle of Minimum Differentiation

This paper shows that if duopolists are allowed to choose their product locations, a price-matching policy, and their prices sequentially and independently, both tacit collusion and minimum differenti

Privatisation and X-Inefficiency: A Bargaining Approach

The usual analysis of privatisation and X-inefficiency uses agency theory to model managerial effort. We model worker effort as determined by a bargain between firms and workers.

Vertical vs. Horizontal Integration: Pre-Emptive Merging

Pre-emption often plays a crucial role in firms' merger decisions. We study whether and under which circumstances pre-emptive merging occurs in vertically related industries.