Pricing, learning, and strategic behavior in a single-sale model

Summary. We analyze an infinite horizon model where a seller who owns an indivisible unit of a good for sale has incomplete information about the state of the world that determines not only the demand she faces but also her own valuation for the good. Over time, she randomly meets potential buyers who may have incentives to manipulate her learning process strategically. We show that i) the seller's incentives to post a high price and to experiment are not necessarily monotonic in the information conveyed by a buyer's rejection; and ii) as the discount factors tend to one, there are equilibria where the seller always ends up selling the good at an ex-post individually rational price. Received: January 6, 1999; revised version: July 15, 2000     

Passive learning: a critique by example

In models of learning by experimentation that exhibit signal dependence, a benchmark using a passive learner has been proposed. The use of this benchmark is flawed – first, passive learning does not disentangle the effects of knowing that beliefs, as well as other state variables, might change, and we address this issue directly by introducing a naïve learner. Secondly, and more tellingly, passive learning does not do what it is supposed to do, namely help measure the gains from active experimentation; the naïve learner enables us to illustrate this point in the context of a particular example.     

Endogenous Timing in a Mixed Duopoly: Price Competition

The endogenous order of moves is analyzed in a mixed duopoly for differentiated goods, where firms choose whether to set prices sequentially or simultaneously. It is shown that, in contrast to the private duopoly where firms set prices sequentially, in the mixed duopoly firms choose prices simultaneously. Moreover, the result obtained in the mixed duopoly under price competition differs from the one under quantity competition, since in the latter case decisions are taken sequentially.      

Optimal pollution taxation in a Cournot duopoly

It is well known that the optimal pollution tax in a competitive industry is equal to the marginal damage inflicted by the pollution. It has also been shown that the optimal pollution tax on a monopoly is less than the marginal damage. In this paper, I derive the optimal pollution tax for a Cournot duopoly. If firms have different production costs, the optimal tax rate may exceed the marginal damage. This is so because the tax may be an effective instrument for allocating production from the less to the more efficient firm. It is also shown that, if one firm has a positive most preferred pollution tax, the sum of consumer and producer surpluses will be declining in the tax at this level.     

Mixed Duopoly,Merger and Multiproduct Firms

The literature on mergers has extensively analyzed the decision to merge by private firms, but it has not considered the decision to merge by private and public firms. We assume that when a private firm and a public firm merge (or when one of them acquires the other), they set up a multiproduct firm in which the government owns an exogenous percentage stake. In this framework, we show that the decision to merge by firms depends on the degree to which goods are substitutes and on the percentage of the shares owned by the government in the multiproduct firm.     

To adjust or not to adjust after a cost-push shock? A simple duopoly model with (and without) resilience

We characterize the equilibrium in a homogeneous good Cournot duopoly in which firms have the choice to react to a cost-push shock by paying a lump-sum adjustment cost in order to offset the initial rise in marginal cost. Our results show that the size of the shock and the size of the adjustment cost jointly determine the nature and the number of the equilibria generated in the game. In particular, if the adjustment cost is high enough, at least one firm decides not to adjust at the pure-strategy equilibrium, and such a partial adjustment by the industry can be socially efficient as well. The main conclusions are robust to the endogenization of the adjustment cost as an increasing function of the shock size. Some implications of this partial equilibrium analysis about industry's resilience are outlined.     

Mixed ownership in a mixed duopoly with differentiated products

We determine optimal privatization in a symmetric differentiated duopoly when the public firms do not bear the full cost of production and hence their objective functions differ from the government’s objective function. In the social optimum firms will generally have mixed ownership, and it will depend on the type of uncovered cost, the degree of substitutability of the two products and the output decision rule of the partially public firms. Different types of mixed duopoly emerge, ranging from both firms being partially privatized, to one being fully privatized. We also derive an optimal tax-subsidy scheme as a substitute for privatization.      

上游垄断背景下厂商提成特许策略研究

在原料供应厂商占据垄断地位的假设下,通过对比下游创新厂商提成特许前后的收益,对下游创新厂商的特许策略选择和创新激励进行了研究。研究结果表明:当技术创新规模较小时,下游创新厂商进行技术创新的激励增大,会对下游其他无创新的厂商进行技术特许;当技术创新规模较大时,下游创新厂商则不会进行技术特许。     

Price discrimination and price dispersion in a duopoly

This paper analyses the problem of price discrimination in a market where consumers have heterogeneous preferences both over a horizontal parameter (brand) and a vertical one (quality). Discriminatory contracts are characterized for different market structures. It is shown that price dispersion, i.e. the observed range of prices for each class of customers, increases almost everywhere as competition is introduced in the market.     

North-South knowledge spillovers and competition: convergence versus divergence

Technology spillovers from high-productivity countries in the North allow low-productivity countries in the South to improve productivity in high-tech sectors relatively easy. However, the South's share in world goods markets for high-tech products is relatively low, which reduces opportunities for learning by doing. Our simple Ricardian endogenous growth model shows how the balance between toughness of competition in trade and the strength of North-South spillovers determines whether productivity levels diverge, partially converge or fully converge in the long run. If convergence prevails, the North is confronted with declining employment in high-tech sectors. Temporary (trade) policy measures can turn a diverging economy into a converging one.