An input supplier selling to competing downstream firms would benefit from publicly committing at the outset to all contracts. Efficient commitment, however, would require complete contracts. We study instead bilateral contracting, without commitment regarding others' terms. Each firm then fears that the supplier might opportunistically renegotiate another's contract to increase bilateral profit at the firm's expense. We show that nondiscrimination clauses generally cannot curb such third-party opportunism, even with symmetric firms. To reassure firms, crude forms of commitment may be adopted. This could explain the pervasiveness of exclusivity arrangements and the striking uniformity and intertemporal rigidity of franchise contracts.

This paper constructs a stationary rational-expectations equilibrium in which an extraneous random variable, called animal spirits, causes fluctuations in unemployment. The model assumes costly matching in the labor market and a thin-market externality in the output market that makes the profitability of hiring depend positively on the number of firms hiring. The equilibrium does not rely on any effect of expected inflation on labor supply. It is also stable under learning; Bayesian updating induces convergence to the equilibrium with positive probability even if people start with no definite belief that animal spirits affect the profitability of hiring.

We characterize coordinated bidding strategies in two cases: a weak cartel, in which the bidders cannot make side-payments; and a strong cartel, in which the cartel members can exclude new entrants and can make transfer payments. The weak cartel can do no better than have its members submit identical bids. The strong cartel in effect reauctions the good among the cartel members.

An explicit solution of an equilibrium model with price-setting firms and searching customers makes possible a number of comparative-statics predictions about how cost differences among firms, search costs of customers, and taxes will affect the mean and variance of the distribution of market prices. Another implication of the model is that a firm's demand depends on the difference between its price and the average price in the market.

A dynamic model with many sellers and buyers is constructed. Agents failing to trade may trade in the next period. An equilibrium is found where sellers hold identical auctions and buyers randomize over the sellers they visit. The distribution of buyer valuations is endogenous. An auction with efficient reserve is an optimal mechanism from each seller's point of view, in spite of the ability of any seller to alter the distribution of buyer types participating in the seller's mechanism by altering the mechanism.

The Coase conjecture (1972) is the proposition that a durable-goods monopolist, who sells over time and can quickly reduce prices as sales are made, will price at marginal cost. We show that an arbitrarily small deviation from Coase's assumptions—a deviation that applies in almost any practical application—results in the failure of that conjecture. In particular, we examine that conjecture in a model where there is a vanishingly small cost for production (or sales) capacity, and the seller may augment capacity in every period. In the “gap case”, any positive capacity cost ensures that in the limit, as the size of the gap and the time between sales periods shrink, the monopolist obtains profits identical to those that would prevail when she could commit ex ante to a fixed capacity. Those profits are at least 29.8% of the full static monopoly optimum.