Stackelberg price leadership in spatial competition

This paper examines Stackelberg price leadership in a spatially competitive model with infinitely many stores on an infinite line. A Stackelberg price leader charges significantly more than the pure Nash equilibrium price, induces its neighbors to charge somewhat more than the pure Nash equilibrium price, and increases its profits. Under Nash equilibrium, collusion of two stores makes a difference to prices only if the colluding stores are nearest neighbors. Under Stackelberg price leadership, collusion makes a difference to prices even if the stores are not nearest neighbors.     

A price leadership model for merger analysis

We provide a methodology to simulate the coordinated effects of a proposed merger using data commonly available to antitrust authorities. The model follows the price leadership structure in Miller, Sheu, and Weinberg (2021) in an environment with logit or nested logit demand. The model calibration leverages profit margin data to separately identify the extent of coordinated pricing from marginal costs. Using this framework, we demonstrate how mergers can shift incentive compatibility constraints and thereby lead to adverse competitive effects. The incentive compatibility constraints also affect the extent to which cost efficiencies and divestitures mitigate competitive harms.     

On the nature and significance of collusive price leadership

With the help of a simple analytical model we are able to analyze and to further clarify the conditions for collusive price leadership as they were originally devised by Jesse Markham. Within the confines of this model we show how collusion increases price-cost margins, but at the same time decreases concentration in the industry.     

Identifying airline price discrimination and the effect of competition

Empirical studies exploring the relationship between competition and price discrimination don’t generally consider the role of product differentiation or the asymmetric adoption of discrimination across firms. Using a customized empirical approach to examine the use of Saturday-night stayover discounts in the U.S. airline industry, I show that discounts are used more often when facing competitors that offer differentiated products but less often when competing with firms that don’t use discounts. Legacy carriers rarely use discounts when competing with Southwest or other low-cost carriers, but the presence of competing legacy carriers sometimes enhances the use of discounts.     

Identifying customer behavioral factors and price premiums of green building purchasing

In recent years, global urbanization and overdevelopment have resulted in environmental degradation and an energy crisis. Promoting green buildings is among the most effective methods for achieving environmental sustainability. Although the initial costs of green buildings are higher than those of ordinary buildings, people perceive that the environmental benefits of green buildings justify their higher price premiums. From a developer's perspective, devising optimal pricing strategies according to customer-perceived prices and developers' expected profit is complex and difficult. Hence, in this study, we developed a framework based on the Howard–Sheth model of consumer behavior to identify behavioral factors that may affect consumer purchases of green buildings. An artificial neural network (ANN) was then used to develop a pricing model for predicting the price premiums of green buildings. The results revealed that the ANN model's overall prediction capability was 94%; the model's robustness was demonstrated by comparing the results produced using the model with those produced using a multiple regression analysis. In addition, the characteristics of consumers who were willing to accept higher price premiums for green buildings were identified and discussed. The proposed model can be applied as an effective decision-support tool for green building pricing and formulating marketing strategies.     

Endogenous price commitment,sticky and leadership pricing: Evidence from the Italian petrol market

This article studies dynamic pricing strategies in the Italian gasoline market before and after the market leader unilaterally announced its commitment to adopt a sticky-pricing policy. Using daily Italian firm level prices and weekly average EU prices, we show that the effect of the new policy was twofold. First, it facilitated price alignment and coordination on price changes. After the policy change, the observed pricing pattern shifted from cost-based to sticky-leadership pricing. Second, using a dif-in-dif estimation and a synthetic control group, we show that the causal effect of the new policy was to significantly increase prices through sticky-leadership pricing. Our paper highlights the importance of price-commitment by a large firm in order to sustain (tacit) collusion.     

Transformational leadership and gatekeeping leadership: The roles of norm for maintaining consensus and shared leadership in team performance

This study focuses on shared leadership in Japanese R&D teams. The effects of both transformational and gatekeeping leaderships of formal leaders on shared leadership are examined. Moreover, the effect of shared leadership on R&D team performance is examined. Hypotheses are tested with a sample of 654 researchers working in 119 R&D industrial research teams in Japan. Results show that transformational leadership has a negative effect on shared leadership through the norm for maintaining consensus such that it positively influences the norm, which in turn negatively influences shared leadership. In contrast, gatekeeping leadership has a direct as well as an indirect positive impact on shared leadership through the norm for maintaining consensus such that it negatively influences the norm, which in turn negatively influences shared leadership. In addition, this study finds that shared leadership positively influences R&D team performance. These results suggest that leadership displayed by team members and that by formal leaders significantly influences team performance. The results are discussed in the context of the unique Japanese work environment.     

Collusion and leadership

The paper explores the role of price or quantity leadership in facilitating collusion. It extends the standard analysis of tacit collusion by allowing firms to make their strategic choices either simultaneously or sequentially. It is shown that price leadership indeed facilitates collusion by making it easier to punish deviations by the leader. In case of pure Bertrand competition, price leadership restores the scope for (perfect) collusion in markets where collusion would not be sustainable otherwise. When firms face asymmetric costs or offer differentiated products, price leadership can also enhance the profitability of collusion—in case of asymmetric costs, the less efficient firm must act as the leader. Finally, such leadership is less effective in case of Cournot competition since, following an aggressive deviation by the leader, the follower would rather limit its own output, making it more difficult to punish the deviation. Still, quantity leadership may enhance collusion when it is already somewhat effective in a simultaneous move setting.     

Foundation of leadership in Asia: Leader characteristics and leadership styles review and research agenda

Leader characteristics influence leadership styles, which cascade down through the management to the entire firm, affecting organizational and strategic outcomes. Asia’s unique socio-cultural contexts and philosophies breed indigenous leadership styles in the region, yet context-specific research on leader characteristics and leadership styles in Asia has been sparse. Our review answers the call to identify the distinct Asian context that has distinguished the leadership research in Asia from that of other regions. We identify power distance orientation and collectivist culture as the two of the most prominent contextual factors to consider in examining the role of leadership in Asia. Through this review, we aim to further our understanding of the current state of extant literature on leader characteristics and leadership styles and to suggest new avenues for scholars in Asia to advance existing theories of leadership research in the arena of organizational behavior and strategy.     

The role of farmer organizations in supplying supermarkets with quality food in Vietnam

The development of supermarkets in Vietnam, as in other emerging countries, is accompanied by increasing consumer concern for food quality. This paper investigates whether farmer organizations are able to help small-scale farmers obtain access to supermarkets as well as examines the role that supermarkets and public support play in the emergence and development of these organizations. The paper is based on case studies of a number of stakeholders marketing vegetables, flavored rice and litchi fruit in Vietnam. Eight farmer groups operating in the form of private commercial organizations act as regular supermarket suppliers for the selected products. Their ability to supply supermarkets is related to the combination of functions they make available to their members, especially with regard to promoting and controlling quality for which they receive public support. Their participation in flexible contracts with supermarkets, shops and schools is also a key issue. Supplying supermarkets via farmer associations increases farmers’ profits per kilo compared to traditional chains, but the quantities supplied to supermarkets remain limited. The paper argues that changes in farmer organizations are not primarily due to supplying supermarkets, but rather to public and international support for food quality improvement which has been of benefit to supermarkets.     

Traditional food traders in developing countries and competition from supermarkets: Evidence from Indonesia

Indonesia’s urban centers recently underwent an explosion of supermarkets. With cheaper, higher quality commodities and better services, supermarkets have the potential to drive traders in traditional markets out of business. In this paper, we evaluate whether this is indeed the case. We find that traditional traders experienced declines in their business. However, both qualitative and quantitative findings indicate that the main cause of decline is not supermarkets. Instead, traditional markets are plagued with internal problems and face increasingly bitter competition from street vendors. Therefore, the policy recommendations include strengthening traditional traders and seriously tackling the problem of street vendors.     

Product improvement and leadership in differentiated markets

This paper examines the persistence of market leadership when firms invest nonexclusively in product-improving R&D prior to competing in a differentiated Bertrand market. The analysis establishes that whether a leader maintains its position depends on the nature and extent of differentiation. While a leader in a horizontally differentiated market always becomes increasingly dominant as a result of its investment, there exist equilibria in which a leader in a vertically differentiated market loses its position.     

Evolution and challenges of dairy supply chains: Evidence from supermarkets,industries and consumers in Ethiopia

In developing countries the demand for products of animal origin is expected to grow rapidly in the coming years. Using data collected from 200 urban households this study examines the evolution of the dairy market in Ethiopia. In particular, this study suggests that although the Ethiopian dairy market remains extremely thin and volatile, the commercialization of processed dairy products through supermarkets is expanding and is expected to keep doing so in the foreseeable future. Increasing urbanization and corresponding changes in consumer preferences, behaviour and purchasing power are the identified causes for the rise of supermarket-processor dairy chains. This study shows also that emerging dairy chains provide new market opportunities to Ethiopian farmers, but the existence of retail-industrial monopolies and monopsonies jeopardize farmers’ economic benefits to a great extent. The study concludes with some implications for policy and further research.     

Research Note: Identifying the Invisible Colleges of the British Journal of Industrial Relations: A Bibliometric and Social Network Approach

The academic field of industrial relations has gone through much change in the last 20 years. On account of the rapid decline in union membership in the USA and the UK, industrial relations, which historically has focused on the employment relationship, has been searching for a new intellectual base. By conducting a bibliometric analysis of the journal British Journal of Industrial Relations (BJIR), we uncover the intellectual bases for that publication outlet for two time periods, 1986–1995 and 1996–2005. From the late 1980s to the mid‐1990s, BJIR's articles relied on the economics literature, while in the later period, it moved to the human resource and management journals, authors and articles. The possible explanations and implications of these findings are discussed.     

Central American supermarkets’ private standards of quality and safety in procurement of fresh fruits and vegetables

In the context of near-absence of public food safety and quality standards, or the lack of effective implementation of them where they exist, and in order to increase product quality and consistency and differentiate their product from traditional produce retailers, leading supermarket chains in Central America are imposing private standards on their fresh produce suppliers. These are mainly for cosmetic quality, but emerging also are standards for fresh produce safety, in particular for leafy greens and some fruit. They are implementing the private standards at the same time they are cutting costs in order to compete with wetmarkets, via organizational change in the leading chains’ procurement systems (shifting away from use of spot markets and traditional wholesale systems toward centralized purchases and use of implicit contracts and specialized/dedicated wholesalers). They are coupling those changes with some actions to resolve idiosyncratic factor market failures facing farmers such as through provision of technical assistance. The implementation of these private standards of produce safety are good for consumers as they are among the few food safety practices by domestic food industry actors. But the tougher standards are a challenge for producers who need to make significant investments, implying the need for investment assistance and support services by governments. The paper presents field study findings for Costa Rica, Guatemala, El Salvador, Honduras, and Nicaragua from 2002 to 2004.     

Jeong exchange and collective leadership in Korean organizations

How does the Korean management system work with open interaction and without excessive power abuse, in spite of the emphasis on authority and hierarchy in Korean society? This paper explicates the concept of jeong exchange, an emotional support mechanism based on informal social ties, as the basis of social capital in Korean collectives (woori). Jeong exchange is first described and then contrasted with related concepts in the other major Confucian societies of China and Japan. It is then used to develop the notion of “collective leadership” to describe the nature and process of Korean leadership.     

Cost leadership strategy and experience curves

Investing in cost leadership by rapidly riding down the experience curve is a common way to establish a firm's competitive advantage. Its success depends, in part, on the factors that underlie the experience curve. In this paper we make the distinction between cost declines that occur at any point in time and cost declines that may occur over time. This leads us to consider a revised experience concept in which the dynamic interrelationship between a firm's production rate, cumulative production and unit cost is explicitly considered. We provide a detailed analysis of various scale-learning relationships and their strategic implications for establishing competitive advantage through an investment in cost leadership. We also prove analytically that such investment should take place only in the presence of learning.     

The impact of price adjustment costs on price dispersion in e-commerce

We analyze price dispersion using panel data from a large price comparison site. We use past pricing behavior to instrument for potential endogeneity of firms to select into certain product markets. Our main result is that greater price adjustment costs result in greater price dispersion even in e-commerce markets where price adjustment cost are thought to be negligible. Although the impact of price adjustment costs on price dispersion became weaker over time, the causal effect of price adjustment costs on price dispersion is still present at the end of our observation period. Our results are robust to many alternative empirical specifications. We also control for a range of alternative explanations of price dispersion, such as search cost, service differentiation, obfuscation, vertical restraints, and market structure.