Strategic Invasion in Markets with Switching Costs

We investigate the role of consumer switching costs in a three-stage model in which the entrant and the incumbent firm set prices sequentially and then the consumers decide from which firm to buy. We characterize the unique subgame perfect equilibrium and find that even an entrant with a higher marginal cost may profitably invade part of the market due to the existence of switching costs. Switching costs benefit both firms but harm consumers. This model is used to understand pricing behavior in the US telecommunications industry.     

Price Discrimination in Input Markets: Downstream Entry and Efficiency

The extant theory on price discrimination in input markets takes the structure of the downstream industry as exogenously given. This paper endogenizes the structure of the downstream industry and examines the effects of permitting third‐degree price discrimination on market structure and welfare. We identify situations where permitting price discrimination leads to either higher or lower wholesale prices for all downstream firms. These findings are driven by upstream profits being discontinuous due to costly entry. Moreover, permitting price discrimination fosters entry which often improves welfare. Nevertheless, entry can also reduce welfare because it may lead to a severe inefficiency in production.     

Price Discrimination in Two‐Sided Markets

We examine the profitability and welfare implications of targeted price discrimination (PD) in two‐sided markets. First, we show that equilibrium discriminatory prices exhibit novel features relative to discriminatory prices in one‐sided models and uniform prices in two‐sided models. Second, we compare the profitability of perfect PD, relative to uniform prices in a two‐sided market. The conventional wisdom from one‐sided horizontally differentiated markets is that PD hurts the firms and benefits consumers, prisoners' dilemma. We show that PD, in a two‐sided market, may actually soften the competition. Our results suggest that the conventional advice that PD is good for competition based on one‐sided markets may not carry over to two‐sided markets.     

Bargains Followed by Bargains: When Switching Costs Make Markets More Competitive

In markets where consumers have switching costs and firms cannot price‐discriminate, firms have two conflicting strategies. A firm can either offer a low price to attract new consumers and build future market share or a firm can offer a high price to exploit the partial lock‐in of their existing consumers. This paper develops a theory of competition when overlapping generations of consumers have switching costs and firms produce differentiated products. Competition takes place over an infinite horizon with any number of firms. This paper shows that the relationship between the level of switching costs, firms' discount rate, and the number of firms determines whether firms offer low or high prices. Similar to previous duopoly studies, switching costs are likely to facilitate lower (higher) equilibrium prices when switching costs are small (large) or when a firm's discount rate is large (small). Unlike previous studies, this paper demonstrates that the number of firms also determines whether switching costs are pro‐ or anticompetitive, and with a sufficiently large (small) number of firms switching costs are pro‐ (anti‐) competitive.     

Disclosure Regulation in Duopoly Markets: Proprietary Costs and Social Welfare

Abstract

The argument of proprietary costs is commonly used by firms to object against proposed disclosure regulations. The goal of this paper is to improve our understanding of the welfare consequences of disclosure in duopoly markets and to identify market settings where proprietary costs are a viable argument for firms to remain silent. We, therefore, solve the optimal disclosure strategies and distinguish two different potentially costly effects of disclosing private information: the strategic information effect and the market information effect. We identify the market settings for which a regulator prefers to impose disclosure regulation so as to maximise consumer surplus or total surplus. Regulation may be necessary because (i) the increase in welfare outweighs proprietary costs to the firms, or (ii) firms are trapped in a prisoners' dilemma. The first primarily applies to Bertrand competition with demand uncertainty and, to a lesser extent, to Cournot competition. The second applies primarily to Cournot competition and Bertrand competition with cost uncertainty.     

Interfirm and Intrafirm Switching Costs in a Vertical Differentiation Setting: Green versus Nongreen Products

In a vertical differentiation model where both duopolists supply the same two qualities of an otherwise homogeneous product, we derive the critical level of the interfirm switching cost needed to sustain monopoly pricing. In particular, we show how a decrease in the intrafirm switching cost may cause a decrease in this critical value, thereby facilitating monopoly pricing. We apply the results to a setting with green and nongreen products—in particular electricity—and discuss implications for policy measures intended to stimulate the production and consumption of green products.     

Using Occupational Preference in Estimating Market Wage Discrimination: the Case of the Gender Pay Gap

ABSTRACT Past occupational preference is used to estimate the gender pay gap. The use of predetermined variables in a reduced-form wage equation avoids the bias caused by using variables that are correlated with the random error. Using a gender coefficient, the potential discriminatory gap is about 11.5 percent when past occupational preference is included. Decomposition yields an estimate of 10.5 percent when past occupational preference is included. In both cases, the discriminatory gap is close to that obtained when actual occupation is included. This suggests public policy directed toward reducing hiring discrimination by gender might be misdirected.     

曼哈特:在供应链管理中关注RFID技术——访曼哈特软件(上海)有限公司大中华区总经理郭仁正

1990年创办于美国加州的曼哈特联合软件公司（Manhattan Associates Inc．，以下简称曼哈特），是一家全球领先的供应链解决方案供应商，总部位于美国亚特兰大。曼哈特以仓库管理软件系统（WMS）起家，在全球范围内为客户提供供应链计划、供应链执行、业务智能和商业智能及业务处理平台等多项服务，有超过1200多家客户。2001年至今，曼哈特已连续5年在全球供应链执行软件领域排名第一。     

资产重组、股价波动与内幕交易——来自中国A股市场重大资产重组的证据

运用事件分析法构建了基于窗口期的内幕交易研究模型,以中国A股市场2008-2012年度重大资产重组事件为样本,研究了资产重组、股价波动和内幕交易的关系。研究发现,我国资本市场重大资产重组中显著存在内幕交易行为,加强关联交易和非国有控股上市公司资产重组监管有助于遏制内幕信息散布,2008年加强重大资产重组信息管理的政策取得了明显效果。     

Planning Feature The Forecast in Detail: [4] Focus: Unit Labour Costs in Manufacturing Industry and the Outlook for Price Inflation

The latest figures show that unit labour costs in manufacturing rose 8.9 per cent in the year to March, the highest rate of increase since 1981 (when costs were decelerating) and a sharp contrast with 1983 when, for a brief period, COSD were stable. In this Focus we examine how this development has occurred and consider its implications. We conclude that the recent figures represent a temporary deterioration in the costs of manufacturing industry and that, once output picks up again and as long as wages respond to the current low rate of inflation, there should be no severe adverse consequences on either inflation or output. If, however, costs are not controlled then the outlook for either inflation or output and unemployment is worse than our central forecast suggests.     

Mergers in Two-Sided Markets: An Application to the Canadian Newspaper Industry

In this paper, we study mergers in two-sided industries and, in particular, the effects of mergers in the newspaper industry. We present a model which shows that mergers in two-sided markets may not necessarily lead to higher prices for either side of the market. We test our conclusions by examining a spate of mergers in the Canadian newspaper industry in the late 1990s. Specifically, we analyze prices for both circulation and advertising to try to understand the impact that these mergers had on consumer welfare. We find that greater concentration did not lead to higher prices for either newspaper subscribers or advertisers.     

Markets with heterogeneous beliefs: A necessary and sufficient condition for a trader to vanish

What does it take to survive in the market? Previous literature has proposed sufficient conditions for a trader to vanish, which depend on pairwise comparisons of traders’ discounted beliefs. We propose a novel condition that focuses on the ratio of traders’ discounted beliefs and (approximate) equilibrium prices. Unlike existing conditions, ours is both necessary and sufficient for a trader to vanish and delivers the exact rate at which vanishing traders lose their consumption shares. As an application, we analyze the performance of two intuitive behavioral strategies: the “Follow the Leader Strategy” that prescribes mimicking the beliefs of the most successful trader, and the “Follow the Market Strategy” that prescribes to use beliefs which coincide with the state price density. Further, we show that the relative performance of vanishing traders cannot be studied in isolation. Our analysis highlights an intuitive point obscured by the existing conditions: trading in financial markets is qualitatively different from bilateral trading.     

浅谈电子商务在医药行业中的应用——如何让老百姓看得起病?

医改是一项重大民生工程,如何缓解人民群众反映强烈的看病难、看病贵问题,一直是老百姓关注的问题,也是政府想解决的问题。本文就电子商务在医药行业的应用进行了一系列分析和研究,并提出了合理化建议。     

Arbitration of Statutory Employment Discrimination Claims in a Nonunion Environment: A Guide to Procedural Fairness

The previous decade has seen an increasing trend toward the use of arbitration to resolve statutory employment discrimination claims. The enforceability of most private sector arbitration agreements arising in a nonunion setting is reviewable under the Federal Arbitration Act. Such arbitration agreements are most often created by management and become a condition of employment. To represent a feasible alternative to court litigation, employers and employees must have confidence that outcomes achieved through the arbitration process will be enforced by the courts as final and binding upon the parties to the dispute. The extent to which an arbitration agreement adequately protects the procedural and remedial rights of the participants is an important issue affecting the probability that a court will enforce the outcome of an arbitration procedure. This paper reviews guidelines provided by the courts and practitioners to aid in the design of an effective and legally enforceable arbitration procedure to resolve statutory employment discrimination claims arising in a private sector nonunion environment.     

The Cyclicality of Markups in a Model with Adjustment Costs: Econometric Evidence for US Industry

In this paper we investigate the impact of demand fluctuations on market power in US manufacturing industries. We impose on a model with adjustment costs the minimum structure necessary to recover a measure of markups. Markups are allowed to vary with both the state and future evolution of demand and estimates of price-cost margins are obtained from the Euler equation for capital. We conduct the empirical investigation for US two-digit manufacturing industries using annual data covering the 1952–1985 period. We find that markups are inversely related to current demand. However, given the state of demand, they vary directly with expectations of future demand changes.     

Pay determination in small firms in the UK: the case of the response to the National Minimum Wage

Pay determination in small firms is widely expected to follow the dictates of the market. Research on 81 firms in three competitive sectors finds, instead, loosely defined and variable pay structures. This variability is explained in terms of the interplay between labour and product markets, firms’ own choices, and ‘shocks’ such as the National Minimum Wage. This analysis thus contributes to developing institutional theories of labour markets and pay systems.     

Factors Influencing Consumer Willingness to Pay for Low‐Carbon Products: A Simulation Study in China

Consumer choice behavior is crucial to supporting cleaner production and plays an essential role in low‐carbon development and environmental policy‐making. Therefore, combining system dynamics with an agent‐based model (SD–AB), the present study explores influencing factors on both providers' and consumers' sides. Using empirical data from selected firms and a questionnaire survey of residents in China, the simulation results revealed that consumers' low‐carbon awareness and income have little effect on their willingness to pay for low‐carbon products. In contrast, some factors have an obvious effect on consumers' willingness to pay for low‐carbon products, including the delivery speed of low‐carbon products, consumers' patience and degree of satisfaction. Thus, companies that provide low‐carbon products should be more focused on customer expectations and should ensure timely and efficient delivery to consumers. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment