Diagonal Merger

Diagonal merger combines the assets of an input supplier and a downstream rival of the input demander that does not use the input. Diagonal mergers are likely to be overlooked by federal antitrust authorities as they are neither vertical nor horizontal mergers. Diagonal mergers are shown to be nearly as anticompetitive as comparable horizontal mergers and, like horizontal mergers, the welfare effects of diagonal mergers are predicted in the first instance by a modified HHI calculation.     

Macroeconomic adjustment processes

Simulations of the Canadian quarterly model RDX2 are used to illustrate the main macroeconomic adjustment processes called into play by an exogenous expenditure shock. Primary emphasis is placed on supply responses, including international flows of goods, services, capital and population, and on the key role played by inventory changes in buffering discrepancies between ex ante supply and demand. The constraining roles of prices, wages, and monetary policy are also dissected in some detail.     

Control and spread of contagion in networks with global effects

We study proliferation of an action in binary action network coordination games that are generalized to include global effects. This captures important aspects of proliferation of a particular action or narrative in online social networks, providing a basis to understand their impact on societal outcomes. Our model naturally captures complementarities among starting sets, network resilience, and global effects, and highlights interdependence in channels through which contagion spreads. We present new, natural, computationally tractable, and efficient algorithms to define and compute equilibrium objects that facilitate the general study of contagion in networks and prove their theoretical properties. Our algorithms are easy to implement and help to quantify relationships previously inaccessible due to computational intractability. Using these algorithms, we study the spread of contagion in scale-free networks with 1000 players using millions of Monte Carlo simulations. Our analysis provides quantitative and qualitative insight into the design of policies to control or spread contagion in networks. The scope of application is enlarged given the many other situations across different fields that may be modeled using this framework.