Monopoly power and the firm’s valuation: a dynamic analysis of short versus long-term policies

Summary. Recent anti-trust cases exacerbated the concerns of investors regarding the effects of a firms monopoly power on its production choice, shareholder value, and the overall economy. We address this issue within a dynamic equilibrium model featuring a large monopolistic firm whose actions not only affect the price of its output, but also effectively influence the valuation of its stock. The latter renders time-inconsistency to the firms dynamic production choice. When the firm is required to pre-commit to its strategy, the ensuing equilibrium is largely in line with the predictions of the textbook monopoly model. When the firm behaves in a time-consistent manner, however, the predictions are strikingly at odds. The trade-off between current profits and the valuation of future profits induces the firm to increase production beyond the competitive benchmark and cut prices. This policy may result in destroying shareholder value, and does indeed fully wipe out the firms profit in the limit of the decision-making interval shrinking to zero, in line with the Coase conjecture.Received: 23 December 2003, Revised: 1 March 2004, JEL Classification Numbers: D42, D51, D92, E20, G12.Correspondence to: Anna PavlovaWe thank Steve Spear and the anonymous referees for helpful suggestions. We are also grateful to Franklin Allen, Dave Cass, Peter DeMarzo, Bernard Dumas, Ron Giammarino, Rich Kihlstrom, Leonid Kogan, Branko Urosevic, Dimitri Vayanos, seminar participants at Boston University, University of Colorado at Boulder, Columbia University, MIT, University of Pennsylvania, Princeton University, American Finance Association Meetings, and European Finance Association Meetings for valuable comments. All errors are solely our responsibility.     

Offshoring Quotas and Strategic Export Subsidies

We present an analysis of strategic export subsidization in the presence of exogenous limits on the extent of offshoring that is permissible for a domestic firm. Rather than offsetting a quota’s cost-raising effect, the government reduces its optimal strategic subsidy compounding the negative effects on the domestic firm’s market share. This double jeopardy of lower subsidies and greater offshoring restrictions must reduce domestic profits as well as domestic welfare. Finally, we show that there is no guarantee that such an offshoring quota will raise domestic employment in the oligopolistic sector, calling into question the efficacy of such a barrier.     

The Choice of Technology and Equilibrium Wage Rigidity

In this general equilibrium model, firms engage in oligopolistic competition and choose increasing returns technologies to maximize profits. Capital and labor are the two factors of production. The existence of efficiency wages leads to unemployment. The model is able to explain some interesting observations of the labor market. First, even though there is neither long-term labor contract nor costs of wage adjustment, wage rigidity is an equilibrium phenomenon: an increase in the exogenous job separation rate, the size of the population, the cost of exerting effort, and the probability that shirking is detected will not change the equilibrium wage rate. Second, the equilibrium wage rate increases with the level of capital stock. Third, a higher level of capital stock does not necessarily reduce the unemployment rate. That is, there is no monotonic relationship between capital accumulation and the unemployment rate.     

寡头垄断条件下的要素禀赋理论

本文建立了一个寡头垄断条件下的要素禀赋理论模型,假定技术水平相同的寡头垄断厂商在长期内具有相同的产出水平,那么一国寡头垄断厂商数目就由其经济规模大小决定,从而可以抵消各国经济规模大小对贸易模式的影响,要素丰缺成为贸易模式的唯一决定因素,从而证明要素禀赋理论和要素价格均等化理论在寡头垄断的市场条件下也是成立的。     

寡头型国有土地供应、土地信贷融资与财政调整——基于城市面板数据的联立方程空间计量研究

由土地资源属性和制度决定,国有土地供应出让中形成了受到土地利用规划约束和上级政府管制,由数百个城市寡头厂商组成的土地一级供应市场,并产生了诸多策略行为和机会主义做法。本文运用2003-2008年282个城市面板数据的单方程和联立方程空间计量模型,检验了城市政府围绕土地供应市场份额的策略互动影响、土地信贷融资和土地出让垄断利润的数量关系,并据此构造目标供应量、实际收益和惩罚三者相结合博弈策略选择空间,以形成激励地方政府改善土地供应的财政约束机制。     

银行业海外扩张的寡占反应动机

寡占反应是跨国公司和跨国银行海外扩张的一个重要动机,它的核心概念是寡头、不确定性和风险厌恶,主要表现形式是追随领先者在同一个或同几个国家设立分支机构。中国银行业海外扩张符合寡占反应动机。     

寡头垄断市场结构与寡头垄断企业的效率性分析

经验观察显示,寡头垄断企业已经成为国民财富的源泉和世界“经济增长的发动机”。静态的阿罗-德布鲁范式很难为这一现象提供合理的解释。通过汲取“市场是由企业家所驱动的竞争过程”的奥地利学派思想,笔者发现:由企业家所主导的竞争中的寡头垄断企业,通过不断拓展知识和可利用资源的范围,使消费者的福利得到改进,并增加国民经济的竞争力。本文的分析最终表明:以动态的眼光来看,寡头垄断市场结构和寡头垄断企业是有效率的。其现实含义非常清楚:在竞争全球化的背景下,高度分散的市场结构必然会在竞争中处于不利地位,也不利于企业微观效率的提高和宏观绩效的改进。因此,通过市场而非行政的方式在竞争中培育大企业,最终形成寡头垄断的市场结构应当成为我国市场结构的演进方向。     

跨国公司进入与中国寡头垄断市场结构的形成

我国目前的市场结构具有典型的分散竞争型特征,这种市场结构制约了规模经济的实现,不利于企业的技术创新,也不能适应经济全球化条件下激烈的国际竞争需要.因此,我国应充分利用跨国公司对我国的投资,改善我国的市场结构,提升我国产业的国际竞争力,参与全球范围的垄断性竞争.     

Financial development,the choice of technology,and comparative advantage

In this general equilibrium model, banks and manufacturing firms engage in oligopolistic competition. A more advanced manufacturing technology has a higher fixed cost but a lower marginal cost of production. We show that manufacturing firms located in a country with a more efficient financial sector choose more advanced technologies and this country has a comparative advantage in the production of manufactured goods. Even though the foreign country has a less developed financial sector than the home country, the opening up of trade with the foreign country leads domestic manufacturing firms to adopt more advanced technologies. An increase in the level of efficiency in the financial sector of one country causes manufacturing firms in both countries to adopt more advanced technologies.     

论极限概念的狭义性及其极端猜想

把收敛性数列的和化为小数形式，并且分析可知，其小数是半有理性小数。所以，极限概念是具有狭义性的，其狭义性影响了人类对自然规律的更进一步的探索。