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In this paper we investigate the impact of firms' pricing policies upon entry and welfare under duopoly price competition and product differentiation. We consider a model where an incumbent serves two distinct and independent geographical markets and an entrant may enter in one of the markets. Our results show that discriminatory pricing may be either more, less or equally favorable to entry than uniform pricing. The welfare effect of banning price discrimination is also ambiguous. However, the case for banning price discrimination is much weaker than under monopoly. Interestingly, discriminatory pricing may yield higher welfare even when entry occurs only under uniform pricing.

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The fight against money laundering has taken centre stage in the global arena. The European Union (EU), in line with various international organizations, plays an active role in the fight against this crime and promotes anti money laundering directions to its member states. The statistics regarding Portugal (a member of the EU since 1986) indicate that it lags behind most of the EU members in terms of reporting of suspicions of money laundering. This paper adopts a game theory approach to study the efficiency of the combat against money laundering in Portugal, both with regards to the financial and the non financial sector of the economy. Additionally, the paper studies the impact of the increase of sanctions, as recommended by the 4 th Directive 2015/849 of the European Parliament and of the Council of 20 th May of 2015, on that combat. The results show that the low probability of the institutions being caught (and fined) for not complying with their reporting duties, coupled with the low conviction rates for money laundering crimes, justifies the reduced number of suspicious transactions reported. The findings highlight that an increase of sanctions, on both financial and non financial institutions, would tend to augment the efficiency of the combat against money laundering in Portugal.

PurposeThe study aims to investigate the effect of cultural alignment and value congruency between children and founder on intergenerational succession and on the observation of family optimal outcomes.Design/methodology/approachA game-theoretical approach is used to develop a sequential game modeling the strategic interactions behind successor selection. The authors test its main predictions by conducting an experiment with 75 subjects.FindingsA theoretical prediction that misalignment between children and founder leads to outcomes without intergenerational succession, or to outcomes with intergenerational succession that are not family optimal. These predictions are buttressed by our experiment, which also found evidence that the family optimal outcome is focal when there are multiple equilibria.Research limitations/implicationsNo light is thrown on the sources of cultural (mis)alignment, but only on some of its consequences. Further studies of a different nature are needed to better understand the former.Practical implicationsCultural diffusion and value congruency within the family should be timely fostered to promote harmony during the succession process and raise the chances of successful succession.Originality/valueThe cultural alignment and value congruency between incumbent and successors is treated as shaping the incentives that both types of agents face in the successor-selection process. Further, experimental techniques have not been used to test the results obtained in games exploring issues in family firm succession. This paper aims to begin filling this gap.