Commitment,first-mover-, and second-mover advantage

We identify circumstances under which a firm with a first-mover advantage may get leapfrogged by a follower. At the market stage we assume a Stackelberg structure, i.e. the leader commits to a quantity and the follower reacts to it. We allow the owners of both firms to select the internal organization and the production technology before quantities are set. That is, leader and follower can additionally use two commitment strategies alternatively or in combination: investing in R&D and delegating quantity decisions to managers. Despite the symmetry of options for the two firms, we find that there is a unique equilibrium in which both firms invest in process R&D, only the follower delegates, and the follower can overcome the first-mover advantage of the quantity leader and obtain a higher profit than the leader. Our analysis reveals that there are some important differences between the two commitment devices “cost-reducing R&Dt” and “delegation to managers”.      

集群领先企业与跟随企业的协同创新过程模型

采用模型研究和数值模拟的方法,研究了集群内的领先企业与跟随企业进行协同创新的两阶段过程——研发阶段和市场化阶段。研究结果显示:协同创新可实现领先企业和跟随企业的"双赢";在协同创新过程中,跟随企业依附于领先企业,领先企业可获得比跟随企业更多的市场份额和利润;跟随企业应更关注协同创新过程中领先企业对其的技术溢出,从而提高自己的创新实力。     

Cournot and Stackelberg Duopolies Revisited

First, conditions are derived for a leader (or a follower) to be more advantageous than a follower (or a leader) in Stackelberg duopoly with symmetric firms and without product differentiation. Second, the equilibria in Cournot and Stackelberg duopolies are compared under a set of reasonable assumptions. If the reaction function slopes upward, the Cournot duopolists' profits turn out to be lower than those of both the Stackelberg leader and follower, and the equilibrium industry output is smaller in Stackelberg duopoly than in Cournot duopoly.
JEL Classification Numbers: D21, D43, L13.     

Timing of endogenous bargaining over costs and firms’ locations

This work analyzes a duopoly in which firms choose their locations and then bargain over wages with their unions. The timing of the bargaining process is endogeously determined. We obtain that bargaining is simultaneous if and only if both firms decide when negotiations take place. Otherwise negotiation takes place sequentially. Under simultaneous or sequential negotiations, the market is equally shared and both firms have the same price-cost margins and profits. When bargaining is sequential firms have higher profits, the leader locates closer to the market than in the simultaneous case, the follower locates further away and the distance between the two firms is greater.      

ON TECHNOLOGY LICENSING IN A STACKELBERG DUOPOLY

This paper finds that in a linear Stackelberg duopoly model, the follower is more likely to license a cost-reducing innovation to the leader than the leader is to the follower, regardless of whether licensing is in the form of a fixed fee or royalty per unit of output. Under fixed-fee licensing, the follower gains more from small innovations while the leader gains more from large non-drastic innovations. Under royalty licensing, the follower always gains more than the leader from an innovation.     

Corporate social responsibility and strategic relationships

We analyze a delegation game relevant to the conduct of corporate social responsibility (CSR) in which the firm’s owner offers the manager a contract consisting of firm profit and social welfare. We derive three results that distinctly differ from existing findings. First, CSR decisions are strategic complements for firms. Second, with simultaneous CSR decisions, the equilibrium price is equal to marginal cost, despite the fact that firms compete in a Cournot duopoly. Finally, with sequential CSR decisions, unlike the follower firm, the leader firm never exhibits CSR. However, the follower firm can enjoy a profit equal to that derived by the leader in a Cournot–Stackelberg game.     

Stackelberg竞争结构中质量提高型创新技术授权和企业兼并

本文基于Stackelberg双头垄断竞争模型,分析比较了质量提高型创新技术拥有企业的技术授权策略和企业兼并。研究结果表明:不论技术拥有企业是市场先行者还是跟随者,其总是偏向于企业兼并,而不会选择固定费用授权方式;如果政府禁止企业的兼并行为,那么当技术拥有企业在市场中是产量跟随者时,其愿意以提成许可方式进行技术授权;从社会福利角度考虑,技术授权可提高社会福利,而企业兼并一般不利于社会福利的提高,只有当创新技术拥有企业是Stackelberg竞争结构中的产量跟随者且其创新规模较大时,企业兼并才可提高社会福利。     

Strategic Rivalry With Spillovers Within Segmented Versus Integrated Markets

We consider a two-stage game with firms investing in R&D in the first stage while competing [a] la Cournot in the second stage. The firms are located in two countries, which are either segmented or integrated. R&D spillovers occur between firms located in the same country as well as between firms located in different countries.

We first examine the consequences of market integration on the impact of national and international R&D spillovers on innovative efforts, effective R&D, profits and total welfare. Comparing the resulting equilibrium levels, we subsequently conclude that market integration always leads to higher R&D investments and output if international R&D spillovers are limited, while the welfare consequences are ambiguous. Finally, we also analyze the welfare maximization problem of a ‘constrained social planner who can only decide on the level of R&D spillovers.     

Stackelberg leadership in a dynamic duopoly with stochastic capital accumulation

I propose a dynamic duopoly model where firms enter simultaneously but compete hierarchically á la Stackelberg at each instant over time. They accumulate capacity through costly investment, with capital accumulation dynamics being affected by an additive shock the mean and variance of which are known. The main findings are the following. First, the Stackelberg game is uncontrollable by the leader; hence, it is time consistent. Second, the leader invests more than the follower; as a result, in the steady state, the leader’s capacity and profits are larger than the follower’s. Therefore, the present analysis does not confirm Gibrat’s Law, since the individual growth rate is determined by the timing of moves.JEL Classification: C61, C73, D43, D92, L13Financial support within the project The post-entry performance of firms: technology, growth and survival lead by Enrico Santarelli, co-financed by the University of Bologna and MIUR, is gratefully acknowledged. I thank Uwe Cantner, Roberto Cellini, Roberto Golinelli, Helen Louri, Enrico Santarelli, Antonello Scurcu, Peter Thompson, two anonymous referees and the audience at the final workshop of the project (Bologna, November 22-23, 2002) for useful comments and discussion. The usual disclaimer applies.     

Strategic timing in R&D agreements

We study the endogenous formation of R&D agreements in a R&D/Cournot duopoly model with spillovers where also the timing of R&D investments is endogenous. This allows us to consider the incentives for firms to sign R&D agreements over time. It is shown that, when both R&D spillovers and investment costs are sufficiently low, firms may find difficult to maintain a stable agreement due to the strong incentive to invest noncooperatively as leaders. In this case, the stability of an agreement requires that the joint investment occurs at the initial stage, thus avoiding any delay. When spillovers are sufficiently high, the coordination of R&D efforts becomes a profitable option, although firms may also have an incentive to sequence noncooperatively their investment over time. Finally, when spillovers are asymmetric and knowledge mainly leaks from the leader to the follower, investing as follower may become extremely profitable, making R&D agreements hard to sustain unless firms strategically delay their joint investment in R&D.     

Real options game over the business cycle

This paper studies the impact of business cycles on firms' strategic investment decisions by developing and solving a continuous time regime-dependent real options game in an asymmetric duopoly. The value functions, roles and optimal investment timing decisions of the two firms in the expansion and recession states are jointly determined. We show that the preemptive investment equilibrium, where the leader invests earlier than its own first-best investment timing, is pro-cyclical. Moreover, the simultaneous investment equilibrium, where the firms simultaneously invest late and enjoy waiting flexibility as a tacit collusion, is counter-cyclical. In addition, we specifically demonstrate that the values of the leader and follower in the expansion state are smaller than those in the recession state when the preemptive equilibrium prevails in the expansion state and the simultaneous equilibrium prevails in the recession state.     

Stackelberg Mixed Duopoly with a Foreign Competitor

We investigate Stackelberg mixed duopoly models where a state‐owned public firm and a foreign private firm compete. We examine a desirable role (either leader or follower) of the public firm. We also consider endogenous roles by adopting the observable delay game of Hamilton and Slutsky (1990). We find that, in contrast to Pal (1998) discussing a case of domestic competitors, the public firm should be the leader and that it becomes the leader in the endogenous role game. We also find that in contrast to Ono (1990) eliminating a foreign firm does not improve domestic welfare in mixed oligopolies.     

A note on Stackelberg competition

This note investigates a Stackelberg–Nash competition model. We determine the conditions under which the leaders may achieve better profits than the followers when all firms compete on quantity in a two stage game. We focus on the properties of the followers’ best response functions. It is shown that the Stackelberg equilibrium may coincide with the Cournot equilibrium. In addition, the followers may achieve higher profits than the leaders. Such results put forward the working and the consequences of strategic complementarities. These results are illustrated with three examples.     

The environmental Porter hypothesis: theory,evidence, and a model of timing of adoption

The Porter hypothesis postulates that the costs of compliance with environmental standards may be offset by adoption of innovations they trigger. We model this hypothesis using a game of timing of technology adoption. We will show that times of adoption will be earlier if the non-adoption tax is higher. The environmental tax will turn the preemption game with low profits into a game with credible precommitment generating higher profits (pro-Porter). If there is a precommitment game without environmental taxes, the introduction of a tax will lead to lower profits (anti-Porter). An evaluation of the empirical literature indicates that the Porter hypothesis will hold even for profit-maximizing firms under multiple market imperfections such as imperfect competition, X-inefficiency, and agency costs. These are more likely to be present in sectors with large firms. In many case studies that we have evaluated, though, we detected an element of explicit or implicit subsidies for environmentally friendly behaviour, which is in line with Pigovian policies.     

Trade Policy in the Presence of Technology Licensing*

We consider strategic trade policy when a high‐cost and a low‐cost firm belonging to two different countries compete in quantities in a third country, and technology is transferable via licensing. We characterize the effects of subsidies on (i) licensing payments—a new source of rents, (ii) the decision to license, and (iii) the subsidy bill difference (compared to when licensing is infeasible). We find that, in the presence of licensing, optimal strategic trade policy has several interesting features. For example, even under Cournot competition, optimal policy can be an export tax instead of an export subsidy. Also, unlike results in strategic trade policy with asymmetric costs, we find that optimal export subsidies are not necessarily positively related to the cost‐competitiveness of firms. In other words, governments need not necessarily favor “winners” when licensing is possible. Furthermore, there exist parameterizations such that a government, if it can, might ban licensing.     

产品差异与技术差距影响研发溢出的理论探讨

在传统研发溢出效应假设基础上，通过技术差距将溢出效应与产品差异有机联系起来，并通过构建双寡头企业两阶段博弈模型对研发卡特尔、生产卡特尔、完全合作等不同形式合作联盟的均衡水平和福利变化进行分析比较。研究证实：当企业间技术差距较小时，完全合作或研发卡特尔能有效提高企业利润和社会福利；而当技术差距较大时，研发阶段的合作不仅无法激励企业进行研发投入，还会抑制企业创新的积极性。此外，与完全合作相比，局部合作具有更强的稳定性和可持续性，尤其是在产品差异程度较大的情况下，研发卡特尔最为稳定。     

Pollution in strategic multilateral exchange: Taxing emissions or trading on permit markets?

We introduce polluting emissions in a sequential noncooperative oligopoly model of bilateral exchange. In one sector, a leader and a follower use polluting technologies which create negative externalities on the payoffs of strategic traders who belong to the other sector. By modeling emissions as a negative externality, we show that the leader pollutes more (less) than the follower when strategies are substitutes (complements). Then, we consider the implementation of public policies to control the levels of emissions, namely, two taxation mechanisms and a permit market. We study the effects of these public policies. Moreover, we determine the conditions under which these public policies can implement a Pareto-improving allocation.     

OPEC's Response to International Climate Agreements

This paper studies a game between a group of countries that have agreed to participate in an international climate agreement (the signatories) and OPEC. The purpose of the signatories is to design carbon taxes that maximize their total net income, given a goal on global carbon emissions. As a response to the climate agreement, OPEC imposes an oil tax on its member states that maximizes OPEC's profits. Within a numerical model we find the subgame-perfect equilibrium of a game in which each player chooses when to fix his decision variables. It is shown that in equilibrium the group of signatories chooses to be the leader and OPEC chooses to be the follower. It is demonstrated, however, that for both agents the order of move is of minor (numerical) importance. Hence, the players have limited incentives for strategic behaviour.     

Non-renewable resource Stackelberg games

The market structure for many mineral industries can be described as oligopoly with potential for Stackelberg leadership. This paper derives and analyzes dynamically consistent extraction equilibria in a two-period discrete-time “Truly” Stackelberg (TS) model of non-renewable resource extraction, where firms move sequentially within each period and where both the leader and follower have market power. We show how the leader may be able to manipulate extraction patterns by exploiting resource constraints. Whether the leader wants to speed up its own production relative to the Cournot–Nash (CN) equilibrium depends on the shape of its iso-profit curve, which is affected by the two firms’ relative stock endowments and relative production costs. If the leader extracts faster, then the follower extracts slower, but in aggregate the industry extracts faster. Unlike static Stackelberg games, the follower does not necessarily have a second mover disadvantage.     

跨国多期技术授权方式选择及社会福利分析--基于空间数量歧视竞争的框架

跨国技术授权作为企业获得竞争优势的重要途径已经受到理论界的关注。与以往的内部技术授权研究不同,文章构建了一个外国拥有技术的企业与东道国企业的空间数量歧视竞争模型,考察多期技术授权存在技术泄露、关税内生及空间竞争对外国拥有技术的企业的最优授权策略选择以及东道国社会福利的影响。研究表明：(1)外国拥有技术的企业偏好双重收费方式,且固定收费方式优于特许权收费方式;(2)双重收费方式不能同时实现拥有技术的企业和社会福利的最优,但可以实现社会福利的次优;(3)外国企业应该通过双重收费方式或固定收费方式进行技术授权,而东道国政府不应一味地提高关税水平,适当地降低进口关税有利于跨国技术授权的实现。文章的结论对于发展中国家的技术引进以及技术出口政策的制定具有一定的现实意义。