Vertically Linked Industries,Product Quality and Minimum Quality Standards

This paper extends the seminal model of vertical product differentiation by Ronnen (1991) to a two‐tier supply chain. While Ronnen considers the duopoly case, we add a vertical structure such that each downstream firm procures an input from a monopolistic upstream supplier. While simultaneous up‐ and downstream regulation in the form of a minimum quality standard restores Ronnen's findings, if only one firm is regulated in the vertical chain, a free‐rider effect results: all the bargaining power is given to the non‐regulated member of the chain, which uses it to free‐ride on the pressure exerted by the regulator onto the other member.     

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.      

Mixed Market Competition in a Quality Differentiated Duopoly Model An Approach to Banking Sector

This paper attempts to develop a theoretical framework to investigate the competitive implications of quality choices of financial institutions whereby they charge prices to consumers based on their willingness to pay for the service qualities in the mixed market scenario under vertical product differentiation model. Initially, it analyzes benchmark equilibrium solutions of monopoly and duopoly to establish the degree of quality differentiation between two private banks in an uncover market configuration. Further, it estimates the quality differentiation between private and public banks, and examines the interaction between two market structures keeping public bank as both leader and follower, and then measures the social welfare from different prospectives. The explicit operation of two stages Nash equilibrium game forecasted that public banks＇ monopoly seems to be still better than a private banking, and it is socially optimal. The outcome demonstrates a significant importance of vertical quality differentiation for policy implication in banking industry and provides an insight on the reasons of particular co-existence of public and private banking services in the specified location. In this context, it is concluded that the presence of public banks in banking industries is a crucial condition for obtaining the higher range of social welfare.     

Price Competition and Consumer Externalities in a Vertically Differentiated Duopoly with Information Disparities

In this paper, we extend the model of vertical product differentiation to consider information disparities about quality differences and their effects on price competition. If uninformed consumers overestimate vertical differentiation, asymmetric information is a source of market power and informed consumers exert positive externalities on high quality product purchasers and negative externalities on low quality product purchasers. Such a result is consistent with the fact that information undermines brand. If uninformed consumers are skeptical, adverse selection issues arise and market demands may be perfectly inelastic to prices. With elastic demands equilibrium prices may be either distorted downwards or reflect real quality if the share of informed consumers is suffciently high. Therefore, with skeptical consumers firms may want either to signal quality or subsidize information provision.     

非线性定价的福利再分配效应研究——基于非对称双寡头市场的分析

较之"线性定价","非线性定价"在社会福利方面的优势被现有理论反复证明。在肯定"非线性定价"方式能够改进社会总福利的同时,指出并不是每一个市场主体的福利水平都能够通过"非线性定价"方式得到改进。通过建立模型、计算和比较分析,提出了在上述两种情况下,"非线性定价"可能会对特定的市场主体产生"福利剥夺",从而出现福利再分配效应。     

Quality certification standards in competitive markets: When consumers and producers (dis)agree

A quality certification standard in a competitive setting can improve welfare but may affect consumers and producers differently. In a competitive model with quality preferences of the vertical product differentiation type, we find that producers prefer a higher (lower) quality standard than consumers if individual demand functions are log-convex (log-concave).     

基于产品架构与组织能力匹配的内生性创新战略——以日本信息家电企业为例

产品架构与组织能力匹配是模块化时代企业创新的内生动力。在分析产品架构理论的基础上,以日本信息家电企业为例,重点探讨了基于产品架构与组织能力匹配的内生性创新战略,即企业需要针对不同类型的产品架构构建与之相适应的组织能力。最后,针对中国信息家电企业创新提出了具体的对策与思路。     

一个具有双寡头垄断性质的三边贸易模型——以石油市场为例的国家福利实验模拟分析

中国作为大宗商品的国际大买家,争取国际定价权已经成为再也无法回避的问题.有鉴于此出,文章以石油为例,着重探讨石油定价战略选择的经济学机理,在一个具有双寡头垄断性质的三边贸易体系中,对OPEC和非OPEC石油输出国之间的博弈进行了一般均衡分析.根据模型设定参数及实验模拟发现,在Cournot双寡头垄断下,国家M的福利水平增加32.4%,而国家F的福利水平却下降0.8%.由此作出的解释是:与M相反,F是石油净进口国家,高油价和商品y较低的相对价格所产生的负面效应要大于闲暇带来的正面效应.此时,整个社会福利下降0.7%.石油在消费者效用函数中的权重较小时,石油生产的一个负向冲击对福利损失的影响非常有限.在F和M的纯策略集合{双寡头垄断,完全竞争,不生产石油}中,存在唯一的纳什均衡{完全竞争,完全竞争},这使得国家H和F从中获益.模型给人的启示是,除了尽快完善国家石油战略储备体系外,中国应积极参与到石油定价权的争夺中,改变目前完全被动承受油价变动影响的不利地位.     

Optimal Tax Policy under Environmental Quality Competition

This paper studies the socially optimal emission and commodity tax policy when consumers are willing to pay a price-premium for environmentally friendlier variants of a commodity vertically differentiated in environmental quality. The first-best levels of quality can be obtained by a combination of a uniform ad valorem tax and an emission tax (or a subsidy for buying green products). The first-best emission tax is higher than the social valuation of the positive externality associated with average environmental quality. Regardless of environmentally conscious consumers, if only one instrument is available, the second-best emission tax is equal to the social valuation of the positive externality associated with average environmental quality. A uniform ad valorem tax increases welfare only if the social valuation of the positive externality associated with average environmental quality is low enough.     

Minimum quality standards and consumers’ information

The literature so far has analyzed the effects of minimum quality standards (MQS) in oligopoly, using models of pure vertical differentiation, with only two firms, and perfect information. We consider products that are differentiated horizontally and vertically, with imperfect consumers’ information, and more than two firms. We show that a MQS changes the consumers’ perception of produced qualities. This increases the firms’ returns from quality enhancing investments, notwithstanding contrary strategic effects. Our analysis justifies the use of MQS in industries where consumers cannot precisely ascertain the quality of goods, for instance pharmaceuticals or products with chemical components involved. Paper presented at the 2004 ASSET conference in Barcelona, and at the 2005 EARIE conference in Porto. The authors wish to thank an anonymous referee for helpful suggestions.     

Strategic Policy and Environmental Quality: Helping the Domestic Industry to Provide Credible Information

This paper shows that a country can improve an industry's competitiveness by requiring domestic firms to produce at the environmental standards at which they claim to produce or otherwise impose a penalty on those firms found cheating. Competitiveness will improve because this regulation will help the domestic industry to provide credible information about the environmental quality of its production. The credible information will differentiate domestic products from other products on the world market, and in this way increase consumers' willingness to pay for domestic products. Even if the government has no preferences for environmental quality, it has incentives to regulate its cheaters in order to help the domestic industry to provide credible information and thereby improve competitiveness.     

Quality Competition and Social Welfare in Markets with Partial Coverage: New Results*

We use a vertical product differentiation model under partial market coverage to study the social welfare optimum and duopoly equilibrium when convex costs of quality provision are either fixed or variable in terms of production. We show the following new results. First, under fixed costs, the social planner charges a uniform price for the single variant that just covers costs of quality provision. Like the duopoly equilibrium, this socially optimal pricing entails a partially uncovered market, but a smaller share of the market is served compared with the duopoly equilibrium. Second, for the variable cost case, it is socially optimal to provide both high‐ and low‐quality variants, but market shares need not be equal. This differs from the result in fully covered markets. Third, in the duopoly equilibrium, the quality spread is too wide under variable costs relative to the social optimum. Under fixed costs, the duopoly produces two variants, but quality is too low relative to the social optimum, which has only one variant.     

Quality and Welfare in a Mixed Duopoly with Regulated Prices: The Case of a Public and a Private Hospital

Abstract. Hospital markets are often characterized by price regulation and the existence of different ownership types. Using a Hotelling framework, this paper analyses the effect of heterogeneous objectives of hospitals on quality differentiation, profits and overall welfare in a price‐regulated duopoly with exogenous symmetric locations. In contrast to other studies on mixed duopolies, this paper shows that, in this framework, privatization of the public hospital may increase overall welfare. This holds if the public hospital is similar to the private hospital or less efficient and competition is low. The main driving force is the single‐regulated price which induces under‐provision (over‐provision) of quality of the more (less) efficient hospital compared with the first best. However, if the public hospital is sufficiently more efficient and competition is fierce, a mixed duopoly outperforms both a private and a public duopoly due to an equilibrium price below (above) the price of the private (public) duopoly. This medium price discourages over‐provision of quality of the less efficient hospital and – together with the non‐profit objective – encourages an increase in quality of the more efficient public hospital.     

Poverty,competition, democracy,and ownership: A general equilibrium model with vertical preferences

We consider a general equilibrium model where individuals are simultaneously workers, consumers, and shareholders, with two possible market structures: Monopoly and Duopoly, and two extreme ownership structures: egalitarian and concentrated. Considering three standard poverty indicators, the questions are, whether more competition generates more or less poverty for a given ownership structure; and whether a democratic choice between Monopoly and Duopoly leads to the alternative with less poverty. When the ownership is concentrated, we show that Duopoly generates less poverty than Monopoly and the majority votes for the alternative with less poverty. When the ownership is egalitarian, Duopoly may generate more or less poverty and democratic choice alleviates poverty regarding at least one poverty indicator and worsens poverty regarding at least another one, the three poverty indicators never converging. An empirical study on the effect of competition on poverty supports to some extent our theoretical findings.