Defensive Resource Allocation in Social Networks

In this work, we are interested on the analysis of competing marketing campaigns between an incumbent who dominates the market and a challenger who wants to enter the market. We are interested in (a) the simultaneous decision of how many resources to allocate to their potential customers to advertise their products for both marketing campaigns, and (b) the optimal allocation on the situation in which the incumbent knows the entrance of the challenger and thus can predict its response. Applying results from game theory, we characterize these optimal strategic resource allocations for the voter model of social networks.Comment: arXiv admin note: text overlap with arXiv:1402.538

Optimal Divisionalization for Selling Networks of Cable Television Services

In this article, a condition for the optimal division’s number is calculated, for a market with two cable operators who offer a network service. The rationale for justifying the partial covering of the national market from the cable operators is presented. Furthermore, a problem of moral hazard is revealed, which is able to appear through the implementation of franchising schemes with independent divisions. This is particularly interesting because it can be applied to several industries such as Cable Television and Entertainment, and other activities including Internet and Computer Games Centres, which offer Internet broadband access and network games.Cable Television, Divisionalization, Franchising.

Congestion pricing of inputs in vertically related markets

This paper conducts a welfare analysis of a two-part tariff that is applied to the congestion pricing of inputs supplied by a natural monopolist with increasing returns to scale to competitive firms that require an input in a fixed proportion to output. Congestion pricing of inputs is optimal for both the welfare-maximizing regulator and the profit-maximizing monopolist if it is applied in the form of a uniform price for the input. However, a two-part tariff for the congestion pricing of inputs is optimal if competition in the downstream market is imperfect or if there is demand uncertainty in the market.two-part tariff

Fostering Fair and Sustainable Marketing for Social Entrepreneurs in the Context of Subsistence Marketplaces

In recent years, in-depth, on-the-ground research has generated many insights into the nature and functioning of subsistence marketplaces and the people who operate in them. Such knowledge is bound to be useful to various companies and organisations, as they seek to engage such marketplaces, particularly for marketing managers, who quite likely have not had education or experience in marketing in such impoverished settings. This paper complements these practical insights with a normative ethical framework, presented in the marketing literature and labelled the integrative justice model (IJM) for impoverished markets, so as to synthesise a new framework for fair and sustainable marketing for social entrepreneurs in the context of subsistence marketplaces

A Dynamic Incentive Mechanism for Transmission Expansion in Electricity Networks: Theory, Modeling, and Application

We propose a price-cap mechanism for electricity-transmission expansion based on redefining transmission output in terms of financial transmission rights. Our mechanism applies the incentive-regulation logic of rebalancing a two-part tariff. First, we test this mechanism in a three-node network. We show that the mechanism intertemporally promotes an investment pattern that relieves congestion, increases welfare, augments the Transco´s profits, and induces convergence of prices to marginal costs. We then apply the mechanism to a grid of northwestern Europe and show a gradual convergence toward a common-price benchmark, an increase in total capacity, and convergence toward the welfare optimum.Electricity transmission expansion, incentive regulation

Regional monopoly and interregional and intraregional competition: the parallel trade in Coca-Cola between Shanghai and Hangzhou in China

This article uses a “principal-agent-subagent” analytical framework and data that were collected from field surveys in China to (1) investigate the nature and causes of the parallel trade in Coca-Cola between Shanghai and Hangzhou and (2) assess the geographic and theoretical implications for the regional monopolies that have been artificially created by Coca-Cola in China. The parallel trade in Coca-Cola is sustained by its intraregional rivalry with Pepsi-Cola in Shanghai, where Coca-Cola (China) (the principal) seeks to maximize its share of the Shanghai soft-drinks market. This goal effectively supersedes the market-division strategy of Coca-Cola (China), since the gap in wholesale prices between the Shanghai and Hangzhou markets is higher than the transaction costs of engaging in parallel trade. The exclusive distributor of Coca-Cola in the Shanghai market (the subagent) makes opportunistic use of a situation in which it does not have to bear the financial consequences of the major residual claimants (the principal and other agents) and has an incentive to enter the nondesignated Coca-Cola market of Hangzhou by crossing the geographic boundary between the two regional monopolies devised by Coca-Cola. The existence of parallel trade in Coca-Cola promotes interregional competition between the Shanghai and Hangzhou bottlers (the agents). This article enhances an understanding of the economic geography of spatial equilibrium, disequilibrium, and quasi-equilibrium of a transnational corporation's distribution system and its artificially created market boundary in China