Customer-capturing strategies: The way to replace existing technology characterized by network effects

Network effects are the basis of competitive advantage in digital economies. Although some researchers have indicated that technologies characterized by network effects are difficult to replace, real-world situations have not confirmed this argument. Challengers still defeat market leaders in markets with network effects. The analytical results presented here include the following: (1) a proposed new concept, resilience, can describe the resistive strength of a network to challenger customer-capturing strategies, (2) three types of networks can be identified based on their resilience values, and (3) high-resilience networks possessing technology are difficult to replace.     

With Friends Like These: Endogenous Labor Market Segregation with Homogeneous, Nonprejudiced Agents

In the economics literature, labor market segregation is typically assumed to arise either from prejudice ( Becker 1971 ) or from group differences in human capital accumulation ( Benabou 1993 ; Durlauf 2006 ; Fryer 2006 ). Many sociological studies, by contrast, consider social network structure as an embodiment of various forms of social capital, including the creation of obligations, information channels, and enforceable trust ( Coleman 1988 ; Portes and Sensenbrenner 1993 ). When firms hire by referral, social network segregation can lead to labor market segregation ( Tilly 1998 ). Various social network structures may arise from the actions of self-interested individuals ( Watts and Strogatz 1998 ; Jackson 2006 ); by incorporating concepts of social capital into an economic framework of profit-maximizing firms, this article develops a model of labor markets in which segregation arises endogenously even though agents are homogeneous and have no dislike for each other. Firms hire through referrals, and can enforce discipline by bribing a referrer to prevent a hiree from getting any outside job offers from other friends if he or she shirks. This is possible only if social networks are reasonably closed, so that the referee knows a majority of his or her friends' friends. By segregating into small communities, workers can more effectively create closed social networks. Social networks with different reservation wages will receive different wages; firms can induce such segregation and wage discrimination in the interest of profit. Workers may not benefit from such segregation, except as a best response to being in a society where it already exists; the "friends" in these social networks act as a worker discipline device, and in this way treat each other inimically.     

COMPETITION BETWEEN EQUITY MARKETS: A REVIEW OF THE CONSOLIDATION VERSUS FRAGMENTATION DEBATE

Technological advances and regulatory initiatives have led to the emergence of a competitive, but fragmented, equity trading landscape in several markets around the world. While these changes have coincided with benefits like reduced transaction costs, advancements in trading technology, and access to a diverse array of execution venues, regulators and market participants have also raised concerns about the welfare implications of innovations like dark pools as well as the resulting increase in execution complexity. Exchanges are often viewed as natural monopolies due to the presence of network externalities and economies of scale. However, heterogeneity in traders' preferences means that no single venue can serve the interests of all investors. Fragmentation of the marketplace can be seen as a direct outcome of this heterogeneity. In this paper, we review the theoretical and empirical literature examining the economic arguments and motivations underlying market fragmentation, the resulting implications for liquidity and price efficiency, and the role for public policy. Beyond the concerns for equity markets, the lessons from this literature are relevant for other asset classes experiencing an increase in competition between trading venues.     

A dynamic analysis of collusive networks

This paper investigates the strategic formation of collusive networks in a dynamic framework. A collusive network is a set of market sharing agreements between firms in oligopolistic markets and auctions. Belleflamme and Bloch (Int Econ Rev 45(2):387–411, 2004) fully characterize the pairwise stable collusive networks in their symmetric model. In contrast, we characterize the collusive networks to which a dynamic network formation process converges with positive probability in the symmetric model. We provide a complete characterization for the case of the process that starts from a network with sufficiently few links. Moreover, we show that the process never cycles but always converges to a stable network. In addition, we discuss an asymmetric model where firms enjoy a home country advantage. We show that the expected number of collusive agreements may be reduced by an increase in the degree of the home country advantage. This implies that policies for discouraging entry may fail, and may lead to a decrease in expected social surplus.     

多归属纵向差异化双边市场下竞争均衡

双边市场作为产业组织理论研究的热点问题,涉及平台纵向差异化的研究还很少,本文依照现实中普遍存在的双边的多归属和平台之间差异化的情况,构造了网络外部性参数不对称的多归属差异化Hoteling模型,并考察了新均衡下双边平台的定价、市场势力和利润情况。我们发现,单归属均衡受平台质量差别程度影响,多归属均衡受相异平台质量影响较大;网络外部性参数的不对称是双边市场与单边市场均衡差别的主要原因;其次与单归属均衡结果相比,多归属差异化均衡时拉大了两平台间上下游定价、市场份额和利润差额。     

企业家关系网络与企业集群演化失败的互动关系研究

企业家关系网络是企业集群演进中的一个重要驱动因素。基于动态能力理论的观点,企业家关系网络尽管是企业集群构建竞争优势的核心资源,但在环境不断变化的背景下,这种资源也可能会成为阻碍企业集群获取持续竞争优势的桎梏。利用企业家关系网络的演进模型有助于解释企业集群演化失败与企业家关系网络之间的关系,厘清企业家关系网络可能会对企业集群带来的负面效应。     

双边平台型信息产品企业版本划分策略研究

新兴的信息产品市场大多是双边市场,其中企业进行竞争时如何利用信息产品特性和市场双边特性,对产品质量和双边定价进行决策,运用纵向差异化策略达到最优收益,是双边平台型信息产品企业面对的重要问题。结合双边市场理论与版本划分理论,建立博弈模型,分析双边信息产品市场内平台型企业竞争的最优双边定价和产品版本划分的具体质量。结果显示:企业产品定价受产品组合质量差异的影响,对卖家定价由市场情况决定;企业提高付费产品质量可以提高收益,此时免费产品质量应根据市场双边特性强度进行调整;市场双边特性显著时企业免费产品质量应降低以提高收益,反之亦然;企业产品质量决策保证了双边规模和上游收益,下游收益则受市场双边特性强弱影响,市场双边特性显著时,平台付费产品价格和付费消费者规模提高,下游收益和总收益提高。     

Drivers of optimal prices in two-sided markets: the state of the art

In two-sided markets, a platform has two groups of customers and enables their interactions. Demand on one market side depends on demand on the other; therefore, when platforms set prices, they must consider this interdependency and set prices on both sides simultaneously. By surveying the vast theoretical marketing and economics literature, this article provides a clear and systematic overview of profit-maximizing pricing in two-sided markets. It identifies and structures the various drivers of those optimal prices. Using this framework, it summarizes the findings from prior research and offers an assessment of the state of the art with regard to drivers of optimal prices and their impacts on a platform’s price setting. This improves understanding of both the principles of two-sided markets and their optimal pricing. Finally, this state of the art paper suggests some directions for further research.     

Location Decisions of Competing Networks

Early entrants in markets with network effects usually occupy a “central location” and serve agents with “intermediate tastes,” whereas later entrants are niche players. Why would the first entrant choose to become a “general” network, given that later entrants will not have enough room for differentiation, resulting in a more intense competition for market share? In a Hotelling model with two rival networks, we show that for intermediate values of the network externality parameter the location equilibrium is indeed asymmetric: the first entrant locates at the center whereas the second entrant chooses an extreme (niche) location.     

Alignment,integration, and consistency in HRM across multi‐employer networks

Most studies of human resource management (HRM) have been conducted within the context of the single employing organization, which is strange given the recent growth in multi‐employer networks. In this study, the authors examine whether alignment, integration, and consistency—concepts central to or implicit in most analyses of HRM—has meaning and relevance in the multi‐employer context. They focus specifically on networks in which collaboration is intended to deliver high levels of product quality or customer service, precisely where one might expect employers would be attracted to “strong” HRM systems. Data was collected via interviews and document analysis in four networks, spanning both the public and private sectors in the United Kingdom. Despite a set of potentially favorable conditions within these networks to promote alignment, integration, and consistency, implementation was impeded by other equally powerful forces, including differences in employer goals within networks, especially between public and private sector organizations; intraorganizational tensions within internal labor markets for organizations involved in networks; using divergent HR policies between organizations within multi‐employer networks; and contradictions between the pursuit of “among employee” or “temporal” consistency for workers. Rather than prescribing a one‐size‐fits‐all solution for these problems, it is argued that detailed analysis of each network is necessary. ©2011 Wiley Periodicals, Inc.     

Multi-scale systemic risk and spillover networks of commodity markets in the bullish and bearish regimes

This paper proposes a new network topology approach based on the STVAR model to identify asymmetric impacts of market conditions on multi-scale systemic risk spillovers of commodity markets. The results show that bearish market conditions enlarge low-frequency systemic risk spillovers in commodity markets, and bullish market conditions have more striking impacts on high-frequency systemic risk spillovers. Furthermore, the center of risk spillover networks varies across the market conditions and frequencies. Specifically, at the high-frequency level, sugar is the largest risk transmitter in bad regimes, and heating oil is in the center of the network in good regimes. At the intermediate frequency level, soybean becomes a more important risk transmitter in both regimes. In other cases, heating oil is the center of risk spillover networks.     

Evidence on competitive advantage and superior stock market performance

This article analyzes the value‐relevance of industry‐based and resource‐based competitive advantage in a large sample of firms listed on the Oslo Stock Exchange. We measure competitive advantage by a single variable and perform a new decomposition into its underlying sources. In 1986–2005, the industry‐based and the resource‐based competitive advantage explain more than 20% of abnormal stock market returns, accumulated over 5 years. The resource‐based advantage is almost 4 times more important than the industry‐based advantage. Differences in both the return and the risk capability of firms' net assets relative to their industry peers are significant parts of the resource‐based advantage, estimated at 60 and 40%, respectively. Copyright © 2009 John Wiley & Sons, Ltd.     

The success and failure of policy-implanted inter-firm network initiatives: motivations,processes and structure

This paper examines the processes and causes of inter-firm network success and failure, defined in terms of the ability of networks to become a sustained and valued form of business activity for their members. The paper examines four different case study network initiatives: (1) a failed informal ‘new entrepreneurs' network’ (2) a successful informal ‘local cluster group’ (3) a failed formal ‘defence contractors' network’ and (4) a successful formal ‘small-firm technology group’. It is shown that networks in business are often consciously developed and maintained by those managing directors who have recognized the importance of cooperative activities for achieving competitive advantage for their companies. The best network support consisted of brokers who are able to mix and overlap the ‘hard’ business and ‘softer’ social interests of participants. The case studies indicate that it is formal groups that are the most potent form of inter-firm network, but that it is through an initially informal structure that they are best facilitated. It is concluded that both economic and social rationalities are at play in the motivation of firms to join networks, and that their success is closely connected to pre-existing commonality between members.     

贸易同盟、二元扩张与中国出口的双重优势

本研究基于异质性理论考察关税减免的贸易二元边际扩张效应,通过GTAP软件研究中国内地与香港双边贸易CEPA协议的远期效应,结果发现两地市场充分自由化后CEPA发挥了同盟区的贸易创造效应,内地对港贸易的二元边际保持明显的增长收益,其中外延边际更为显著。研究还发现低替代弹性产品越能够获得自由化的贸易收益,这显示我国内陆企业具有充分的差异化（多样性）国际竞争优势。研究表明市场自由化的国际区域性同盟可成为维持和发挥我国出口贸易“双重大国优势”的新来源。     

FOREIGN EXCHANGE RATE EXPECTATIONS: SURVEY AND SYNTHESIS

Abstract.  This paper reviews the empirical literature on foreign exchange rate expectations. Prominent issues are the forward premium puzzle, expectations formation in financial markets, heterogeneity of expectations, market microstructure, time-varying risk premiums and forecast performance. Although much has been learned in each field, this survey highlights the areas of research in which our understanding of the mechanism of exchange rate expectations is still incomplete. Our survey suggests that both irrational expectations and time-varying risk premiums account for the forward discount anomaly, that long-term expectations reverse towards their long-run equilibrium values and that heterogeneous behaviour of market participants has the potential of explaining some of the empirical regularities in the international finance literature.     

Business orientations and innovation in small and medium sized enterprises

The capability of Small and Medium Enterprises (SMEs) to drive and shape markets is one path to competitive advantage. Firms that drive markets do so by leveraging radical and disruptive innovation to shape the needs of current and future customers, thereby altering market structure. In the current study, we find that firms with an entrepreneurial orientation are more likely to develop both driving markets and market driven innovations, while firms with a market orientation are more likely to develop market driven innovations.     

Competitive advantage in the ERP system's value-chain and its influence on future development

Using the resource-based view, we present a set of propositions related to enterprise resource planning (ERP) development, reflections on competitive advantage and the different roles that stakeholders play in the value-chain. This has the goal of building a foundation for future research on ERPs and how stakeholders' desire to achieve competitive advantage influence ERP development, especially when it comes to development of a more standardised or pre-customised ERP system. The propositions also act as a foundation for increasing our knowledge concerning the difficulty in developing improved ERP systems.     

创造企业竞争优势:内部资源,外部网络及其整合

随着环境与技术的变化，组织网络已经成为企业生存环境的重要组成部分。尽管资源学派强调组织内部的资源能力是竞争优势的主要来源，企业外部网络对竞争优势的贡献也已经被越来越多的学者所认识。本文在进一步归纳两种不同竞争优势来源观的基础上，重点讨论了内部资源能力与外部网络在创造竞争优势时的互动关系，最后通过理性期望模型分析了内部资源能力与外部网络及其整合对建立企业竞争优势的作用。     

Artificial stock markets with different maturity levels: simulation of information asymmetry and herd behavior using agent-based and network models

This paper aims mainly at building artificial stock markets with different maturity levels by modeling information asymmetry and herd behavior. The developed artificial markets are multi-assets, order-driven and populated by agents having heterogeneous behaviors and information. Agents are defined by their information and their herd behavior levels. Agents trade multiple risky assets based on their wealth, their behaviors and their available information which spread among multiple behavioral networks. In a novel contribution to artificial stock markets literature, agents’ behaviors modeling is mixed with social network simulation to reproduce different degrees of information asymmetry and herd behavior based on several assortative topologies. Several simulations validated the proposed model since univariate and multivariate stylized facts were reproduced both for mature and immature stock markets. The proposed artificial stock market can be considered as a first step toward decision and simulation tools for optimal management, strategy analysis and predictions evolution of immature stock markets.     

Adverse Selection,Gresham's Law and State Regulation

Regulation is often justified as a response to adverse selection caused by poorly informed buyers and as a means of preventing a ‘race to the bottom’ in competitive markets. This paper argues that competitive markets respond with a variety of institutional mechanisms to problems of adverse selection and that these are often subverted by regulation. Far from Gresham's Law being associated with competitive market processes, it is actually more correctly viewed as the outcome of regulatory intervention that weakens the quality‐protecting incentives that economic agents would otherwise face.