It is shown that the standard arguments for a monopoly to persist break down when many units of capacity become available sequentially. The reason is that deterring entry at one stage affects the cost of doing so in later stages. This force can be so powerful that entry is deterred only at the final stage. The persistence of monopoly or its erosion over time depends on the timing of arrival of capacity, the size of early versus subsequent capacity availability, the length of the capacity-acquisition stage relative to the life of the industry, and the discount factor.

This paper examines the effects of auctioning quota licenses when monopoly power exists. Here the sales of licenses will never raise any revenue if domestic and foreign markets are segmented. More surprisingly, the inability to raise revenue is shown to persist even when arbitrage across markets is possible as long as the quota is not too far from the free trade import level. This suggests that existing revenue estimates from auctioning quota licenses, which are based on the assumption of competition, are upwardly biased. It also makes it likely that quotas implemented by auctioning licenses, even when set optimally, have adverse welfare effects.

In oligopolistic situations, content protection can have unexpected effects as it changes the nature of interactions between input suppliers. With a duopoly, it does so in a manner that makes the foreign firm wish to match price increases and decreases of the domestic firm. Domestic input suppliers can therefore lose from such policies, even when set at free trade levels. The relation between input demands, the form of protection, and the degree of substitution between inputs is shown to define the effects of content protection and to provide the basis for understanding who might lobby for protection in different environments.

This paper looks at the predictions of a standard heterogeneous firm model regarding the exports of firms across markets in response to a particular trade policy experiment and compares these predictions to the data. A unique feature of our data is that it has information on the exports of the same firm to different markets which allows us to look for a new set of predictions of such models. We argue that while certain predictions seem consistent with the data, others are not. We then describe the patterns found in the data and argue that firm and market specific demand shocks help explain a number of these anomalies. These parsimoniously capture factors, like business contacts or networks, or even fashion shocks, that make buyers more attracted to one firm rather than another in a particular market.

Many countries base college admissions on a centrally administered test. Students invest a great deal of resources to improve their performance on the test, and there is growing concern about the high costs associated with these activities. We consider modifying the test by introducing performance-disclosure policies that pool intervals of performance rankings. Pooling affects the equilibrium allocation of students to colleges, which hurts some students and benefits others, but also affects students’ effort. We investigate how such policies can improve students’ welfare in a Pareto sense, study the Pareto frontier of pooling policies, and identify improvements that are robust to the distribution of college seats. We illustrate the potential applicability of our results with an empirical estimation that uses data on college admissions in Turkey. We find that a policy that pools a large fraction of the lowest-performing students leads to a Pareto improvement in a contest based on the estimated parameters. A laboratory experiment based on the estimated parameters generally supports our theoretical predictions.