Spatial competition,concentration and welfare

This paper gives the general conditions under which the firm's f.o.b. mill price may rise or fall due to spatial separation of buyers and/or spatial entry of rival firms. Several theorems are proposed concerning the fundamental mechanism underlying certain paradoxical implications of two orthodox spatial competition models. A third alternative model of competition set forth elsewhere is reexamined, and is shown to generate the largest market areas for individual firms, the lowest product prices, and the greatest industry supply — the greatest consumer welfare.     

会计师事务所的进入、退出与审计市场的竞争

本文主要从进入、退出的角度研究审计市场的竞争。本文的分析表明,审计市场的市场占有率变动率更为合理地衡量市场的动态变化,审计市场的进入壁垒主要是准入壁垒(管制壁垒),而结构性壁垒和流动性壁垒主要存在于大客户市场,对于小客户市场的影响作用很小。为了防止进入者的进入,在位者通过各种流动性壁垒的设置以提高进入者的成本。但从总体看,审计市场仍然是高度竞争的。     

Sewer plant operating efficiency,patronage, and competition

Sewer treatment plants in New York State, US, are studied for efficiency and economies of scale. Substantial economies of scale are found. The degree of inefficiency for each plant is then computed and this inefficiency is related to the degree of market concentration in that county. The result found is that greater concentration induces a reduction in efficiency. This is argued to be consistent with the Tiebout Hypothesis. Copyright © 2004 John Wiley & Sons, Ltd.     

Asymmetric information,foreign entry and multi-period credit competition in banking industry

In a credit market, a low-cost foreign entrant is likely less informed than a domestic bank with information endowments. We present a steady-state model in an infinite-period framework, and analyze how the informational asymmetry affects the lending equilibrium and the foreign banks’ entry modes. Firstly, we show that the domestic bank's initial informational advantage from its relatively large market share at the beginning of competition is not enough to hinder the entry of a low-cost foreign bank. In addition, the foreign bank is more likely to be the winner in the steady state of an infinite-period game than that in a static game. Secondly, the comparative static analysis show that the likelihood of foreign bank becoming the winning party increases with borrower quality, project payoff and the growth rate of potential new borrowers. Thirdly, when the foreign bank wins game in the steady state, its market share is decreasing in project payoff and the growth rate of new borrowers, while changes non-monotonically with borrower quality. Finally, we extend our model to characterize the domestic bank's sustainable advantage in being relatively familiar with new market, and provide valuable explanations for the observed entry modes of foreign banks in China.     

Spatial competition with demand uncertainty: A laboratory experiment

Motivated by recent research on product differentiation, we conduct laboratory experiments to study how demand uncertainty influences firms' incentives to differentiate. We ground our experiment on a discrete version of the standard location-then-price game introduced by Hotelling (1929), and we consider different levels of demand uncertainty. We first derive the game equilibrium assuming risk-neutral firms, and obtain the standard prediction that a high level of demand uncertainty generates more differentiation. Second, we extend the analysis to consider non-risk neutral firms and markets with asymmetric risk profiles. We show that the game equilibrium can differ substantially according to the attitude to risk. Third, we compare our predictions with the experimental data and find that demand uncertainty acts as a differentiation force in the context of both symmetric markets composed of risk-neutral or risk-lover subjects and asymmetric markets. We find support also for the agglomeration effect arising from demand uncertainty for sufficiently risk-averse subjects. Overall, these results might explain the opposite product differentiation strategies frequently observed in markets with fast-evolving tastes (i.e., minimum or maximum differentiation). Finally, the data confirm that subjects differentiate to relax price competition and provide evidence of a strong positive relationship between differentiation and prices.     

企业社会责任与企业竞争优势

20世纪以来,企业日益意识到,只有得到社会广泛认同和支持,才能求得生存和发展,于是企业的社会责任成为企业获得竞争优势的自觉行为。     

Industry dynamics with knowledge-based competition: a computational study of entry and exit patterns

I propose a computational model of industry evolution capable of matching many stylized facts. It views the firm as a myopic but adaptive entity whose survival depends on its ability to perform various activities with greater efficiency than its rivals. In this model, the shakeout pattern arises naturally in the early stage of industrial development. I provide a full comparative dynamics analysis of how various industry-specific factors determine the numbers and the rates of entries and exits over time as well as the ages of the exiting firms. An earlier version of this paper was circulated and presented under the title, “Non-Equilibrium Industry Dynamics with Knowledge-Based Competition: An Agent-Based Computational Model.” I would like to thank the two anonymous referees, Jason Barr, Ed Bell, Jon Harford, Joe Harrington, Bill Kosteas, Edward Nell, and the conference participants at the EEA-2007 Meetings (New York, NY) as well as the 2007 International System Dynamics Conference (Boston, MA) for their helpful comments and suggestions. I gratefully acknowledge the support of the College of Graduate Studies at Cleveland State University.     

Production-location decision and free entry oligopoly: A correction

This paper shows that there is no interior solution in Mai–Hwang's 1992 oligopolistic location model with free entry when the production function exhibits constant or decreasing returns to scale. The comparative static results of the impact of a demand change on the location decision only apply to the case where the production function exhibits increasing returns to scale. It re-examines the impact of a demand change on the location decision of an oligopolistic firm and corrects the propositions derived by [C.C. Mai, H. Hwang, Production-location decision and free entry oligopoly, Journal of Urban Economics 33 (1992) 252–271. Reprinted in: M.L. Greenhut, G. Norman (Eds.), The Economics of Location, vol. I: Location Theory, Edward Elgar, Aldershot, 1995].     

Endogenous network efficiency,macroeconomy, and competition: Evidence from the Portuguese banking industry

Although performance analysis has become a vital part of the banking industry, research on the efficiency of Portuguese banking remains scarce and focused on discussing rankings to the detriment of unveiling its productive structure relative to its competition. This issue is of utmost importance considering the relevant transformations in the Portuguese economy over the last ten years. In this study, we developed a network productive structure comprising two paradigms (the production and intermediation approaches, respectively) to assess how market competition and other macro-economic variables impact bank efficiency and their feedback effects in Portugal. Unlike previous research, an integrated multi-layer perceptron (MLP)/hidden Markov model (HMM) was used for the first time to unveil endogeneity among banking competition, macro-economic variables, and the efficiency levels of the production and intermediation approaches in banking. The findings illustrate the pattern of interaction among these variables and verify that the production efficiency is the cornerstone of endogeneity in Portuguese banks. Policy makers will find the results helpful.     

Quality competition and entry deterrence: When to launch a second brand

We study the rationale for an incumbent to launch a second brand when facing potential entry into a market with quality‐differentiated products and a fringe producer. Depending on market size, the cost of a second brand and a potential entrant's setup cost the incumbent might use a second brand both when deterring and when accommodating entry. For low costs of brand proliferation, the high‐quality firm will prevent entry with limit qualities or multiple brands. The high‐quality incumbent will accommodate entry only if it cannot be prevented. Accommodation is always accompanied by an additional brand safeguarding the premium brand.     

Spatial Cournot competition and economic welfare: a note

We investigated welfare implications in location-quantity models in a symmetric linear city. We found that when firms are not agglomerated in equilibrium, increasing the distance between firms raises (reduces) producer surplus and social welfare (consumer surplus). Moreover, central agglomeration is always optimal for consumers among symmetric locations, but not necessarily for producers. Central agglomeration can be inefficient even if it is the unique equilibrium outcome. In short, the firms are more likely to agglomerate or locate closer than what welfare maximizers would dictate, whereas they locate farther apart than what consumer surplus maximizers would recommend.     

National attachments,economic competition,and social exclusion of non-ethnic migrants in Israel: a mixed-methods approach

This paper provides a specific example of how mixed-methods can be used as a useful research design in the study of ethnic exclusionism. Specifically, we investigate the ways in which conceptions of national identity and nationalism and perceptions of socio-economic threat explain exclusionary attitudes of the majority group (Jews) towards labor migrants in Israel. We show how the implementation of the mixed-method approach to the study of discriminatory attitudes towards migrants not only provided evidence for convergence, but also improved our understanding of the complex nature of ethnic relations in modern societies.     

城市整体交易效率与中国城市间竞争分析

定义了城市整体交易效率,并在城市内部多主体相互作用的基础上分析其形成机制,在分析中国城市间要素市场、产品市场、产品生产过程和消费过程中竞争特点的基础上,研究城市整体交易效率对城市间各方面竞争的影响方式,并构建了基于城市整体交易效率的中国城市间竞争模型.     

Spatial price competition in the Manhattan hotel market: The role of location,quality, and online reputation

We investigate whether and to what extent price competition among hotels in Manhattan is driven by geographic location, quality, and online reputation. We investigate (a) which of the three product differentiation dimensions matters most for hotels' pricing decisions and (b) whether and to what extent competition is localized. Results show that hotel quality and geographic location matter the most for price competition. Whereas hotels of similar reputation also react to each other's prices, the effect is less important. Also, results indicate that hotels' prices react most aggressively to prices set by the four nearest hotels in the area.     

Spatial mobility and competition for jobs: Some theory and evidence for Western Germany

This paper sheds new light on the role of regional labor market conditions for regional mobility. We study competition for vacant jobs along two dimensions – between employed and unemployed job searchers, and between resident and non-resident job searchers – within a simple matching framework. Evidence from estimating regional matching functions with data on job searchers disaggregated by previous employment status and regional provenance indicates that competition for jobs along both dimensions affects hiring. Tests of the theoretical predictions suggest that labor market conditions do determine regional mobility, but the countervailing effects of competition between employed and unemployed dilute mobility effects.     

Corruption, decentralization and yardstick competition

Several empirical studies have found a negative relationship between corruption and the decentralization of the powers to tax and spend. In this paper we explain this phenomenon using a model of Yardstick Competition. Using data on federal corruption-related convictions in U.S. states, we also provide new evidence that points to the existence of a spatial autoregressive component to explaining corruption. We interpret this as consistent with the theoretical findings.     

Spatial accounting methods and the construction of spatial social accounting matrices

The paper examines modifications to Regional Accounts used to construct regional and interregional Social Accounting Matrices (SAMs). It is argued that as the size of the basic areal unit used in studies declines, more traditional accounting approaches are no longer satisfactory. A three-dimensional spatial approach (termed two-by-two-by-two) to the identification of fundamental dimensions (commodity and factor market; geographical; and social accounts) has been developed in contrast to the more traditional non-spatial approach (termed two-by-two). This involves a novel approach using the geographical concepts of place of production for production activities, place of residence for institutions, marketplace for commodities and marketplace for factors. The use of these concepts permits accounting balances to be calculated at the spatial level. The theoretical basis of the spatial regional accounting model is presented and an example of the construction of a Danish Interregional SAM (SAM-K) is examined. Particular attention is given to data requirements, showing that these are much more modest than generally assumed.     

Firm entry,product repositioning and welfare

We show that the entry of a second firm in a horizontally differentiated market (ala Hotelling) may harm consumers as prices increase and consumer’s surplus possibly decrease. We first derive the price and the consumer’s surplus of a monopoly which is located at the center of the market. When a second firm enters the market the first firm repositions and the two firms locate at their equilibrium points. Although competition adds to variety and increases consumer’s surplus, the post entry increase in price may outweight the gains from extra variety and make consumers worse off.     

Targeted advertising,platform competition,and privacy

Targeted advertising can benefit consumers through lower prices for access to web sites. Yet, if consumers dislike that web sites collect their personal information, their welfare may go down. We study competition for consumers between web sites that can show targeted advertisements. We find that more targeting increases competition and reduces the web sites' profits, but yet in equilibrium web sites choose maximum targeting as they cannot credibly commit to low targeting. A privacy protection policy can be beneficial for both consumers and web sites. If consumers are heterogeneous in their concerns for privacy, a policy that allows choice between two levels of privacy will be better. Optimal privacy protection takes into account that the more intense competition on the high‐targeting market segment also benefits consumers on the less competitive segment. Consumer surplus is maximized by allowing them a choice between a high‐targeting regime and a low‐targeting regime which affords more privacy.