PLATFORM COMPETITION WITH ENDOGENOUS HOMING

We consider two-sided markets in which consumers and firms endogenously determine whether they single-home, multi-home, or exit the market. We find that the competitive bottleneck allocation in which consumers single-home and firms multi-home is always an equilibrium. In addition, we find equilibria with multi-homing and single-homing on each side of the market. However, unlike the standard pricing result where the side that multi-homes faces higher prices, we find that lower prices coincide with multi-homing: agents find multi-homing more attractive when faced with lower prices. We also show that endogenous homing can induce straddle pricing which deters price undercutting between platforms.     

R&D COMPETITION WITH ASYMMETRIC FIRMS

This paper considers a non-tournament duopoly model of process innovation. Costs of production can be reduced by firms spending on R&D. Firms are asymmetric in the sense that they may differ in their initial costs of production. It is shown that the high-cost firm may spend more (or less) in R&D than its low-cost rival. This main result is dependent on the relative magnitude of two important forces: the incentive effect, whereby the low-cost firm always has a stronger incentive to spend on cost-reducing R&D, and the effectiveness factor, which favours the high-cost firm.     

新世纪中国入境旅游市场竞争态分析

市场经济体制下区域旅游业发展战略的制定,必须以准确的市场分析与把握为前提。依据市场占有率和增长率的双指标组合,构建一个综合反应旅游市场竞争态的模型,据此将旅游市场划分为明星市场、金牛市场、幼童市场和瘦狗市场四种类型,为旅游业发展战略制定提供了新的分析方法。依据该模型对新世纪中国入境旅游30个客源地市场和31个目的地市场进行了定量划分,分析了各市场在参与中国入境旅游业中所处的地位与态势,为我国入境旅游业的市场开拓提供了新的依据。     

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.     

我国省级市场竞争态及其转移模型应用研究

市场经济体制下区域经济发展战略的制定,必须以准确的市场分析与把握为前提。依据市场占有率和增长率的双指标组合,构建出一个能综合定量描述区域经济市场竞争格局的动态模型,据此将区域经济市场划分为明星市场、金牛市场、幼童市场和瘦狗市场4种类型,并指出市场竞争态的转移规律包括增长型、稳定型、波动型、衰退型4种模式,以发展的观点对区域经济市场的演变进行研究,为区域经济规划提供依据。应用这一模型,对我国31个省级区域的经济发展竞争态进行定量计算和分析,并以山东、湖北和陕西为例,对东、中、西部地区的区域经济发展进行趋势模拟和预测。     

DYNAMIC PRICE COMPETITION WITH CAPACITY CONSTRAINTS AND A STRATEGIC BUYER

We analyze a simple dynamic durable good model. Two incumbent sellers and potential entrants choose their capacities at the start of the game. We solve for equilibrium capacity choices and the (necessarily mixed) pricing strategies. In equilibrium, the buyer splits the order with positive probability to preserve competition, making it possible that a high and low price seller both have sales. Sellers command a rent above the value of unmet demand by the other seller. A buyer benefits from either a commitment not to make future purchases or by hiring an agent to always buy from the lowest priced seller.     

THE CORRELATION OF YOUTH PHYSICAL ACTIVITY WITH STATE POLICIES

Childhood overweight has risen dramatically in the United States during the past three decades. The search for policy solutions is limited by a lack of evidence regarding the effectiveness of state policies for increasing physical activity among youths. This paper estimates the correlation of student physical activity with a variety of state policies. We study nationwide data on high school students from the Youth Risk Behavior Surveillance System for 1999, 2001, and 2003 merged with data on state policies from several sources. We control for a variety of characteristics of states and students to mitigate bias due to the endogenous selection of policies, but we conservatively interpret our results as correlations, not causal impacts. Two policies are positively correlated with participation in physical education (PE) class for both boys and girls: a binding PE unit requirement and a state PE curriculum. We also find that state spending on parks and recreation is positively correlated with two measures of girls' overall physical activity. ( JEL I18, I28)     

以外贸为主的外部冲击,竞争与区域经济增长

全球化对于相对封闭的国家和区域而言可视为一种外部冲击，这种冲击会对消费结构、市场、政府及宏观经济产生影响。这种冲击的必要性和可能的效应源于个体效用函数。基于微观假设的多重效应可以在宏观上得以映证。选取外贸及人口密度等指标对中国各省市的实证分析表明，外部冲击的强弱会对经济增长产生不同的影响，而这种冲击的内在机制在于竞争机制。     

MONOPOLISTIC COMPETITION WITH EFFICIENCY GAPS AND A HECKSCHER‐OHLIN TRADE PATTERN*

We develop a two‐factor, three‐sector model of international trade in which the monopolistically competitive firms are characterized by different fixed production costs. We show that, depending on the pattern of the international distribution of factor endowments, the trade pattern is determined not only by relative factor endowments as suggested by Heckscher and Ohlin, but also by absolute factor endowments via a mechanism of competitive selection in the monopolistically competitive sector.     

WELFARE‐MAXIMISING PRICING IN A MACROECONOMIC MODEL WITH IMPERFECT COMPETITION AND CONSUMPTION EXTERNALITIES

This paper develops a simple macroeconomic model with imperfect competition and consumption externalities, and uses it to examine whether the marginal cost pricing rule in the partial equilibrium framework can apply to the general equilibrium framework. It is shown that, for welfare to be maximised, average revenue should be set equal to marginal cost if consumption externalities are either absent or positive. However, for welfare to be maximised, average revenue should be set higher than marginal cost in the presence of negative consumption externalities.     

QUANTITY PRECOMMITMENT AND BERTRAND COMPETITION YIELD COURNOT OUTCOMES: A CASE WITH PRODUCT DIFFERENTIATION*

Using a simple model of two-stage duopoly game, this paper shows that Bertrand-like price competition on a differentiated goods market, following a simultaneous endogenous choice of production capacity, yields the Cournot-like outcomes.     

STRATEGIC TRADE AND DELEGATED COMPETITION WITH ENDOGENOUS QUALITY CHOICE: IS EXPORT POLICY NEEDED?

This paper introduces the relative‐performance contract into a vertically differentiated product market and examines how the optimal trade policy and quality choice respond to the incentive mechanism. We find that the high quality firm makes better use of the delegation than the low quality firm in a cross‐border decentralized model. The main difference between the present paper and the strategic trade theory literature is that in this paper the optimal policy is free trade, which does not depend on whether firms compete by prices or quantities, and on whether the goods are substitutes or full complements.     

PRICE AND QUANTITY COMPETITION WITH ASYMMETRIC COSTS IN A MIXED DUOPOLY: A TECHNICAL NOTE

We consider a mixed duopoly in which private and public firms can choose to strategically set prices or quantities when the public firm is less efficient than the private firm. Thus, even with cost asymmetry, we obtain exactly the same result (i.e., Bertrand competition) of Matsumura and Ogawa (2012) if Singh and Vives’ (1984) assumption of positive primary outputs holds. However, compared to endogenous determination of the type of contract without cost asymmetry, our main finding is that in the wider range of cost asymmetry, different type(s) of equilibrium related to or not related to the limit‐pricing strategy of the private firm can be sustained. Thus, when considering an implication on privatization, we may overestimate the welfare gain of privatization because Cournot competition takes place after privatization even though cost asymmetry exists between firms. While the result of Matsumura and Ogawa (2012) holds true if the goods are complements, we find the novel results in the case of substitutes.     

COMPETITION FOR MARKET SHARE OR FOR MARKET SIZE: OLIGOPOLISTIC EQUILIBRIA WITH VARYING COMPETITIVE TOUGHNESS*

For an industry producing a composite commodity, we propose a comprehensive concept of oligopolistic equilibrium, allowing for a parameterized continuum of regimes varying in competitive toughness. Each firm sets simultaneously its price and its quantity under two constraints, relative to its market share and to market size. The price and the quantity equilibrium outcomes always belong to the set of oligopolistic equilibria. When firms are identical and we let their number increase, any sequence of symmetric oligopolistic equilibria converges to the monopolistic competition outcome. Further results are derived in the symmetric CES case, concerning in particular the collusive solution enforceability.     

TAX COMPETITION IN A SIMPLE MODEL WITH HETEROGENEOUS FIRMS: HOW LARGER MARKETS REDUCE PROFIT TAXES*

We set up a simple two‐country model of tax competition where firms with different productivity decide in which location to produce and sell output. In this model, a unique, asymmetric Nash equilibrium is shown to exist, provided that countries are sufficiently different with respect to their exogenous market size. Sorting of firms occurs in equilibrium, as the smaller country levies the lower tax rate and attracts the low‐cost firms. A simultaneous expansion of both markets that raises the profitability of firms intensifies tax competition and causes both countries to reduce their tax rates, despite higher corporate tax bases.     

QUALITY COMPETITION WITH STOCHASTIC DEMAND AND COSTLY SEARCH: THEORY AND EVIDENCE FROM THE VIDEO RENTAL MARKET

A theoretical model is developed to predict optimal service rates in markets where firms compete in availability. We show that firms are more likely to stock-out of popular products as the cost of consumer search increases. Carlton (1978) showed that, in a zero-profit competitive environment, firms balance the risk of not being able to serve a particular customer against the cost of holding excess capacity and that this balancing act will result in an equilibrium in which not all customers are served. The model was later adapted to oligopolistic competition by Peters (1984) and Deneckere and Peck (1995) . This paper extends this literature on competition under stochastic demand by developing a model that incorporates 1) the possibility that customers may be able to purchase from another firm in the case of a stock-out and 2) the option for firms to offer an imperfect substitute in order to persuade some customers to make a purchase when the first choice product is out of stock. Empirical evidence is presented in support of the theoretical model using data collected from video rental outlets in a midsize southeastern US city.     

CAPITAL–LABOUR SUBSTITUTION AND ENDOGENOUS FLUCTUATIONS: A MONOPOLISTIC COMPETITION APPROACH WITH VARIABLE MARKUP*

This paper analyses an overlapping generations model with endogenous product diversity where strategic interactions between producers are introduced; it examines how they affect the stability properties of the steady state. Because of free entry, strategic interactions between producers imply a new dynamic feature, markup variability, promoting indeterminacy and endogenous cycles. Indeed, in contrast to the model without strategic interaction, endogenous fluctuations can occur when the substitution between the production factors, capital and labour, is not too weak, but in accordance with empirical estimates.     

WAGE‐RISE CONTRACT AND QUANTITY COMPETITION WITH PROFIT‐MAXIMIZING AND LABOUR‐MANAGED FIRMS

This paper examines the behaviours of a profit‐maximizing firm and a labour‐managed profit‐per‐worker‐maximizing firm in a two‐stage quantity‐setting model with a wage‐rise contract as a strategic commitment. The paper then shows that there exists a unique equilibrium that coincides with the Stackelberg solution where the profit‐maximizing firm is the leader and the labour‐managed firm is the follower.     

A COMPUTATIONALLY PRACTICAL SIMULATION ESTIMATION ALGORITHM FOR DYNAMIC PANEL DATA MODELS WITH UNOBSERVED ENDOGENOUS STATE VARIABLES*

This article develops a simulation estimation algorithm that is particularly useful for estimating dynamic panel data models with unobserved endogenous state variables. Repeated sampling experiments on dynamic probit models with serially correlated errors indicate the estimator has good small sample properties. We apply the estimator to a model of female labor supply and show that the rarely used Polya model fits the data substantially better than the popular Markov model. The Polya model also produces far less state dependence and many fewer race effects and much stronger effects of education, young children, and husband's income on female labor supply decisions.