Dynamics of a discrete-time mixed oligopoly Cournot-type model with three time delays

The paper analyzes the interactions among one public firm and $n$ private firms on the market, in the framework of a discrete-time Cournot game with time delay. The production of the public firm is influenced by previous output levels of private firms. The productions of private companies are influenced by the past productions of the public company, as well as by the previous productions of the other private companies. The associated nonlinear system admits two equilibrium points: the positive one and the boundary equilibrium. After the stability analysis, we obtained that the boundary equilibrium point is a saddle point. If there is no delay, for the positive equilibrium point we have determined the stability region. Then, for different particular cases of delays, we found the conditions for which the positive equilibrium is asymptotically stable. The flip and Neimark-Sacker bifurcations are investigated. In addition, numerous numerical examples are performed to reveal the complex dynamic behavior of the system

Antitrust

This is a survey of the economic principles that underlie antitrust law and how those principles relate to competition policy. We address four core subject areas: market power, collusion, mergers between competitors, and monopolization. In each area, we select the most relevant portions of current economic knowledge and use that knowledge to critically assess central features of antitrust policy. Our objective is to foster the improvement of legal regimes and also to identify topics where further analytical and empirical exploration would be useful.

SIMULATING THE EFFECTS OF ADOPTION OF GENETICALLY MODIFIED SOYBEANS IN THE U.S.

The paper models the distributional effects of partial adoption of genetically modified soybeans under the assumptions of imperfectly competitive markets and identity preservation requirements. Our results show the welfare costs of market imperfections and improve understanding the diffusion of innovation in agriculture.Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies,

Essays on Imperfect and Dynamic Competition

This dissertation studies issues of imperfect and dynamic competition taking as motivation strategic interaction in the United States paper industry. The components of this work focus on both theoretical and empirical issues that arise in asymmetric oligopoly markets more generally. The first chapter considers that when consumers recycle a good, the future supply of intermediate inputs increases. If some of the inputs are used to manufacture a good that competes with the original good, the initial seller faces an incentive to reduce its supply to limit this source of future competition. I illustrate this incentive in a model of dynamic oligopoly, and test the predictions using data from the US paper industry between 1973 and 1993. I find that firms decrease quantity in response to policy changes that increase competition from firms using the recycled input. I then use the model to illustrate two implications: (i) the response to strategic incentives may lead antitrust authorities to underestimate the exercise of pre-merger market power, and horizontal mergers let firms internalize their effects on future competition, resulting in a greater supply reduction post-merger; and (ii) the policy trade-off between reducing harms from pollution and reducing the exercise of market power under oligopoly is sharper when firms respond to dynamic incentives. In the second chapter, I develop a tractable oligopoly model that preserves many of the predictions of the dominant firm model. Antitrust policy looks with skepticism on dominant firms as they are in position to leverage the position into higher profits at the expense of consumers and rival firms. I show the equilibrium price is higher and market share of the dominant firm is smaller in the dominant firm model in comparison to my oligopoly model. This suggests that the assumption on supply side strategic behavior are important for market outcomes. When the number of leaders is endogenous, more firms enter when rivals are price-takers. This result suggests barriers to entry must be high to sustain dominant market structures.Doctor of Philosoph

Dynamic Duopoly with Differentiated Goods and Sluggish Demand

This thesis investigates dynamic Bertrand competition between two firms in a market where the goods are differentiated and demand is sluggish. Unlike homogeneous goods, differentiated goods are not perfect substitutes for each other. Sluggish demand means that there is a delay in the adjustment of demand after price changes. Sluggish demand is a remarkably ignored topic in the economic literature. The competitive situation is modelled as a differential game. The dynamic model employs the demand system as in Singh and Vives 1984 and dynamics as in Wirl 2010. It is shown that the dynamic model has a unique symmetric open-loop Nash equilibrium. The long-term open-loop steady state is compared with the equilibrium point of the static model. The fundamental mathematical theory and solution methods of optimal control theory and differential games that are required in the analysis of the model are also presented in the thesis. As the main result of the analysis of the model, it is shown that when sluggishness of demand is relatively small (i.e. the adjustment of demand after price changes is sufficiently fast), sluggishness of demand increases the market power and profits of the firms in the open-loop steady state compared to the equilibrium point of the static model. After sluggishness of demand exceeds a certain point, the profits of the firms decline below the static equilibrium profits. Moreover, it is shown that product differentiation relaxes price competition also in the presence of sluggish demand, as it does in a static model.Tutkielmassa tarkastellaan kahden yrityksen välistä dynaamista Bertrand-kilpailua markkinoilla, joilla hyödykkeet ovat differoituja ja kysyntä on jäykkää. Toisin kuin homogeeniset hyödykkeet, differoidut hyödykkeet eivät ole täydellisiä korvikkeita toisilleen. Kysynnän jäykkyys tarkoittaa sitä, että kysyntä sopeutuu viiveellä hinnanmuutoksiin. Kysynnän jäykkyys on yllättävän vähälle huomiolle jäänyt aihe taloustieteellisessä kirjallisuudessa. Kilpailutilanne mallinnetaan differentiaalisena pelinä. Dynaamisen mallin kysyntäjärjestelmä on kuten Singh ja Vivesin (1984) ja dynamiikka kuten Wirlin (2010) artikkelissa. Dynaamisella mallilla osoitetaan olevan uniikki symmetrinen open-loop Nash -tasapainostrategia. Pitkän aikavälin open-loop -tasapainopistettä vertaillaan staattisen Bertrand-mallin tasapainopisteen kanssa. Tutkielmassa esitetään lisäksi mallin tarkasteluun vaadittavan optimaalisen kontrolliteorian ja differentiaalisten pelien keskeinen matemaattinen teoria ja ratkaisumenetelmät. Mallin analyysin päätuloksena osoitetaan, että kun kysynnän jäykkyys on verrattain pientä (ts. kysynnän sopeutuminen hinnanmuutoksiin on riittävän nopeaa), kysynnän jäykkyys lisää yritysten markkinavoimaa ja voittoja open-loop -tasapainopisteessä verrattuna staattiseen tasapainopisteeseen. Kun kysynnän jäykkyys ylittää tietyn pisteen, yritysten voitot laskevat staattisten tasapainovoittojen alle. Lisäksi osoitetaan, että tuotedifferointi pehmentää hintakilpailua myös kysynnän jäykkyyden olosuhteissa, aivan kuten staattisessa mallissa

On Turkey's European Trade Policy: How Desirable is a Status Quo

International Relations/Trade,

Open Access to Telecommunications Infrastructure and Digital Services: Competition, Cooperation and Regulation

Open Access, defined as the non-discriminatory access to an upstream bottleneck resource, takes a central role in information and communications technology markets. This thesis investigates the competitive and cooperative interactions in these markets, where firms require access to an essential input resource. Theoretical analyses and experimental evaluations are employed to examine market outcomes under alternative regulatory institutions and voluntary access agreements

Learning in agent based models

This paper examines the process by which agents learn to act in economic environments. Learning is particularly complicated in such situations since the environment is, at least in part, made up of other agents who are also learning. At best, one can hope to obtain analytical results for a rudimentary model. To make progress in understanding the dynamics of learning and coordination in general cases one can simulate agent based models to see whether the results obtained in skeletal models translate into the more general case. Using this approach can help us to understand which are the crucial assumptions in determining whether learning converges and, if so, to which sort of state. Three examples are presented, one in which agents learn to form trading relationships, one in which agents misspecify the model of their environment and a last one in which agents may learn to take actions which are systematically favourable, (or unfavourable) for them. In each case simulating models in which agents operate with simple rules in a complex environment, allows us to examine the role of the type of learning process used by the agents the extent to which they coordinate on a final outcome and the nature of that outcome.Learning; agent based models; simulations; equilibria; asymmetric outcomes

Common Ownership: Do Managers Really Compete Less?

This Article addresses an important question in modern antitrust: when large investment funds have holdings across an industry, is competition depressed? The question of the impact of common ownership on competition has gained much attention as the role of institutional shareholding has grown, with the funds of the three largest management companies holding in aggregate approximately 21% of the shares of a typical S&P 500 firm. It is a source of acute disagreement among scholars and policymakers, with some who believe common ownership does depress competition seeking antitrust law reforms that would significantly constrain how investment funds operate. Neglected in this vigorous debate, however, is a careful analysis of how the persons who in the first instance actually make the decisions that determine an industry’s competitiveness – firm managers – would act differently in the presence of common ownership. In essence, even if the common owners were to pressure firms to compete less, how, if at all, would that change the structure of incentives within which these managers work? The forces that shape managerial decision-making at publicly traded firms have been the object of intense study by scholars of corporate governance for decades, primarily through use of managerial agency cost analysis. The question of how the dynamics among firms in a concentrated industry affect its level of competition has been subject to similarly intense scrutiny by industrial organization economists. We use learning from both of these fields to conclude that, at current levels, common ownership is unlikely to have a meaningful effect on the managerial structure of incentives in ways that the industrial organization theories suggest would affect competition. This conclusion thus cautions against the proposed antitrust reforms, which would solve a non-problem while adding to the costs of the investment vehicles of choice for tens of millions of ordinary Americans