Conjectural variations,risk aversion and price-cost margins

Summary We have shown that introduction of random conjectural variations and risk aversion into an oligopoly model leads to results in line with those derived earlier for competitive and monopolistic firms. In particular, a risk-averse firm has smaller output and higher expected price-cost margin than a risk-neutral firm. For a specific form of conjectural variations we have shown that under risk aversion the firm-level expected price-cost margins depend on the market structure, measured in terms of the Herfindahl index of the rest of the firms in the industry, as well as on the expected degree of correlation between the competitors' reactions.     

The empirical content of Cournot competition

We consider the testable implications of the Cournot model of market competition. Our approach is nonparametric in the sense that we abstain from imposing any functional specification on market demand and firm cost functions. We derive necessary and sufficient conditions for (reduced form) equilibrium market price and quantity functions to be consistent with the Cournot model. In addition, we present identification results for the corresponding inverse market demand function and the firm cost functions. Finally, we use our approach to derive testable restrictions for the models of perfect competition, collusion and conjectural variations. This identifies the conditions under which these different models are empirically distinguishable from the Cournot model. We also investigate empirical issues (measurement error and omitted variables) related to bringing our testable restrictions to data.     

Conjectural Variations, Market Power, and Optimal Trade Policy in a Vertically Related Industry

The paper introduces the conjectural variations and bargaining approaches into a vertical model wherein a foreign upstream firm supplies one input to two downstream firms that produce differentiated products for the export market. Various downstream firms’ competition modes and upstream's pricing schemes emerge as special cases of this formulation. The authors show that the optimal export policy of a downstream country depends crucially on the downstream firms’ conjectures of rivals’ responses, the upstream firm's pricing schemes, their relative bargaining powers, and the degree of product differentiation. If the upstream's pricing or bargaining power is strong (weak) and if the downstream's degree of competition is high (low), a tax (subsidy) is optimal owing to a strong (weak) vertical profit‐shifting effect and a weak (strong) horizontal effect.     

Voluntary Export Restraints and Economic Welfare

In this paper, we explore welfare implications of a voluntary export restraint (VER) agreement within a simple model of duopoly with product differentiation and conjectural variations. We assume that the foreign exporter does not sell its product in its own market and that the imposition of a VER makes the domestic firm into a Stackelberg leader. Under these assumptions, it is shown that a VER introduced at the free-trade equilibrium level of export is welfare-improving for the importing country if and only if the foreign exporter is forced to comply with the restraint involuntarily . In other words, it is impossible to benefit home country and foreign country simultaneously by a VER agreement within the class of models we are envisaging. This result holds irrespective of whether firms compete in terms of quantities or prices.     

Conjectural variations, symmetric equilibria and economic policy

In this paper, we consider conjectural variations in a simple static general equilibrium model under oligopolistic competition. The modeling of conjectures captures the role played by beliefs in a micro-founded model. So, the economy may have three kinds of symmetric general equilibria. Furthermore, these equilibria can be Pareto-ranked by the conjectural variation parameter. Finally, we consider the implementation of a tax on the strategic behaviors in case of balanced-budget rule. The comparative statics illustrates the idea according to which the effectiveness of the multiplier mechanism to mitigate the market distortions depends on the symmetric equilibrium considered. Therefore, the effect of the tax on the prices and economic activity depends on the degree of market power which is conjectured by the agents.     

谈判能力与标价策略

厂商能够通过策略性地选择不标价销售,利用其较强的谈判能力获取更多的利益。当厂商谈判能力较弱时,厂商将选择标价以最大化其利润。考虑消费者的谈判成本,厂商选择不标价时,其利润和谈判能力呈倒U型关系。当厂商谈判能力过高时,由于消费者将无利可图而放弃购买,因而厂商将选择标价的策略。在一定条件下,厂商实施策略性不标价不是市场有效的,可以通过强制标价实现市场的有效性。     

Modelling economic hysteresis losses caused by sunk adjustment costs

Transition from one economic equilibrium to another as a consequence of shocks is often associated with sunk adjustment costs. Firm-specific sunk market entry investments (or sunk market exit costs) in case of a reaction to price shocks are an example. These adjustment costs lead to a dynamic supply pattern similar to hysteresis. In analogy to “hysteresis losses” in ferromagnetism, the authors explicitly model dynamic adjustment losses in the course of market entry and exit cycles. They start from the micro level of a single firm and use explicit aggregation tools from hysteresis theory in mathematics and physics to calculate dynamic losses. The authors show that strong market fluctuations generate disproportionately large hysteresis losses for producers. This could give a reason for the implementation of stabilizing measures and policies to prevent strong (price) variations or, alternatively, to reduce the sunk entry and exit costs.     

Technology choice under duopoly

This paper presents a conjectural variation approach to demonstrate that competing firms will often distort their cost structures away from strict cost minimization for strategic reasons. In particular, it is shown that the nature of the desired distortions of production technology depends critically on the magnitudes of the firms' conjectural variations with respect to outputs as well as the firms' conjectural variations with respect to technology. These results are in sharp contrast to the conventional wisdom based on monopolized or perfectly competitive markets.     

Tariffs Versus Quotas in a Differentiated Products Market: A Conjectural Variations in Prices Approach

This paper examines the (non)equivalence of a tariff and a quota set at the level of imports generated by the tariff using a conjectural variations in prices model. It extends previous studies by considering a variety of firm behavior patterns in the tariff equilibrium and when the imports and the domestic products are complements. The results obtained encompass most of the previous results. In addition, for complements, replacing a tariff with a quota has opposite effects on the prices of two products. Also, the prices under tariffs and quotas are not necessarily equivalent for complements. [F13]     

Conjectural Variations and Voluntary Public Good Provision in a Repeated Game Setting

The purpose of this paper is to show how conjectural variations can be derived as a reduced form in an infinitely repeated game of private provision of public goods. We obtain explicit closed forms of conjectural variations associated with maximal sustainable equilibria in which the sum of the utilities of all of a community's members is maximized for both quadratic and Cobb–Douglas preferences, provided that the resulting sequence of contributions can be sustained as a Nash (or subgame perfect) equilibrium in the underlying repeated game. We also show that positive conjectural variations will emerge as long as people place positive weight on the future, and that those conjectures are positively related to the discount factor.     

基于资源观的中国新创企业早期成长影响因子与战略绩效分析——基于深圳中小企业板的研究证据

本研究在资源基础观理论基础上建立了一个新创企业资源一成长战略～绩效的研究模型,并以深圳中小企业板2007年之前上市的102家上市新创企业为研究对象进行了相关实证研究。其主要研究结论为：（1）中国新创企业的资源差异对企业绩效有直接影响。其中,实物资源与企业盈利性、成长性呈正相关;财务资源与企业成长性呈正相关;声誉资源与企业盈利性呈正相关：人力资源与企业盈利性、成长性呈正相关。（2）新创企业的资源差异对其选择的成长战略有显著影响。有形资源和人力资源丰富的新创企业倾向于采用市场拉动战略．而无形资源丰富的新创企业则倾向于采用创新推动战略。（3）处于不同行业的新创企业,在成长战略方面存在显著差异,高科技行业的企业更多采用创新推动战略,而非高科技行业的企业则更多采用市场拉动战略。但不同行业的企业在企业绩效的盈利性和成长性方面并不存在显著差异。     

TRADE POLICY AND MARKET POWER: FIRM‐LEVEL EVIDENCE

This article identifies the effect of trade policy on market power through new data and a new identification strategy. We identify market power by observing how exporting firms price discriminate across markets following variations in bilateral exchange rates. Pricing‐to‐market is prevalent in all countries in our sample, even among small firms, although it is increasing in firm size. More importantly, we find that the effect of nontariff measures (NTMs) is not isomorphic to that of tariffs. Whereas tariffs reduce the market power of foreign firms through rent‐shifting effects, NTMs reinforce the market power of nonexiting firms, domestic and foreign alike.     

Corporate Restructuring in Japan Part I: Can M‐Form Organization Manage Diverse Businesses?

The purpose of this paper is to examine the recent organizational restructuring in Japan in the framework of organizational economics, assuming that the product/market portfolio of the firm is fixed. How does a firm set about organizing its internal divisions? I first summarize some stylized facts on corporate diversification strategy and multi‐divisional (M‐form) organization in large Japanese firms from different perspectives. I then analyse the problem of choosing an organizational form. In particular, I argue that, precisely because of its related diversification, the multi‐business Japanese firm adopting the M‐form finds it difficult to differentiate its diverse businesses internally.     

The theory of public goods: non-nash behaviour

Most treatments of equilibrium public goods provision assume zero conjectural variations in the sense that each individual regards the behaviour of the rest of the community as independent of his own. This paper introduces nonzero conjectural variations into the model. A diagram is introduced which can depict both the individual's and the community's equilibrium in the presence of nonzero conjectural variations. Equilibrium and optimal outcomes are compared, and a specific functional form is used to investigate the effect of community size on the nature of equilibrium. Finally, we discuss the requirement that conjectures should be consistent.     

Price or Quantity Competition? Oligopolistic Structures in International Commodity Markets

International commodity markets may be characterized by price or quantity competition and by product differentiation. As an illustration, this paper presents a set of models of the Japanese market for imported beef. The models are evaluated using a non-nested econometric test. The one which best fits the data is a Stackelberg model with price leadership by Australia. This result provides evidence on the explicit nature of the game being played by exporters, unlike the applied conjectural variations approach which provides only an index of how competitive the market is.     

Firm size and the incentive to differentiate

The conjectural variation is treated as a choice variable capturing the behavioral impact of product differentiation. By this means it is shown that firms have a profit incentive to differentiate, large firms more than small ones, and a differentiating firm more than its rivals.     

Cournot Competition and Hit-and-Run Entry and Exit in a Teaching Experiment

Instructors can use a computerized experiment to introduce students to imperfect competition in courses on introductory economics, industrial organization, game theory, and strategy and management. In addition to introducing students to strategic thinking in general, the experiment serves to demonstrate that profits of a firm fall as the number of competitors is increased in a market and that firms enter profitable markets. The authors have used the experiment in undergraduate classes on strategy and management as well as in master of business administration courses with great success.     

基于VAR的货币供应量对我国上证指数的影响力分析

货币政策会通过货币供应量的变动发挥其政策效果,并借助一定的传导机制,影响一国经济的各个层面,其供应量的变动对资产价格的变动也会造成一定的影响。应用VAR模型,选择一定的变量以及对数据进行整理,对货币供应量对我国上证指数的影响力进行实证分析,发现货币供应一般通过进入经济实体和股市两种途径影响股票市场,M1的增减方向与股市涨跌方向基本同步,M2对上证指数波动的贡献率最大。     

Umbrella branding and external certification

In a market environment with random detection of product quality, a firm can employ umbrella branding as a strategy to convince consumers of the high quality of its products. Alternatively, a firm can rely on external certification of the quality of one or both of its products. We characterize equilibria in which umbrella branding fully or partially substitutes for external certification. We also show that the potential to signal quality is improved if consumers condition their beliefs on the source of information, namely whether information comes from external certification or from random detection.     

State Accountancy Regulations,Audit Firm Size,and Auditor Quality: An Empirical Investigation

This paper extends the literature on occupational licensing by examining the effect of states' licensing requirements for Certified Public Accountants (CPAs). We related variations in licensing requirements across states to CPA firm based assessments of service quality. Based upon prior research, we also examined the relationship between service quality and a market generated quality indicator: CPA firm size. The results show no association between audit quality and variations in regulatory strictness. However, a positive relationship was found between audit quality and firm size, suggesting that market forces, rather than governmental intervention, is effective in addressing the information asymmetry that can exist between CPAs and their clients.