A variational principle, coupled fixed points and market equilibrium

We present a possible kind of generalization of the notion of ordered pairs of cyclic maps and coupled fixed points and its application in modelling of equilibrium in oligopoly markets. We have obtained sufficient conditions for the existence and uniqueness of coupled fixed in complete metric spaces. We illustrate one possible application of the results by building a pragmatic model on competition in oligopoly markets. To achieve this goal, we use an approach based on studying the response functions of each market participant, thus making it possible to address both Cournot and Bertrand industrial structures with unified formal method.We show that whenever the response functions of the two players are identical, then the equilibrium will be attained at equal levels of production and equal prices. The response functions approach makes it also possible to take into consideration different barriers to entry. By fitting to the response functions rather than the profit maximization of the payoff functions problem we alter the classical optimization problem to a problem of coupled fixed points, which has the benefit that considering corner optimum, corner equilibrium and convexity condition of the payoff function can be skipped

Vertical cooperative advertising models: a new game theoretic approach

Nel capitolo 1° viene introdotta la strategia di cooperazione verticale nelle spese pubblicitarie. Nel capitolo 2° invece, si spiegano dei concetti fondamentali di teoria dei giochi, che verranno poi applicati nel capitolo 3° (dove si presentano 3 pubblicazioni scientifiche) e nel capitolo 4° è introdotto un nuovo modell

Essays in organization formation and decision making

This thesis consists of three essays in microeconomic theory. The first two are about the formation of organizations, and the third is about individual or organizational decision making in ambiguous settings. In the first essay I explore the implications of costs associated with binding agreements on equilibrium agreement structures. Establishing binding agreements is often costly in real world economies. These contracting costs are usually regarded as harmful by economists as the costs decrease the gains from cooperation. They affect which agreements form by changing the incentives of agents, potentially prevent the establishment of efficient contracts. Using an alternating offers bargaining model of coalition formation I show that the presence of transaction costs can lead to an efficient outcome in situations where inefficiency arises in equilibrium without these costs. These results provide new insights for policies targeting transaction costs. There are many situations in Economics and Political Science that involve limited possibilities for firms or parties to organize themselves into groups, mostly due to regulatory restrictions. In addition, in these settings the surplus of a given group often depends on the organizational structures formed outside of the group. The second essay introduces a coalition formation model that is able to analyze markets with both restricted cooperation and externalities across coalitions. This concept allows a more realistic modeling, opening the possibility to use this framework to analyze the welfare effects of mergers. In the third essay I propose a new model of decision making under uncertainty with multiple priors that is, unlike the well-known model of Gilboa and Schmeidler (1989), able to express attitude towards ambiguity. In addition, the decision does not necessarily depend on the two extreme (worst case and best case) priors as in the model of Ghirardato et al. (2001). I use choice correspondences by lexicographic semiorders that are generalizations of the choice functions defined in Manzini and Mariotti (2012). I also provide a method constructing lexicographic semiorders for choosing from ambiguous acts

Economics of Spectrum Allocation in Cognitive Radio Networks

Cognitive radio networks (CRNs) are emerging as a promising technology for the efficient use of radio spectrum. In these networks, there are two levels of networks on each channel, primary and secondary, and secondary users can use the channel whenever the primary is not using it. Spectrum allocation in CRNs poses several challenges not present in traditional wireless networks; the goal of this dissertation is to address some of the economic aspects thereof. Broadly, spectrum allocation in CRNs can be done in two ways- (i) one-step allocation in which the spectrum regulator simultaneously allocates spectrum to primary and secondary users in a single allocation and (ii) two-step allocation in which the spectrum regulator first allocates spectrum to primary users, who in turn, allocate unused portions on their channels to secondary users. For the two-step allocation scheme, we consider a spectrum market in which trading of bandwidth among primaries and secondaries is done. When the number of primaries and secondaries is small, we analyze price competition among the primaries using the framework of game theory and seek to find Nash equilibria. We analyze the cases both when all the players are located in a single small location and when they are spread over a large region and spatial reuse of spectrum is done. When the number of primaries and secondaries is large, we consider different types of spectrum contracts derived from raw spectrum and analyze the problem of optimal dynamic selection of a portfolio of long-term and short-term contracts to sell or buy from the points of view of primary and secondary users. For the one-step allocation scheme, we design an auction framework using which the spectrum regulator can simultaneously allocate spectrum to primary and secondary users with the objective of either maximizing its own revenue or maximizing the social welfare. We design different bidding languages, which the users can use to compactly express their bids in the auction, and polynomial-time algorithms for choosing the allocation of channels to the bidders

Preiswettbewerb in Oligopolen mit Nachfragerationierung: Experimentelle Untersuchungen

This dissertation contains three closely related papers on price competition in experimental oligopoly markets. The theoretical basis is Edgeworth’s critique of the classical Bertrand model and the approach by Kreps and Scheinkman which may be considered as synthesis of the Cournot and the Bertrand model. All market settings investigated in the three papers have in common that the type of demand rationing, i.e. the order in which customers are served, influences the theory prediction. Chapter II considers price competition in Bertrand-Edgeworth markets with increasing marginal production costs. Chapter III deals with the Kreps-Scheinkman model, stipulating a two-stage setting in which firms simultaneously choose capacities first and prices thereafter. Chapter IV studies Bertrand-Edgeworth markets with fixed exogenous capacity constraints. In all three studies, the effects of several treatment variables, notably the sort of demand rationing, on the market outcome are investigated. Individual behavior is compared to the Nash equilibrium prediction, and alternative theories that may explain the dynamics of individual decisions are assessed.Diese Dissertation beinhaltet drei in enger Verbindung stehende Untersuchungen über Preiswettbewerb in experimentellen Oligopolmärkten. Die theoretische Grundlage bilden Edgeworths Kritik am klassischen Bertrand-Modell sowie das Modell von Kreps und Scheinkman, das als Synthese des Cournot- und des Bertrand-Modells betrachtet werden kann. Die in den drei Studien untersuchten Märkte haben gemeinsam, dass die spieltheoretische Gleichgewichtsvorhersage von der Art der Nachfragerationierung, d.h. der Reihenfolge, in der die Nachfrager bedient werden, beeinflusst wird. Kapitel II untersucht Bertrand-Edgeworth-Märkte mit steigenden Produktionsgrenzkosten. Kapitel III betrachtet das Kreps-Scheinkman-Modell, in dem ein zweistufiger Prozess angenommen wird, sodass die Firmen zunächst simultan ihre Produktionskapazitäten und danach ihre Preise festlegen. Kapitel IV behandelt Bertrand-Edgeworth-Märkte mit fixen exogenen Kapazitätsschranken. In allen drei Untersuchungen werden die Effekte verschiedener Treatment-Variablen, insbesondere der Art der Nachfragerationierung, auf das Marktergebnis analysiert. Individuelles Verhalten wird der aus dem Nash-Gleichgewicht abgeleiteten Vorhersage gegenübergestellt, und es werden alternative Theorien untersucht, die die Dynamik individueller Entscheidungen potenziell erklären

Essays in technology gap and process spillovers at the firm level

Ph.DDOCTOR OF PHILOSOPH

IT-enabled Monitoring in the Gig Economy

abstract: Two-sided online platforms are typically plagued by hidden information (adverse selection) and hidden actions (moral hazard), limiting market efficiency. Under the context of the increasingly popular online labor contracting platforms, this dissertation investigates whether and how IT-enabled monitoring systems can mitigate moral hazard and reshape the labor demand and supply by providing detailed information about workers’ effort. In the first chapter, I propose and demonstrate that monitoring records can substitute for reputation signals such that they attract more qualified inexperienced workers to enter the marketplace. Specifically, only the effort-related reputation information is substituted by monitoring but the capability-related reputation information. In line with this, monitoring can lower the entry barrier for inexperienced workers on platforms. In the second chapter, I investigate if there is home bias for local workers when employers make the hiring decisions. I further show the existence of home bias from employers and it is primarily driven by statistical inference instead of personal “taste”. In the last chapter, I examine if females tend to have a stronger avoidance of monitoring than males. With the combination of the observational data and experimental data, I find that there is a gender difference in avoidance of monitoring and the introduction of the monitoring system increases the gender wage gap due to genders differences in such willingness-to-pay for the avoidance of monitoring. These three studies jointly contribute to the literature on the online platforms, gig economy and agency theory by elucidating the critical role of IT-enabled monitoring.Dissertation/ThesisDoctoral Dissertation Business Administration 201

Knowledge and Management Models for Sustainable Growth

In the last years sustainability has become a topic of global concern and a key issue in the strategic agenda of both business organizations and public authorities and organisations. Significant changes in business landscape, the emergence of new technology, including social media, the pressure of new social concerns, have called into question established conceptualizations of competitiveness, wealth creation and growth. New and unaddressed set of issues regarding how private and public organisations manage and invest their resources to create sustainable value have brought to light. In particular the increasing focus on environmental and social themes has suggested new dimensions to be taken into account in the value creation dynamics, both at organisations and communities level. For companies the need of integrating corporate social and environmental responsibility issues into strategy and daily business operations, pose profound challenges, which, in turn, involve numerous processes and complex decisions influenced by many stakeholders. Facing these challenges calls for the creation, use and exploitation of new knowledge as well as the development of proper management models, approaches and tools aimed to contribute to the development and realization of environmentally and socially sustainable business strategies and practices

Reputation and professional services: Survival, teams and incentives.

Following the opening chapter, which surveys existing literature on the issue of the interaction between individual and group reputation, the remaining chapters each address a simple question to better understand how reputation affects outcomes and incentives. Specifically: Even though good and bad luck might affect short term reputations, do agents end up with the reputations that they deserve, that is one that reflects their genuine underlying ability. The central result of Chapter 2 is that, if the agent knows her own ability (though customers can only make inferences by observing history) then eventually the truth will out. How can an agent, who has proven her ability, commit to working hard. Once an agent has established a reputation then it is a tautology to say that she has no reputational concern. However, if effort is efficient she may want to commit to exerting effort and get adequately rewarded. Chapter 3 shows that one way that she may be able to do this is by hiring and working with a junior agent of uncertain ability. Do teams care any more or less about their reputations than individuals. Joint work with Juanjo Ganuza and introduced in Chapter 4 suggests that an important aspect in answering this question would be to determine whether an agent or team's reputational concerns are primarily about a concern to show itself to be excellent and capable in every task, or about a concern to avoid customers thinking that it is inept. How does industry structure affect a firm's ability to commit to producing high quality. The final chapter discusses this question and suggests that a number of different effects are in play so that there is no simple answer

Development of a process for the preparation of linalool from CIS-2-pinanol

Linalool is a key intermediate for the production of important fragrance chemicals such as geraniol, nerol, geranial, and neral. Linalool can be produced via a two-step process from α-pinene which is a major component of crude sulphated turpentine (CST) a foul-smelling, volatile waste product of the pulp and paper industry. The key step in this process is the pyrolysis step which involves the isomerisation of cis-2-pinanol to linalool and requires high temperatures (600-650°C) and is not very selective due to the decomposition of the product itself under these conditions. A client of the CSIR, Teubes Pty. Ltd., is a manufacturer of flavour and fragrance compounds for the local and international fragrance market and expressed an interest in producing linalool since the company would then gain access to other valuable fragrance chemicals via relatively simple processes. Earlier work conducted by AECI, R & D did not meet with much success since the selectivity to linalool was very poor and the process could hardly be deemed as scalable. The main objective of this project was therefore to develop a process for the selective isomerisation of cis-2-pinanol to linalool with minimum by-product formation and using process equipment that could be scaled to full-scale production. Since cis-2- pinanol could not be purchased in sufficient quantities for process development, a process had to be developed for the bench-scale preparation of kilogram quantities of cis-2-pinanol from α-pinene obtained from the client. Although this synthesis formed a minor part of this investigation, several process improvements and innovations were introduced to produce high quality cis-2-pinanol, in very good yields at kilogram scale. A major part of this investigation was the design and set up of a pyrolyis rig capable of operating at elevated temperatures (400 - 750°C) for the evaluation of various process parameters. Various vaporizer, reactor, and condensation systems were evaluated for their ability to cope with the demanding conditions on a consistent basis. The initial part of the investigation was a screening exercise to evaluate various process parameters as well as solvents, materials of construction, catalysts, etc. A comprehensive statistical design was also conducted to determine the critical process parameters and the model obtained was used to predict the optimum conditions required for the preparation of in-specification product on a consistent basis. These conditions were used in the preparation of a 1kg sample which was required by theclient for market evaluation purposes. The use of a novel microreactor system was also evaluated for the pinanol pyrolysis reaction. To our knowledge, this is the first time that a microreactor has been successfully used for this type of reaction in the Fragrance industry and a patent application is being filed by the CSIR. The kinetics of the reaction in both the tubular reactor system and the microreactor system was investigated. Computer modelling studies on both the systems were also conducted. The raw material cost to produce a kilogram of linalool is $1.40. There is a significant margin of 60.8 percent between the raw material cost of linalool and the current selling price ($3.57/kg). This clearly indicates that the project is potentially feasible from an economic point of view and we can now proceed with confidence to the next stage which is the engineering design, building and commissioning of the large scale pyrolysis rig. The rest of the process steps will be conducted on existing equipment currently present at the CSIR’s large scale facility (Imbiza in Isando, Gauteng)