Effects of fixed and continuously distributed delays in a monopoly model with constant price elasticity

In this paper, we analyze the dynamics of a monopoly model with constant elasticity in which the monopolist faces a form of bounded rationality due to limited accessibility to information. We assume the firm adopts a gradient mechanism to adjust the output level, and we investigate how the introduction of fixed and continuously distributed delays within the resulting continuous-time system may affect the long-run dynamics. We find that the stability of the equilibrium depends on the weighting function adopted to model continuously distributed delays, and the convergence of the realized output toward the steady state is crucially affected by the choice of the delay type which, in turn, reflects the availability and the weight assigned to information. Indeed, depending on the assumptions on modeling delays, the equilibrium point may undergo a Hopf bifurcation after which a limit cycle arises.     

基于伯川德推测变差的有限理性动态寡头博弈的复杂性

本文在具有伯川德推测变差的推测变差模型的基础上,引入参与人的基本有限理性的动态产量调整行为,构建出动态调整系统,论证了企业调整速度在稳定域内时,静态伯川德推测变差均衡仍可作为稳定的动态均衡而实现。并用数值仿真的方法说明了当企业的产量调整速度不在稳定域内时,经济系统将会出现倍周期分岔或混沌等复杂动态。     

A model of the firm in time and space

We consider a multi-plant monopoly that sells to markets which are geographically separated and which stores product over time via an inventory capability. It is assumed that plant average production cost is U-shaped and that, if the output of a plant's production run were sold to a single market at only one point in time, the plant would operate on the falling portion of its average cost curve. Hence, it is in the interest of the firm to aggregate markets, both spatially and temporally, to lower average production cost. We develop the optimal joint interplant spacing-inventory policy. We also consider the effects changes in freight costs, storage costs, and interest charges have on the firm's optimal policy.     

Expectations and industry location: a discrete time dynamical analysis

The new economic geography (NEG) aims to explain long-term patterns in the spatial allocation of industrial activities. It stresses that endogenous economic processes may enlarge small historic differences leading to quite different regional patterns—history matters for the long-term geographical distribution of economic activities. A pivotal element is that productive factors move to another region whenever the anticipated remuneration is higher in that region. Given the long-term nature of NEG analyses and the crucial role of expectations, it is astonishing that most of the existing models assume only naïve or myopic expectations. However, a recent stream of the literature in behavioral and experimental economics shows that agents often use expectational heuristics, such as trend extrapolating and trend reverting rules. We introduce such expectations formation hypotheses into a NEG model formulated in discrete time. This modification leads to a system of two nonlinear difference equations (corresponding, in the language of dynamical systems theory, to a 2-dimensional piecewise smooth map) and thus enriches the possible dynamic patterns: with trend extrapolating (reverting) the symmetric equilibrium is less (more) stable; and it may lose stability only via a flip bifurcation (or also via a Neimark–Sacker bifurcation) giving rise to a period-doubling cascade (or also to quasi-periodic orbits). In both cases, complex behavior is possible; multistability, that is, the coexistence of locally stable equilibria, is pervasive; and border-collision bifurcations are also allowed. In this sense, our analysis corroborates some of the basic insights of the NEG.     

The concept of stable strategic time periods in strategic group research

This paper briefly reviews previous research on strategic groups and concludes that the concept needs further refinement. In particular, strategic grouping studies have typically ignored the influence of time on competitive strategy and have assumed homogeneity in strategic behavior over the time period researched. Therefore, a general analytical method is proposed in order to identify time periods of similarity in strategic behavior—so-called stable strategic time periods. It is argued that following the identification of stable strategic time periods meaningful strategic groupings of companies within industries can be derived and further analysis of the dynamics of strategic group shifts can be performed.     

A model of growth with inherited tastes

This research aims at studying a general equilibrium closed economy with overlapping generations and inherited tastes (aspirations), as in de la Croix (Econ Lett 53(1):89–96, 1996). It shows that the interaction between the intensity of aspirations and the elasticity of substitution of effective consumption affects the qualitative and quantitative long-term dynamics from both local and global perspectives. The related literature is extended by showing that (1) the Neimark–Sacker bifurcation found by de la Croix (1996) does not necessarily give rise to fluctuations and (2) endogenous (long-lasting) fluctuations occur through the emergence of period-doubling bifurcations.     

In pursuit of monopoly power: Recent quantitative work in industrial: Economics

This paper reviews empirical work in industrial organization devoted to the question of inferring the existence of monopoly power from data on observed market outcomes like profits and prices. The discussion covers inter-industry work long conventional in the area, newer developments in intra-industry analysis and case studies, and concludes with some remarks on a small but growing body of work assessing market dynamics. The wide range of studies reviewed all generally reveal that market power exists in many industries.     

On durable goods monopolies and the Coase-Conjecture

Consider the durable goods monopoly game with uniformly distributed consumers' valuations. To establish the Coase-Conjecture in this context takes an infinite time horizon and a negligible delay between market rounds. An infinite time horizon or patience of market participants alone are not sufficient for the Coase-Conjecture, nor is an arbitrarily small delay between price offers within a finite time horizon. Received: 20 March 1996 / Accepted: 15 December 1997     

Identification and estimation of a class of household production models

We consider a class of household production models characterized by a dichotomy property. In these models the amount of time spent on household production does not depend on the household utility function, conditional on household members having a paid job. We analyse the (non‐parametric) identifiability of the production function and the so‐called jointness function (a function describing which part of household production time is counted as pure leisure). It is shown that the models are identified in the two‐adult case, but not in the single‐adult case. We present an empirical application to Swedish time‐allocation data. The estimates satisfy regularity conditions that were violated in previous studies and pass various specification tests. For this data set we find that male and female home production time are q‐substitutes. Copyright © 2003 John Wiley & Sons, Ltd.     

Pricing Experience Goods: The Effects of Customer Recognition and Commitment

In a two‐period model of nondurable experience goods, we compare the profit and social welfare effects of behavior‐based price discrimination (BBPD) and price commitment (PC) (relative to time‐consistent pricing) in a monopoly. We find that when the static, full‐information monopoly price is higher (lower) than the mean consumer valuation, PC yields higher (lower) profits and social welfare than BBPD. We also identify the market conditions under which BBPD does not increase firm profits and provide an explanation as to when the firm should discriminate against its first‐time and repeat customers, respectively.     

The deployment of temporary production workers in assembly operations: a case study of the hidden costs of learning and forgetting

The dynamics of workforce skill levels has a considerable impact on plant-level performance that is commonly overlooked by managers of manufacturing operations. In this study, we present a discrete event simulation model inspired by and validated in an actual manufacturing setting that includes short product life cycles, mid-volume production quantities, and a production environment consisting of assembly, inspection and testing.The effect of worker skill dynamics is analyzed using a factorial experimental design that contrasts the use of temporary versus permanent workers on manufacturing cost performance. The manufacturing costs assessed include labor, inspection and testing. The cost of reworking a defect is captured as an increase in the labor consumption. Materials costs are not assessed. At the core of the analysis, it is assumed that temporary workers have relatively less skill and therefore have higher average production times, higher average defect rates associated with their assembly activity, and lower rates of learning. In addition, the variance of the production time is higher for the temporary workers. Despite these indicators of performance problems, temporary workers may be used because of the considerably lower wage rate compared to permanent employees.Our in-depth case analyses shows that assigning skilled permanent workers to upstream build operations was superior to other policies deploying temporary workers, regardless of lot size or product complexity. Attesting to the importance of the labor mix component of manufacturing strategy, workforce deployment policies tended to dominate product switching frequency (a proxy variable for lot size and product mix) in impacting costs.     

A panel model for political efficacy and responsiveness: an application of LISREL 7 with weighted least squares

Political efficacy is considered to be one of the most important attitudes in theories of political participation and democratic politics. It has been assumed that political efficacy is a stable, persistent orientation rather than a transient attitude. Several studies have examined the stability of political efficacy over time. In most of these studies, based on the analysis of the traditional SRC items, the stability assumption has been questioned. In this paper, we reconsider the stability issue but we adopt a different approach. We distinguish between two components of political efficacy: internal efficacy, a personal attribute and responsiveness, a system attribute, and we study their stability over time. To study the stability of political efficacy and responsiveness over time, we analyse the data with PRELIS and we develop a panel model using LISREL 7. As the observed variables are only ordinal, the estimation of the parameters of the model is based on polychoric correlations and on the weighted least squares method. Our analysis makes use of the Political Action Survey panel data for the USA. This data contains the six SRC efficacy items measured at two occasions. We find that the stability coefficients are higher than those reported in previous research. The difference in the values of the stability coefficients for each component seems to indicate that the personal component is more stable than the system component.     

Bifurcations in regional migration dynamics

The tomahawk bifurcation is used by Fujita et al. [Fujita, M., Krugman P., Venables A.J., 1999, The Spatial Economy: Cities, Regions, and International Trade, MIT Press: Cambridge, MA.] in a model with two regions to explain the formation of a core–periphery urban pattern from an initial uniform distribution. Baldwin et al. [Baldwin, R., Forslid, R., Martin, P., Ottaviano, G.I.P., Robert-Nicoud, F., 2003, Economic Geography and Public Policy, Princeton University Press: Princeton, NJ.] show that the tomahawk bifurcation disappears when the two regions have an uneven population of immobile agricultural workers. Thus, the appearance of this type of bifurcation is the result of assumed exogenous model symmetry. We provide a general analysis in a regional model of the class of bifurcations that have crossing equilibrium loci, including the tomahawk bifurcation, by examining arbitrary smooth parameter paths in a higher dimensional parameter space. We find that, in a parameter space satisfying a mild rank condition, generically in all parameter paths this class of bifurcations does not appear. In other words, conclusions drawn from the use of this bifurcation to generate a core–periphery pattern are not robust.     

On a class of correlated queueing problems

This paper deals with a steady state behaviour of a discrete time, single channel, first come first served, finite space queueing problem. It is assumed that the departure probabilities depend on the queue length and that the departure at two consecutive time marks are correlated. The arrivals at two consecutive time marks are statistically independendent. However, the arrival probabilities are assumed to depend on the queue length. A few particular cases have also been discussed.     

Industrial location and rising energy prices: A case of bilateral monopoly

The purpose of this paper is to extend Sakashita's analysis to a case of bilateral monopoly and to examine the possibility of intermediate location for two industries as well as the impact of rising energy prices on the patterns of industrial location. It will be shown that the results derived in this paper are quite different from the ones obtained by Sakashita (1980).     

New methods for analyzing structural models of labor force dynamics

The economic theory of decision-making under uncertainty is used to produce three econometric models of dynamic discrete choice: (1) for a single spell of unemployment; (2) for an equilibrium two-state model of employment and non-employment; (3) for a general three-state model with a non-market sector. The paper provides a structural economic motivation for the continuous time Markov (or more generally ‘competing risks’) model widely used in longitudinal analysis in biostatistics and sociology, and it extends previous work on dynamic discrete choice to a continuous time setting. An important feature of identification analysis is separation of economic parameters that can only be identified by assuming arbitrary functional forms from economic parameters that can be identified by non-parametric procedures. The paper demonstrates that most econometric models for the analysis of truncated data are non-parametrically under-identified. It also demonstrates that structural estimators frequently violate standard regularity conditions. The standard asymptotic theory is modified to account for this essential feature of many structural models of labor force dynamics. Empirical estimates of an equilibrium two-state model of employment and non-employment are presented.     

Quantity and price controls by the firm under demand uncertainty and welfare implications

A monopoly facing an uncertain demand can affect its profit distribution through the choice of ex ante controls. This paper compares two modes of behavior - price-setting and quantity-setting - in the context of a mean-variance model. The main results are: (a) With nonlinear cost, the monopoly will not be indifferent between the two modes. In the particular case of quadratic cost, conditions for the dominance of price-setting over quantity-setting behavior are derived. (b) Whereas it is well-known that the risk averse, quantity-setting monopoly will produce less under uncertainty than under certainty (or risk neutrality), the price-setting monopoly increases its expected output when faced by uncertain demand, possibly exceeding even the competitive output under uncertainty. (c) Using expected social surplus as a welfare criterion, price-setting emerges as the welfare-dominant behavior when there is a conflict between the privately and the socially preferred modes. (d) Finally, there exist conditions where price-setting monopolies welfare-dominate a competitive industry facing the same random demand.     

Exact linear rank tests for two‐sample equivalence problems with continuous data

The present paper introduces a methodology for the semiparametric or non‐parametric two‐sample equivalence problem when the effects are specified by statistical functionals. The mean relative risk functional of two populations is given by the average of the time‐dependent risk. This functional is a meaningful non‐parametric quantity, which is invariant under strictly monotone transformations of the data. In the case of proportional hazard models, the functional determines just the proportional hazard risk factor. It is shown that an equivalence test of the type of the two‐sample Savage rank test is appropriate for this functional. Under proportional hazards, this test can be carried out as an exact level α test. It also works quite well under other semiparametric models. Similar results are presented for a Wilcoxon rank‐sum test for equivalence based on the Mann–Whitney functional given by the relative treatment effect.     

Inaccurate Approximation in the Modelling of Hyperinflations

In time series macroeconometric models, the first difference in the logarithm of a variable is routinely used to represent the rate of change of that variable. It is often overlooked that the assumed approximation is accurate only if the rates of change are small. Models of hyper-inflation are a case in point, since in these models, by definition, changes in price are large. In this letter, Cagan’s model is applied to Hungarian hyper-inflation data. It is then demonstrated that use of the approximation in the formation of the price inflation variable is causing an upward bias in the model’s key parameter, and therefore an exaggeration of the effect postulated by Cagan.     

Nonparametric identification in nonseparable panel data models with generalized fixed effects

This paper extends the familiar notion of fixed effects to nonlinear structures with infinite-dimensional unobservables, like preferences. The main result is that a generalized version of differencing identifies local average responses (LARs) in nonseparable structures. In contrast to existing results, this does not require either substantial restrictions on functional form or independence between the persistent unobservables and the explanatory variables of interest, and it requires only two time periods. On the other hand, the results are confined to the subpopulation of “stayers” (Chamberlain, 1982), i.e., the population for which the explanatory variables do not change over time. We extend the basic framework to include time trends and dynamics in the explanatory variables, and we show how distributional effects as well as average partial effects are identified. Our approach also allows endogeneity in the transitory unobservables. Furthermore, we show that this new identification principle can be applied to well-known objects like the slope coefficient in the semiparametric panel data binary choice model with fixed effects. Finally, we suggest estimators for the local average response and average partial effect, and we analyze their large- and finite-sample behavior.