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We take a differential game approach to study the dynamic market interaction between two Internet Service Providers (ISP) offering services characterized by different quality levels. Web congestion is accounted for, consisting in the fact that for a given network capacity, i.e. for given amount of resources to be shared, the quality of services decreases with the number of customers. ISP firms, by accumulating capital, may invest in order to increase their own network capacity. In contrast with the acquired wisdom, we prove that there exists an admissible intertemporal parameters subset wherein the low quality firm performs better than the high quality firm in terms of equilibrium profits. Furthermore, we establish conditions under which the low quality firm becomes a natural monopolist. Finally, we prove that consumers may be better off under cooperative rather than under non cooperative play.

We examine policies directed at regulating tobacco consumption through three types of instruments: (i) an excise tax hindering consumption by increasing the price of cigarettes, (ii) prevention programs helping consumers to make choices that are more time consistent when trading-off the current pleasure from smoking and its future health harms, and (iii) smoking bans directly restricting consumption. First, on normative grounds, we focus on the optimal design of public policies maximizing the economy's surplus. Second, in a positive perspective, we investigate how the lobbying activities of the tobacco industry, of smokers, and of anti-tobacco organizations may distort government intervention.

Abstract
In this paper, we propose technology uncertainty as a new factor relevant to market collusion. We analyze an infinitely repeated quantity game where, for each firm, the marginal productivity of the input employed in the production process is affected by an unobservable shock. Each firm faces technology uncertainty, measured by the variance of the shocks, in every period. We show that, under both grim trigger strategies and optimal punishments, technology uncertainty enhances cartel stability, suggesting that, in industries characterized by technology uncertainty, the actions of the antitrust authorities should be intensified. We also show that collusion is less likely when technology shocks are highly correlated, implying that regulators interested in deterring collusion should promote the formation of industrial clusters.

We take a new look at the comparison between the Stackelberg equilibrium and the Cournot equilibrium. We show that, when the elasticity of the inverse market demand equals the curvature of the inverse market demand weighted by the Lerner Index, a generic Stackelberg leader sets the same quantity and earns the same profit as a generic Stackelberg follower. When the curvature of the inverse market demand equals the total number of firms in the industry, a coincidence among the quantities produced by a first mover, a second mover, and a generic firm facing Cournot competition occurs.