Cartel Stability and Economic Integration

This paper investigates the effect of economic integration on the ability of firms to maintain a collusive understanding about staying out of each other's markets. The paper distinguishes among different types of trade costs: ad valorem, unit, fixed. It is shown that for a sufficient reduction of ad valorem trade costs, a cartel supported by collusion on either quantities or prices will be weakened, thus integration is pro-competitive. If integration consists of a reductions in unit (fixed) trade costs a price setting cartel is strengthened (unaffected), while a quantity setting one is weakened.Collusive behavior; Trade liberalisation; Specific tariffs; Market access cost

The Comparison between Ad Valorem and Unit Taxes under Monopolistic Competition

This paper shows that the welfare dominance of ad valorem over unit taxes under imperfect competition, extends to the Dixit-Stiglitz framework with differentiated products, entry and love of variety. This contrasts against findings by Anderson et al. (J Public Econ, 2001) made in a similar framework, but under Bertrand competition.Unit tax; Specific tax; Ad valorem tax; Welfare

The Impact of Entry and Competition by Open Source Software on Innovation Activity

This paper presents the stylized facts of open source software innovation and provides empirical evidence on the impact of increased competition by OSS on the innovative activity in the software industry. Furthermore, we introduce a simple formal model that captures the innovation impact of OSS entry by examining a change in market structure from monopoly to duopoly under the assumption that software producers compete in technology rather than price or quantities. The paper identifies a pro-innovative effect of OSS competition.open source software, innovation, strategic interaction

Migration Regulation Contagion

This paper examines the political economy of a selective immigration policy in a model with incomplete information on the characteristics of migrants. We address two questions: First, how does a selective immigration policy affect the number of immigrants which is admitted by the receiving country, and second, how does a selective immigration policy in one country affect immigration policies in other countries. We find (i) that countries with selective immigration policies ceteris paribus tend to admit more migrants than countries without such policies, and (ii) that neighboring countries will follow each other in implementing selective immigration policies. These theoretical findings are supported by evidence from an econometric panel analysis of immigration policies in 15 OECD countries in the period from 1980 to 2005.International migration; political economy of migration; skill-selective immigration policies