Cournot and Bertrand Competition when Advertising Rotates Demand: The Case of Honda and Scion

We develop a model to explain why firm behavior differs in the market for small cars. Firms such as Honda compete in output (Cournot) and produce marketing campaigns with universal appeal, while firms such as Scion compete in price (Bertrand) and produce targeted marketing campaigns. We show that this mixture of Cournot and Bertrand behavior can occur when advertising rotates demand. When behaving as a Cournot-type firm such as Honda, it is more profitable to pursue a mass-market advertising campaign that rotates demand counterclockwise when it faces relatively low unit costs and a flat demand function. When behaving as a Bertrand-type firm such as Scion, it pays to pursue a niche-market advertising campaign that rotates demand clockwise when it faces relatively high unit costs and a steep demand.     

Prohibiting State Aid in an Integrated Market: Cournot and Bertrand Oligopolies with Differentiated Products

The prohibition of state aid in an integrated market such as the European Community is analyzed in a model where firms produce differentiated products and market structure is either Cournot or Bertrand oligopoly. State aid is financed by distortionary taxation so the opportunity cost of government revenue exceeds unity. Under both Cournot and Bertrand oligopoly, if products are sufficiently close substitutes then there exists a range of values for opportunity cost where governments give state aid and where the prohibition of state aid will increase aggregate welfare. With sufficiently differentiated products, the prohibition of state aid will reduce aggregate welfare.     

创业意愿如何转化为创业行为？——基于行动-状态导向作用的研究

创业意愿转化为创业行为才具有重要的现实意义。文章以大学生为对象，在理论研究的基础上，构建行动-状态导向调节创业意愿与创业行为关系的理论模型，运用滚雪球式非随机便利抽样法进行间隔1年时间的两个阶段调查，通过分层回归分析法等进行数据分析和假设检验。研究发现，创业意愿对创业行为具有显著正向预测作用，行动导向的“脱离”“主动”和“持续”维度分别强化创业意愿与创业行为的正向关系；而状态导向的“执着”“犹豫”和“短暂”维度分别弱化创业意愿与创业行为的正向关系。研究结果表明，在个人具有行动导向时创业意愿更能转化为创业行为，行动导向这种个人特质为创业意愿转化为创业行为提供了充分条件。以此为基础，对公共部门和大学生个人提出了策略建议。     

A reappraisal of strategic trade policies with the endogenous mode of competition under vertical structures

This paper examines the endogenous choice of competition mode with strategic export policies in vertically related markets when each upstream firm located in each country determines the terms of the two-part tariff contract by maximizing generalized Nash bargaining. We show that (i) choosing Cournot (Bertrand) competition is the dominant strategy for both downstream firms when goods are substitutes (complements), which leads Pareto superior regardless of the nature of goods under the optimal trade policies; (ii) irrespective of rival’s competition mode, the optimal trade policy is an export subsidy under Cournot competition and an export tax under Bertrand competition; and (iii) trade liberalization may give rise to changes of competition mode and increase of social welfare.     

我国企业价格合谋的博弈论分析

随着市场竞争日益加剧,我国企业应从价格合谋的现象出发,运用库诺特——纳什均衡及伯川德——纳什均衡模型分析我国的企业合谋行为,指出企业合谋行为失败的原因在于企业技术创新能力不足和企业价格竞争行为的非理性。     

Strategic trade policy with endogenous choice of quality and asymmetric costs

This paper examines strategic trade and joint welfare maximizing incentives towards investment in the quality of exports by an LDC and a developed country. Firms first compete in qualities and then export to an imperfectly competitive, third country market. Under Bertrand competition, unilateral policy involves an investment subsidy by the low-quality LDC and an investment tax by the developed country, whereas jointly optimal policy calls for the reverse so as to reduce price competition by increasing product differentiation. Under Cournot competition, unilateral policy is also reversed from the Bertrand outcome, but jointly optimal policy involves a tax in both countries.     

Robust rules for industrial policy open economies

The theory of strategic trade policy yields ambiguous recommendations for assistance to exporting firms in oligopolistic industries. However, some writers have suggested that investment subsidies are a more robust recommendation than export subsidies. We show that, although ambiguous in principle, the case for investment subsidies is reasonably robust in practice. Except when functional forms exhibit arbitrary nonlinearities, it holds under both Cournot and Bertrand competition, with either costreducing or market-expanding investment, and with or without spillovers. Only if firms have strong asymmetries in their investment behaviour and engage in Bertrand competition is an investment tax clearly justified.     

自利行为下我国遭遇反倾销诉讼原因的博弈分析

自上世纪90年代以来我国一直是美欧等西方发达国家反倾销的重点国家,这引起了我国学者对于倾销与反倾销的广泛研究。本文从自利行为角度对国企出口遭遇反倾销进行探讨。通过模型建构,得出结论:由于信息的不完全性,这使得进口方更容易错误地认为出口方有倾销行为。     

信贷配给对农村地区贫困的门槛效应研究

基于信贷配给对农村贫困作用的内在逻辑,运用面板门槛模型剖析了信贷配给对农村地区贫困的非线性作用及其地区差异。研究发现：降低信贷配给程度是减缓农村地区贫困的有效途径,且具有显著的门槛特征;随着农业信贷配给程度由高水平区间向低水平区间的转换,农村地区贫困与信贷配给程度的关系呈“U”型变化;信贷配给对农村地区贫困的门槛效应具有明显的区域特征,东部农村地区随着信贷配给程度的降低,增加信贷有效供给的减贫效应逐渐变弱,中西部农村地区随着农业信贷配给程度由高水平区间向低水平区间的转换,农村贫困与信贷配给程度的关系呈倒“U”型变化。     

Building the Charity Brand Community

The current article extends the concept of brand community to the charity sector. While the charity sector has begun to embrace the relationship marketing paradigm, brand communities represent a unique form of relationship marketing that can have a significant impact on nonprofits. A conceptual model of brand community development in the charity sector is proposed, and two unique mechanisms by which charity brand communities might develop — the cognitive and experiential‐learning mechanisms — are proposed. Not only do these mechanisms offer unique insights into how brand communities might develop, but they also explain how “sense of community” becomes a dominant influence on supporter loyalty. Research propositions concerning the influence of specific markers of brand community upon charity support behavior, are also presented.     

A product-centric data mining algorithm for targeted promotions

Targeted promotions in retail are becoming increasingly popular, particularly in UK grocery retail sector, where competition is stiff and consumers remain price sensitive. Given this, a targeted promotion algorithm is proposed to enhance the effectiveness of promotions by retailers. The algorithm leverages a mathematical model for optimising items to target and fuzzy c-means clustering for finding the best customers to target. Tests using simulations with real life consumer scanner panel data from the UK grocery retailer sector show that the algorithm performs well in finding the best items and customers to target whilst eliminating “false positives” (targeting customers who do not buy a product) and reducing “false negatives” (not targeting customers who could buy a product). The algorithm also shows better performance when compared to a similar published framework, particularly in handling “false positives” and “false negatives”. The paper concludes by discussing managerial and research implications, and highlights applications of the model to other fields.     

An empirical assessment of the welfare effects of reciprocal dumping

Can two-way trade in similar products lead to lower welfare than if such trade was banned? Theory answers yes. To empirically investigate this proposition we examine Swedish imports of bottled water. Assuming one-shot (Bertrand and Cournot) competition, we can use the estimates from a structural model of demand to uncover marginal costs. We simulate the effect on consumer and producer surplus of banning imports. We do not find convincing evidence that banning imports would increase overall welfare. Given our choice of market this suggests we should not be overly concerned with the welfare effects of two-way trade in consumer goods that are close to homogenous.     

Consumers as innovators in the electricity sector? Consumer perceptions on smart grid services

This article assesses the possibilities of using consumer innovation in the electricity sector, which is slow‐moving, yet faced with huge challenges and opportunities to become “smart” and “low carbon.” We study the benefits of engaging innovative consumers (“lead users”) in product, service, and business innovation in terms of (a) the capacity of lead user‐consumers to innovate in the highly regulated electricity market, (b) the attractiveness of such lead‐user generated ideas for mainstream consumers, (c) the usefulness of lead‐user engagement for companies in the energy industry, and (d) the usefulness of lead user engagement for the necessary broader societal transition processes. We conclude that consumers can stimulate industry‐wide innovation even in challenging contexts like “smart” and “low‐carbon” solutions and the highly regulated energy industry. Lead user‐consumers can also articulate societal and social responsibility concerns that are relevant for the entire market.     

Aiding Car Producers in the EU: Money in Search of a Strategy

This article investigates how the general principles of the Treaty have been applied to the car sector in the EU, where the soft law provisions are of particular interest. A detailed quantitative analysis from 1990 to 2008 highlights a reduction of aid over time. A shift from sectoral to “regional development” motives in granting aid to the sector is also observed in the last 10 years. However, sector specific aid is now less explicit but it remains important. Large amounts of public money are spent without a consistent strategy, reducing capacity in some cases, expanding it in others. The scarcity of public funds calls for a more focussed European policy for this industry.     

Project Finance and Concession Pricing Models: An Application to Brazilian Ports

Since the Lei dos Portos (“Ports Law”) of 1993, Brazilian ports have operated under the landlord regime, which places the management of ports in the hands of a national authority and provides for the rendering of private services inside the facilities. The model has enabled increases in capacity as well as gains in efficiency, both of which are currently limited due to infrastructure constraints. Expanding infrastructure by building additional ports was an option for the sector to meet the needs of a growing economy. In this context, this article discusses the adoption of public–private partnerships and project finance structure to propose a formula to compute the value of a new port.     

Making the ‘handmade’ bike and trying to make a living: market objects,field-configuring events and some limits to market making

In line with growing interest in craft and maker economies, I examine the resurgence of handmade bicycle fabricators (“framebuilders”) in the U.S. since the early 2000s. I provide an account of one of the driving elements of this framebuilding renaissance, the North American Handmade Bicycle Show, considered as a “field-configuring event” through – and around – which forms of market-making and market object stabilization processes were achieved. I focus in particular on the way in which the “handmade bike” as a market object was stabilized and defined. Expanding on the “markets as practice” literature, I take up a larger concern with how these market-making and field-configuring dynamics connect to the material position of those within the field and their pursuit of livelihood. I find that, paradoxically, the particular successful stabilization of the “handmade” bicycle achieved around the show was difficult to sustain as a business model for many framebuilders.     

Petty services,profit‐led growth and rural–urban migration in a developing economy

This paper develops a structuralist urban dual economy model for a developing economy consisting of a capitalist formal sector and a “petty” or informal service sector. The petty service sector plays an important role in wage determination and capital accumulation in the formal sector. The urban dual economy is situated in the midst of a rural area endowed with generous amount of surplus labour. The rural area augments urban labour supply over time through rural–urban migration. The paper, therefore, incorporates rural–urban migration within a structuralist framework and highlights its implication for growth and structural change in urban spaces of developing economies riddled with persistent formal–informal duality.     

Positioning Strategies of Retail Firms in Ghana

This paper assesses how retail firms in Ghana pursue positioning activities. Overt observations, face-to-face interviews with staff, managers and mall intercept methods provide an insight into the positioning strategies of firms in the retail sector. We adopt an empirically based and generic consumer-derived typology of positioning strategies to obtain the results. The findings revealed that the dominant strategies are “service,” “value for money,” “attractiveness,” “reliability,” “top of the range,” selectivity, and “brand name.” The emphasis placed on each of these positioning strategies varies from firm to firm.     

Corporate social responsibility: The debate revisited

Before gaining general acceptance, an idea that jolts individuals out of accustomed-behavioral patterns undergoes a slow evolution. What is interesting in the history of the corporate-social-responsibility doctrine is that, within roughly three decades, it has achieved a status almost coequal with the bottom-line philosophy which, in the past, provided legitimacy to corporate decision making.Nevertheless, debate over corporate responsibilities continues. Two factors explain why: 1) corporate performance is perceived by some as not matching corporate rhetoric and 2) the “battle of definitions” continues.The first factor will be determined within the next five years because the Reagan Administration, by curtailing government activities, places more responsibility on the private sector. The definitional issue of CSR and CSR² (responsibility versus response) is not likely to be resolved soon but the strengths of the “response model” do not equal the strengths of the “responsibility model.” Responsibility is a moral term and response a psychological one: the American people ask their leaders to behave as “virtuous agents.”Moral decision rendered in complex situations—and on behalf of countless others—will lead people to define “correctness” differently, as the “Poletown incident” in Detroit amply illustrates. The search, however, for a new credo and a new character for America business has begun—and will continue.     

Profit reducing international outsourcing

Recent empirical evidence shows a negative relationship between international outsourcing and profitability. This paper provides a theoretical explanation for this phenomenon. We show that, in an oligopolistic market, firms earn lower profits in the outsourcing equilibrium compared to the situation where neither firm does outsourcing, and this holds irrespective of the intensity of competition. We show that whether international outsourcing is likely to reduce profit under more intense competition (measured by the degree of product differentiation, number of firms and the type of product market competition, namely, Cournot and Bertrand competition) is ambiguous. We further show that international outsourcing may be socially ‘excessive’ for the sourced country and for the world.