ON THE ANTICOMPETITIVE EFFECT OF EXCLUSIVE DEALING WHEN ENTRY BY MERGER IS POSSIBLE*

We extend the literature on exclusive dealing by allowing the incumbent and the potential entrant to merge. This uncovers new effects. First, exclusive dealing can be used to improve the incumbent's bargaining position in the merger negotiation. Second, the incumbent finds it easier to elicit the buyer's acceptance of exclusivity. Third, despite allowing the more efficient technology to find its way into the industry, exclusive dealing reduces welfare because (i) it may trigger entry through merger whereas independent entry would be socially optimal and (ii) it may deter entry altogether.     

How Much Does Wealth Matter in the Acquisition of Financial Literacy?

The acknowledged widespread lack of financial literacy casts serious doubts on the ability of individuals to make financial decisions. Some studies suggest that financial experience can affect financial knowledge and that household financial wealth can be a factor leading to the acquisition of financial literacy. This article investigated the determinants of financial literacy using the 2006 wave of the Italian survey on household income and wealth. Empirical results indicated that wealth has a positive but small effect on the degree of financial knowledge.     

Public and Private Hospitals,Congestion, and Redistribution

This paper studies how congestion in the public health sector can be used as both an in‐kind and in‐cash redistributive tool. In our model, agents differ in productivity and they can obtain a health service either from a congested public hospital or from a noncongested private one at a higher price. With pure in‐kind redistribution, agents fail to internalize their impact on congestion, and the demand for the public hospital is higher than optimal. When productivities are not observable but the social planner can assign agents across hospitals, the optimal congestion is higher than in the full information case in order to relax incentive constraints and foster income redistribution. Finally, if agents can freely choose across hospitals, the optimal subsidy on the private hospital price may be negative or positive depending on the relative importance of redistribution and efficiency concerns. In this case, redistribution is limited if the quality of the public facility depends on the number of users.     

A Money-Financed Fiscal Stimulus: Redistribution and Social Welfare

We analyze the redistribution channel of a money-financed fiscal stimulus (MFFS) versus debt-financed fiscal stimulus (DFFS) in a Borrower–Saver framework. The redistribution channel is larger when we consider an MFFS and borrowers are the main beneficiaries. A liquidity trap scenario amplifies the differences between an MFFS and a DFFS. The redistribution channel makes an MFFS effective at having an expansionary effect in the medium run, despite the adverse scenario. We show, however, that an MFFS increases the consumption gap between the two agents by redistributing income from savers to borrowers. Thus, an MFFS results detrimental for welfare when the welfare function is approximated around the efficient steady state.