A Two-stage Cournot Duopoly with Inventory Costs

This paper analyses the Cournot duopoly model which has two production periods before the market clears. As shown by Saloner (1987), if inventory costs are zero, many outcomes including both Cournot and Stackelberg outcomes are subgame perfect equilibrium outcomes. However, if small inventory costs are introduced, the Cournot outcome is no longer found in equilibrium and the equilibrium outcomes are only of Stackelberg-type. This suggests that more attention should be paid to the Stackelberg model than to the Cournot model.     

Strategic Auditor Behavior and Going-Concern Decisions

This paper analyzes a game-theoretic model in which a client can potentially avoid a going-concern opinion and its self-fulfilling prophecy by switching auditors. Incumbent auditors are less willing to express a going-concern opinion the more credible the client's threat of dismissal and the stronger the self-fulfilling prophecy effect. Similarly, the client is more willing to switch auditors the more likely it is that auditors' reporting judgments will differ and the stronger the self-fulfilling prophecy effect. Further, with greater noise in the auditor's forecast of client viability, the auditor tends to express fewer going-concern opinions.     

Stackelberg Mixed Duopoly with a Foreign Competitor

We investigate Stackelberg mixed duopoly models where a state‐owned public firm and a foreign private firm compete. We examine a desirable role (either leader or follower) of the public firm. We also consider endogenous roles by adopting the observable delay game of Hamilton and Slutsky (1990). We find that, in contrast to Pal (1998) discussing a case of domestic competitors, the public firm should be the leader and that it becomes the leader in the endogenous role game. We also find that in contrast to Ono (1990) eliminating a foreign firm does not improve domestic welfare in mixed oligopolies.     

Information Disclosure Policies: When Do They Bring Environmental Improvements?

There has been a growing interest among policy makers on the use of information disclosure policies for pollution control. This paper theoretically assesses the consequences of information disclosure policies and identifies the conditions under which such policies are likely to bring environmental improvements. Based on a dynamic game framework, the paper shows that both eco-labeling and more general full information disclosure policies may not always result in pollution reduction. Full information disclosure policies are likely to be effective if the product is not heavily polluting and if the minimum quality standard is set quite low. The paper also identifies the conditions under which all consumers are strictly better off with information disclosure policies.

Individual preferences on trade liberalization: evidence from a Japanese household survey

This paper studies an individual’s preference on trade liberalization using a Japanese household survey, the Keio Household Panel Survey. As a result, we show that preferences toward trade liberalization are affected by economic factors (income, gender, family, asset, and job status) as well as noneconomic factors (noncognitive factors and behaviroal biases). We find that male, educated, and people with smaller family prefer trade liberalization. Furthermore, people who prefer liberty to equality and have less local patriotism, tend to be positive to trade liberalization.