Access Prices for Rail Infrastructure

Separation of railway infrastructure, a natural monopoly, from a contestable train operator industry raises policy options for setting the infrastructure access fee and for regulation of the infrastructure supplier. Marginal cost, average cost. Ramsey prices and multipart tariff rules for access fees are assessed. Recognizing the importance of train operator entry decisions, a single access fee per gross tonne kilometre based on a mark-up of marginal cost is favoured. An independent regulator and the use of price ceilings on the infrastructure supplier are proposed.     

Import sensitive products and perverse tariff‐rate quota liberalization

Abstract This paper shows that a Tariff‐Rate‐Quota's (TRQ) minimum access expansion can perversely trigger domestic price increases. Often, TRQs have prohibitive over‐quota tariffs to mimic import quotas in providing minimum market access. In the WTO's Doha Round, it is likely that countries using TRQs will avoid aggressive tariff reductions if they increase the quota portion of TRQs. We show that when the import price lies between the unit cost of production and the price received by domestic upstream firms, an increase in import quota as a share of domestic production may cause an increase in the domestic retail price.     

COMPETITIVE LONG RUN INDUSTRY EQUILIBRIUM AND FACTOR-PRICE UNCERTAINTY*

In this paper we have considered competitive long run industry equilibrium with factor-price uncertainty. We discussed the long run equilibrium output of firms with risk neutrality, output price and their responses to changes in uncertainty, factor price and industry demand. In the first part of this paper we have derived a result that, given risk neutrality, the firms operate at proper capacity, i.e. where expected long run marginal cost is equal to expected long run average cost, as shown in the case of output-price uncertainty. This result is, however, different from that obtained from Sheshinski and Dréze (1976). From the comparative static analysis we first discovered that even under risk neutrality factor-price uncertainty affects the long run industry equilibrium: that is, a mean preserving increase in uncertainty leads firm's to enter the industry, because they can decrease expected long run costs as the variability of factor price increases. Consequently, output price goes down. In contrast, firm size is kept invariable in response to its increase as long as the cost function is separable, i.e. the separability of the cost function holds when production functions are the Cobb-Douglas and CES types used commonly in empirical work, although firm size might, generally, be affected by the increase. It is an interesting fact that firm size and industry size will express different responses to a change in risk. The result that the long run industry equilibrium with cost uncertainty is explicitly affected is a sharp contrast to the result under output-price uncertainty and provides a new aspect for understanding about the behaviour of the industry with uncertainty. Secondly, increased factor-price causes the number of firms in the industry to decline and output price to rise. In addition, firm's size will expand with its increase if that factor is inferior, while the effect on firm size is ambiguous if it is normal. The firm's output, i.e. firm size, is, however, kept constant if the cost function is separable. Thirdly, the long run equilibrium output of the firm remains intact but the number of firms increases as industry demand rises. This result holds, regardless of the firm's attitude towards risk. Finally, we find throughout the paper that the functional form of the cost function plays a significant role in determining the behaviour of the industry with factor-price uncertainty.     

我国进一步推进水价改革的思考

随着工业化和城市化的发展,供水成本的不断上升和水资源的日益稀缺已经成为经济社会发展的一大障碍。水价政策能够在解决这些问题上发挥重要的作用。无论是工业和服务业用水、城市居民用水还是农业用水,其价格都应该体现水资源成本、供水成本和环境成本。水价改革必须在确定保障正常生产生活的基本用水量的基础上,通过水资源成本和环境成本在水价格中的充分体现,兼顾水企业和用水主体的利益,达到节约用水和水资源环境可持续发展的目的。     

Licensing a quality-enhancing innovation to an upstream firm

This paper examines the case where a patent holder who is not a producer licenses its quality-enhancing innovation to an upstream firm, which sells its product through a downstream monopoly. It is found that the patent holder prefers a two-part tariff contract, which includes both a fixed-fee and per-unit output royalty. However, the royalty included in the licensing contract makes each firm price at a markup over marginal cost and therefore makes both consumers and the society worse off, if the innovation is small and the supplier is weak. From a welfare perspective, licensing by means of an ad valorem tax is more efficient, as it allows the upstream firm to be less aggressive when trading with the downstream firm.     

On the comparison of price and quantity competition under endogenous timing

This paper compares Bertrand and Cournot equilibria in a differentiated duopoly with linear demand, and asymmetric constant marginal cost under endogenous timing. It shows that endogenous timing leads to two sequential play with both leader–follower configurations in Bertrand, but simultaneous play in Cournot. Moreover, every firm’s mark-up/output ratio and the two firms’ weighted ‘average’ price are all lower, but the two firms’ weighted ‘average’ output is higher in either of the two sequential Bertrand equilibria than in the simultaneous-move Cournot equilibrium.     

客户股价崩盘风险对供应商具有传染效应吗?

文章利用手工整理的2007?2013年800对客户与供应商均为上市公司的供应链公司数据,探讨了客户股价崩盘风险是否会通过密切的供应链关系传染给供应商.研究发现:(1)客户股价崩盘风险对供应商具有传染效应,且这一传染效应主要出现在供应商自身抗风险能力不足时.(2)客户与供应商的关系越重要、越专有、越稳定、越良性,客户股价崩盘风险对供应商的传染效应越强.这表明由于密切的经济联系,当客户股价崩盘风险较高时,供应商可能会受牵连而发生崩盘.文章的研究为传染文献提供了新的适用情形,也展示了客户影响供应商的独特路径,从而丰富了传染效应和客户供应商关系的相关文献.     

Access profit-sharing regulation with information acquisition and transmission

This paper analyses how information acquisition and transmission on the upstream cost affect the optimal access profit-sharing plan and the regulator’s choice of an information transmission regime in network industries characterized by a regulated upstream monopoly with cost uncertainty and an unregulated downstream duopoly. When the regulator obliges the upstream monopolist to transmit information to a downstream rival, the adoption of an access profit-sharing plan may boost his/her incentives to acquire information. It will be shown that the optimal access profit-sharing plan under information transmission depends on the variance and shape of cost distribution. Moreover, an information transmission regime proves to be welfare preferable to a regime with no information transmission only if it induces information acquisition and if the regulator is significantly concerned about firms’ profits.     

Economic geography and wages in Brazil: Evidence from micro-data

This paper estimates the impact of market and supplier access on wage disparities across Brazilian states, incorporating the control for individual characteristics into the new economic geography methodology. We estimate market and supplier access disaggregated by industry, and we compute access to local, national and international markets separately. We find a strong correlation between market access and wage differentials, even after controlling for individual characteristics, market access level (international, national or local), and using instrumental variables.     

Using Market Structure to Regulate a Vertically Integrated Monopolist

A natural monopolist whose cost is private information produces a good which is combined with another good that can be produced by the monopolist or by other firms. The agency that regulates the monopolist can impose any of several different market structures in the industry: integrated monopoly, vertical separation with free entry downstream, or liberalization downstream (both integrated and independent production). When several firms produce downstream, a Cournot quantity-setting game with free entry determines the market price. We derive the optimal contracts to offer the monopolist under all three market structures and examine the influence of downstream cost differences on access prices.We then study the optimal regulatory policy where the regulator can condition the downstream market structure on the monopolist's cost report to the regulator. The optimal regulatory policy awards a monopoly to a low-cost upstream firm, but requires free entry downstream if the monopolist reports high upstream costs. Thus, the choice of market structure is an additional tool to limit rent extraction by the monopolist. Simulation analysis reveals the possibility of significant welfare gains from this additional regulatory tool.     

Product and process innovations in the life cycle of an industry

Filson [Rev. Econ. Dyn. 4 (2001)] uses industry-level data on firm numbers, price, quantity and quality along with an equilibrium model of industry evolution to estimate the nature and effects of quality and cost improvements in the personal computer industry and four other new industries. This paper studies the personal computer industry in more detail and shows that the model explains some peculiar patterns that cannot be explained by previous life-cycle models. The model’s estimates are evaluated using historical studies of the evolution of the personal computer industry and patterns that require further model development are described.     

报童投资组合模型中的批发价契约设计

当风险规避型报童的订货资金有限,却有多种产品可供订购时,供应商需要设计恰当的契约,以引导报童的订货行为,实现最大化自身收益的目的。针对上述问题,本文运用投资组合理论处理报童的决策问题;在此基础上建立了供应商与报童之间的博弈模型,设计了求解最优批发价契约的算法;通过数值算例,说明了最优契约的求解过程。结果表明,与未经优化而随机选择的契约相比,基于该算法求得的契约显著提升了供应商的期望收益。     

The effects of abandonment options on operating leverage and forward hedging

This paper examines the behavior of the competitive firm under output price uncertainty when the firm is endowed with an abandonment option and has access to a forward market for its output. When the realized output price is less than its marginal cost, the firm optimally exercises its abandonment option and ceases production. The firm lets its abandonment option extinguish, thereby producing up to its capacity, only when the realized output price exceeds its marginal cost. The ex post exercising of the abandonment option as such convexifies the firm's ex ante profit with respect to the random output price. We show that neither the separation theorem nor the full-hedging theorem holds in the presence of the abandonment option. The firm under-hedges its output price risk exposure in the forward market wherein the forward price contains a nonpositive risk premium. When the set of hedging instruments is expanded to include options, we show that both the separation and full-hedging theorems are restored. We further show that the firm prefers options to forwards for hedging purposes when both types of contracts are fairly priced.     

BERTRAND Vs. COURNOT COMPETITION WITH UPSTREAM FIRM INVESTMENT

This paper compares Bertrand and Cournot competition in a vertical structure in which the upstream firm sets the input price and makes R&D investments. We show that from the downstream firms’ point of view, Cournot competition has the advantage of a more monopolistic effect, leading to the setting of a higher price, but has the disadvantage of inducing a lower incentive for the upstream firm to invest. On the other hand, Bertrand competition has the advantage of providing a greater incentive for the upstream firm to invest but has the disadvantage of a more competitive effect, leading to the setting of a lower price. Our main findings are as follows. First, R&D investment level is greater under Bertrand competition than under Cournot competition. Second, from the standpoint of the upstream firm and industry, Bertrand competition is more efficient than Cournot competition. Third, from the standpoint of the downstream firms, Bertrand competition is more efficient than Cournot when investment is sufficiently efficient and products are sufficiently differentiated.     

MEASURING THE PRICE OF RESEARCH AND DEVELOPMENT OUTPUT

We construct a price index for the scientific R&D services industry, a significant producer of R&D in the United States. Unlike most previous R&D price indexes, our index is not based on input costs but rather on measures of R&D sales. Consequently, unlike input‐cost price indexes, our output‐based index is able to account for changes in productivity and markups in the scientific R&D services industry. We compute that scientific R&D services prices increased, on average, by 7.14 percent at an annual rate from 1987 to 2006. Using our index, we find that real revenues grew at an annual average rate of 2.85 percent. We then propose using our index, in combination with an input‐cost price index, to deflate total R&D nominal expenditures. We find that real total U.S. R&D expenditures grew at an average annual rate of 1.42 percent from 1987 to 2006.     

Bottleneck co-ownership as a regulatory alternative

This paper proposes a regulatory mechanism for vertically related industries in which the upstream “bottleneck” segment faces significant returns to scale while other (downstream) segments may be more competitive. In the proposed mechanism, the ownership of the upstream firm is allocated to downstream firms in proportion to their shares of input purchases. This mechanism, while preserving downstream competition, partially internalizes the benefits of exploiting economies of scale resulting from an increase in downstream output. We show that this mechanism is more efficient than a disintegrated market structure in which the upstream natural monopoly bottleneck sets a price equal to average cost.     

Technology Diffusion with Market Power in the Upstream Industry

This paper compares taxes and tradable permits when used to regulate a competitive and polluting downstream industry that can purchase an abatement technology from a monopolistic upstream industry. Second-best policies are derived for the full range of the abatement technology’s emission intensities and marginal abatement costs. The second-best permit quantity can be both above or below the socially optimal emission level. Explicit consideration of the output market provides further insights on how market power distorts the allocation in the downstream industry. The ranking between permits and taxes is ambiguous in general, but taxes weakly dominate permits if full diffusion is socially optimal. In addition, it is analysed how a cap on the permit price affects the diffusion of an abatement technology.     

Downstream price-cap regulation and upstream market power

Under “partial separation,” it is increasingly common for a utility’s upstream affiliate (e.g., an electric generation supplier) to be unregulated while its downstream affiliate (e.g., the distribution company offering retail service) is subject to regulation. When choosing the optimal form of downstream regulation, regulators may be confronted with the potential exercise of market power by the upstream affiliate. This paper finds that the imposition of a downstream price cap with an appropriate profit-sharing rate can eliminate the upstream affiliate’s exercise of market power. However, it is less desirable to fully mitigate affiliate market power when upstream rivals also behave strategically.      

Complementarity of willingness to pay and cost heterogeneity under vertical product differentiation: A welfare analysis

Due to the fact that a consumer’s willingness to pay differs between segments, many unregulated industries are price constrained, although the specific costs of market segments also differ. If the product quality is endogenously chosen, we find that third-degree price discrimination increases welfare if a sufficiently pronounced complementarity between the willingness to pay and variable cost heterogeneity is given. This is due to the fact that the monopolist’s incentive for employing a pronounced price dispersion strategy is directly influenced by the consumers’ willingness to pay for the quality of a product. With endogenous product quality, the paper shows that the standard welfare result of third-degree price discrimination compared to uniform monopoly pricing (e.g. that total welfare and consumer surplus both fall if total output does not rise) can be only reversed given the complementarity is sufficiently pronounced.     

基于ADL与ECM模型的出口供给弹性分析

以中国2005年7月到2010年6月间的数据为依托,基于动态模型实证对中国出口供给是否具有无限价格弹性进行研究后发现:中国出口供给的长期价格弹性为1.85;出口价格、产出能力、国内价格水平以及生产成本对出口供给的影响均存在滞后效应,其中产出能力对出口供给的影响最大。