The foreclosure argument for exclusive dealing: The case of differentiated retailers

I analyze a cooperative characteristic-form game between two differentiated producers and a downstream retail sector. When there is a single downstream retailer, the game always has a nonempty Core, involving the retailer being a common dealer. Each producer can at most earn his increment to the collusive industry profit. This result is similar to what is obtained in the literature in an extensive-form noncooperative formulation of the game. When there are two differentiated downstream retailers, the Core is empty when products and retailers are too homogeneous. For sufficient product and retailer differentiation, the Core is nonempty. In these cases the retailers are always common dealers for both products.     

The revenue potential of a financial transaction tax for US financial markets

This paper estimates the revenue potential of a financial transaction tax (FTT) for US financial markets. We focus on analyzing the revenue potential of the Inclusive Prosperity Act that was introduced in the US House of Representatives in 2012 and the US Senate in 2015. The tax rates stipulated in this Act include 0.5% (50 basis points (bps)) for all stock transactions, 0.1% (10 bps) for all bond transactions and 0.005% (0.5 bps) on the notional value of all derivative trades. We examine three sets of evidence to generate potential revenue estimates: 1) the levels of transaction costs in US financial markets over time and within the range of financial market segments; 2) the extent of trading elasticities under various trading conditions; and 3) the current level of trading activity in US financial markets. Based on this evidence, we conclude that a US FTT operating at the tax rates stated above would generate about $220 billion per year, equal to about 1.2% of the current US GDP.