Product Quality,Cost Asymmetry and the Welfare Loss of Oligopoly

When competition is tough, firms which do not implement the least expensive technology are forced to exit, or the low cost firms are able to increase their market share. Persistent cost or profit differences require some form of restricted entry, specific intangible assets or oligopolistic co-ordination. If technology or skills is easy to transfer but it is not transferred because of collusion, we have to add a cost side effect ('the staircase')stemming from the non-proliferation of the best technology- to the well-known demand side loss ('the triangle'). This paper presents a model with vertical product differentiation and develops a method which disentangles cost differences coming from vertical product differences and those coming from other sources. Data for the paper industry in the EU, in the US and in Japan indicate that cost differences are large. If at least some part of them comes from oligopolistic co-ordination, then the welfare loss of oligopoly is much larger than the usually measured demand side welfare loss.     

Strategic segmentation of a market

When competing firms target information towards specific consumers through direct marketing activities, complete segmentation of markets can result. We analyze a two-stage duopoly where, prior to price competition, each firm targets information to specific consumers and only consumers informed by a firm can buy from it. This has the effect of endogenously determining market segments in a model of ‘sales'. In equilibrium, pure local monopoly emerges; firms target and sell to mutually exclusive market segments. When the cost of marketing approaches zero, market shares reflect relative production efficiency (equal shares when firms are symmetric); this may not be the case when marketing cost is high.     

Segmentation, advertising and prices

This paper explores the implications of market segmentation on firm competitiveness. In contrast to earlier work, here market segmentation is minimal in the sense that it is based on consumer attributes that are completely unrelated to tastes. We show that when the market is comprised by two consumer segments and when there is sufficient variation in the per-consumer costs firms need to incur to access the different consumer populations, then firms obtain positive profits in symmetric equilibrium. Otherwise, the equilibrium is characterized by zero profits. As a result, a minimal form of market segmentation combined with advertising cost asymmetries across consumer segments give firms an opportunity to generate positive rents in an otherwise Bertrand-like environment.     

Supply function equilibria of pay-as-bid auctions

This paper characterizes the Nash equilibrium in a pay-as-bid (discriminatory), divisible-good, procurement auction. Demand by the auctioneer is uncertain as in the supply function equilibrium model. A closed form expression is derived for a one shot game. Existence of an equilibrium is ensured if the hazard rate of the demand distribution is monotonically decreasing with respect to the shock outcome and sellers have non-decreasing marginal costs. Multiple equilibria can be ruled out for markets, for which the auctioneer’s demand exceeds suppliers’ capacity with a positive probability. The derived equilibrium can be used to model strategic bidding behavior in pay-as-bid electricity auctions, such as the balancing mechanism of United Kingdom. Offer curves and mark-ups of the derived equilibrium are compared to results for the SFE of a uniform-price auction.      

Environmental policies in a differentiated oligopoly revisited

Constructing a model of polluting oligopoly with product differentiation, we consider how product differentiation, together with the presence and absence of free entry, affects optimal pollution tax/subsidy policies. The sign of the short- and long-run optimal pollution taxes are highly sensitive to the parameter measuring product differentiation as well as the presence of free entry. How they are affected by a change in product differentiation, which is not addressed in the existing literature, is also made clear.     

Ericson-Pakes动态博弈分析框架的发展及其在IO研究中的应用

近年来,基于马尔科夫精炼均衡思想的Ericson-Pakes动态博弈分析框架得到迅速发展。与广泛应用的两期静态模型相比,Ericson-Pakes框架是一种完全动态的研究框架,它考虑了竞争主体的异质性、竞争行为的策略性与竞争过程的随机性,在产业组织应用研究中具有一定优势。本文对Ericson-Pakes框架的发展进行系统阐述。首先,建立Ericson-Pakes框架的基本模型,并给出马尔科夫精炼均衡的严格定义;其次介绍目前应用较广的PM94交叉迭代算法,并比较近年出现的几种新算法的优劣;之后介绍Ericson-Pakes框架的结构参数估计,包括传统嵌套固定点方法与新出现的两阶段估计策略;并结合该框架的最新发展介绍它在广告竞争、产能积累、网络效应、研发等研究议题中的实际应用;最后,指出影响该框架应用的若干问题与发展趋势。     

Entry and Component Pricing in Regulated Markets

This paper discusses work on computable models of entry into regulated markets. Cournot, Stackelberg and Fringe entry are considered for the case where the incumbent operator‘s profitability is regulated and component pricing influences the desirability of entry. The simulation results illustrate that welfare optimal component pricing can be highly sensitive to model specification (behavioural assumptions about agents, the nature of competition, the extent of product differentiation etc.) and that no welfare ranking of simple component pricing rules (such as marginal cost, average cost, opportunity cost or efficient component price) exists. In addition, the welfare desirability of entry is seen to be sensitive to the choice of welfare benchmark for comparison     

Endogenous wage bargaining institutions in oligopolistic sectors

Summary. This paper explores the endogenous emergence of wage bargaining institutions in a union-oligopoly framework. Technological asymmetries among firms are shown to be the driving force for the emergence of alternative wage bargaining centralization structures that are observable in real life. As wage deals at the sector-level obtain the consensus of all unions and the efficient firms, a regulator has an incentive to authorize those deals by activating/establishing a Minimum Sectoral Wage Institution(MSWI). If productivity differences are high enough, wage setting above the established wage floor may subsequently occur in efficient firms. Otherwise, a completely centralized wage bargaining structure emerges and the sector-level wage deal is simply confirmed as the firms wage rate. If, however, productivity asymmetries are rather insignificant, firms and unions have conflicting interests and a completely decentralized wage bargaining regime prevails in equilibrium.Received: 17 December 2001, Revised: 9 June 2003, JEL Classification Numbers: J50, J31, L13.Correspondence to: Emmanuel PetrakisParticular appreciation is expressed to an anonymous referee who has greatly helped us to improve our work upon an earlier draft of this paper. We also wish to thank T. Kollinzas, J. Padilla, H. Bester, J. Sakovics, K. Uwe-Kühn, J. J. Dolado, J. L. Ferreira, A. Matsui and C. Martinelli for their helpful comments and suggestions.     

Pass-Through by Multi-Product Firms

How does cost pass-through to prices depend on the set of products a multi-product firm owns? Using a structural demand model for the Swedish beer market, we simulate equilibrium cost pass-through for varying counterfactual ownership patterns. We find that a firm with a larger number of products in its portfolio and a higher degree of substitutability among these products adopts a lower pass-through of costs. While the direction of results is robust, our simulations show that the muting effect on pass-through is limited when comparing pass-through by stand-alone firms to pass-through under the actual, moderately concentrated market structure.     

从寡头竞争视角看公司治理结构演变在国际贸易中的作用

文章通过构建企业间贸易寡头竞争模型,演示了公司治理结构差异对于企业市场力的影响,认为公司制度的演变在一定的条件下具有与政府政策干预同样的利润转移效应,从而揭示了公司治理结构演变在国际贸易中的作用。