Mixed markets in bilateral monopoly

Should we expect to see patterns in the privatization of a public bilateral monopoly? To address this question, the paper analyzes the welfare implications of privatization and examines the interplay of firm location in the vertical stream, differential priorities on private and public profit in welfare and cost asymmetries in a mixed bilateral monopoly. We conclude that merely comparing cost savings from privatization upstream/downstream, is inadequate. If public profit is relatively insignificant in welfare, then only relative cost savings matter. However, if public profit is sufficiently important, then privatization downstream will maximize welfare if it is as (or more) cost effective compared to privatization upstream. We find that downstream privatization can be better than upstream privatization even when the latter is more cost effective than the former.     

Perfect competition in an oligopoly (including bilateral monopoly)

We show that if limit orders are required to vary smoothly, then strategic (Nash) equilibria of the double auction mechanism yield competitive (Walras) allocations. It is not necessary to have competitors on any side of any market: smooth trading is a substitute for price wars. In particular, Nash equilibria are Walrasian even in a bilateral monopoly.     

Cooperative choice of corporate social responsibility in a bilateral monopoly model

This article presents an examination of a linear bilateral monopoly model with endogenous and cooperative choice of corporate social responsibility (CSR) level. This article also describes an investigation of the effects of cooperative choice of CSR on the market and welfare. New findings are explicit derivation of the necessary and sufficient condition for solving a double marginalization problem in the bilateral monopoly model with CSR. In addition, this report is the first demonstrating that cooperative CSR with Nash bargaining improves consumer surplus, social welfare and each firm’s profit to a level higher than that achieved through noncooperative CSR. Furthermore, cooperative CSR with Nash bargaining is shown to be capable of completely solving the double marginalization problem generated by a bilateral monopoly, although the manufacturer and the retailer are not vertically integrated.     

A note on allocations attainable through nash equilibria

This note reexamines the issue of attaining efficient resource allocations as noncooperative equilibria of a strategic game. Contrary to the spirit of earlier work on this subject, it is shown that there is an entire class of choice rules, aside from the Walrasian one, which are implementable in Nash equilibrium stategies.     

A full characterization of nash implementation with strategy space reduction

The paper fully characterizes the class of Nash implementable social choice correspondences (SCCs) by mechanisms endowed with Saijo’s message space specification— $s$ -mechanisms. This class of SCCs is equivalent to the class of Nash implementable SCCs, though any game form involving ‘one less’ preference announcements breaks this equivalence relationship down.     

合作学习的应用策略及常见问题解决

随着教师教育改革的推进,合作学习方式引入小学职前教师教育课堂,对提高课堂学习效果、培养师范学生的合作精神和创新意识、促进师范生的主体性发展很有裨益.但是,在应用合作学习的过程中也发现许多问题,为避免合作无效等情况,运用合作学习时,教师要注意科学的应用策略,掌握常见问题的解决方法.     

Insurance monopoly and renegotiation

Summary The mechanism design problem of a monopoly insurer — faced with privately informed insurees — is considered. It is assumed that the insurer cannot commit not to renegotiate (by using the information that customer separation reveals) before contracts are put into force. A solution is offered by modeling renegotiation-proofness in a framework inspired by Greenberg's theory of social situations. Maximizing profit within the set of renegotiation-proof outcomes always leads to a semi-separating outcome (i.e. neither full pooling nor full separation can occur) and may leave all low-risks as well as some of the high-risks self-insured.This work originated with Asheim and Nilssen (1991). The authors thank Paul Beaudry, Mathias Dewatripont, John Hillas, Terje Lensberg, Georg Nöldeke, Trond Olsen, Michel Poitevin, Eric van Damme, and especially Joseph Greenberg, as well as participants at seminars in Bergen, Cambridge, Florence, Helsinki, London, Mons, Montreal, Oslo, Stony Brook, and Tilburg for helpful comments and discussions. Asheim thanks Tilburg (CentER), McGill and Humboldt Universities for their hospitality and acknowledges support from the Norwegian Research Centre in Organization and Management and the Norwegian Research Council. Nilssen acknowledges support from Norges Bank and the Norwegian Research Council for Science and the Humanities.     

A note on the value of public information in monopoly

The paper shows that in the standard model of monopoly with asymmetric information and second-degree price discrimination, the monopolist prefers to reveal public information under a form of stochastic dependence that is weaker than the affiliation of private values, private signals, and public signals.      

Implementing cooperative solution concepts: a generalized bidding approach

This paper provides a framework for implementing and comparing several solution concepts for transferable utility cooperative games. We construct bidding mechanisms where players bid for the role of the proposer. The mechanisms differ in the power awarded to the proposer. The Shapley, consensus and equal surplus values are implemented in subgame perfect equilibrium outcomes as power shifts away from the proposer to the rest of the players. Moreover, an alternative informational structure where these solution concepts can be implemented without imposing any conditions of the transferable utility game is discussed as well. The authors thank Yukihiko Funaki, Andreu Mas-Colell, David Pérez-Castrillo and Jana Vyrastekova for helpful discussions. We also appreciate the comments from the seminar and conference participants at Keele University, Tilburg University, University of Haifa, University of Warwick, CORE at Louvain-la-Neuve, Catholic University Leuven, Pablo de Olavide University in Seville, University of Vigo, the 2006 Annual Conference of the Israeli Mathematical Union in Neve Ilan, Israel, and the 61st European Meeting of the Econometric Society in Vienna, Austria in 2006. In particular, we are grateful to the associate editor and an anonymous referee. Their valuable comments and constructive suggestions contributed to a significant improvement of the paper. Wettstein acknowledges the financial support of the Pinchas Sapir Center for Development in Tel Aviv University.     

Planned obsolescence and monopoly undersupply

This paper examines the welfare implications of planned obsolescence in situations where the traditional monopoly undersupply exists. We find that the monopolist’s introduction of incompatibility between successive generations of products alleviates the monopoly undersupply problem and may therefore generate higher social welfare than compatibility. Paradoxically, the stronger the network effects, the more likely welfare will increase as a result of incompatibility. Our result also extends to two-sided markets characterized by indirect network effects.     

Natural monopoly and differential pricing

Under uniform pricing a monopolist cannot make a positive profit in equilibrium. I analyze how differential pricing can be exploited by a natural monopolist to deter entry when entry is costless. In a two-stage game with price competition before quantity competition I show that the incumbent firm can deter entry and make a positive profit in equilibrium. The incumbent sets two different prices, the low price to deter entry and the high price to generate profit. Entry is not possible because of scale effects. If dumping is allowed for all firms no positive profits are realizable, but welfare is reduced. I show that for some parameter values the incumbent is forced to engage in a stunt (i.e., set a negative low price) to keep entrants out.     

Corporate monopoly power and risk

The relationship between monopoly power and concentration may be influenced by the ‘riskiness’ of the firm. Two related issues are considered in this paper: the impact of market structure and conduct on the risk of the firm and the impact of risk upon the relationship between profitability and concentration. An a priori relationship between risk, market structure and profitability is derived within the mean-variance framework of the Capital Asset Pricing Model.     

A comparison between the core and the monopoly solutions in a mixed exchange economy

Summary. Using a mixed market model for analyzing imperfectly competitive economies, we maximize the oligopolists' Welfare Function, given individual rationality and feasibility constraints. We prove that solutions belong to the core for a large class of economies. This class includes, in particular, every monopoly having a single type of small traders. Note that all such solutions yield the large trader, utility-wise, strictly more than at any monopoly solution, where the monopolist plays strategically, and the ocean of small traders act as being as price-takers. Received: March 4, 1996; revised version July 7, 1996     

OPEC and the monopoly price of world oil

The paper presents a dynamic model of the behavior of OPEC viewed as a monopolist sharing the oil market with a competitive sector. The main conclusion is that the recent increase in the price of oil was a once and for all phenomenon due to the formation of the cartel and that prices should remain approximately constant during the next twenty years.