Product differentiation in a mixed duopoly

This paper analyzes a mixed duopoly with horizontal product differentiation using the unconstrained Hotelling model with quadratic transport costs. Firms play a noncooperative two-stage game on locations (first stage) and prices (second stage), and we consider that the firms move simultaneously or sequentially in both stages. We examine how the presence of a public firm affects both locations (the nature and degree of differentiation) and prices at equilibrium, and we compare these with the results of the private duopoly, in order to determine the effects of privatization. We find that, save in cases where the private firm is leader on prices where there are multiple equilibria, in the remainder of the cases there are two symmetrical equilibria (depending on whether one firm is located to the left or right of the other); the degree of differentiation of the product and the prices are lower; and the social welfare is higher than in the private duopoly. Privatization of the public firm is therefore not socially desirableMixed duopoly; spatial competition; privatization

The strategic timing of R&D agreements.

We present a model of endogenous formation of R&D agreements among firms in which also the timing of R&D investment is made endogenous. The purpose is to bridge two usually separate streams of literature, the noncooperative formation of R&D alliances and the endogenous timing literature. Our approach allows to consider the formation of R&D agreements over time. It is shown that, when both R&D spillovers and investment costs are sufficiently low, firms may find difficult to maintain a stable R&D agreement due to the strong incentive to invest noncooperatively as leaders. In such a case, to be stable a R&D agreement requires that the joint investment occurs at the initial stage, avoiding any delay. When instead R&D spillover rates are sufficiently high, the cooperation in R&D constitutes a profitable option, although firms also possess the incentive to sequence their investment over time. Finally, when spillovers are asymmetric and the knowledge leaks mainly from the leader to the follower, to invest as follower becomes extremely profitable, making R&D alliances hard to sustain unless firms strategically delay their joint investment in R&D.R&D investment, Spillovers, Endogenous Timing.

MEAT-PACKER CONDUCT IN FED CATTLE PRICING: MULTIPLE-MARKET OLIGOPSONY POWER

The exercise of market power across multiple geographic fed cattle markets is measured with an econometric model which links behavior of the margin between boxed beef and regional fed cattle prices to an oligopsony model of multiple-market conduct. The game theoretic economic model suggests that for market power to be exercised in a single market a discontinuous pricing strategy must be followed. Total market power is enhance if meat-packers coordinate this pricing strategy across geographic markets. Tests reject independence of pricing conduct across geographic markets which suggests multiple-market power is present. The extent of the market power also is consistent with the economic model. More market power is exercised across regions with the same meat-packing firms. However, the magnitude of the market power is small and decreased between the early and late 1980s.Demand and Price Analysis,

Difference games and policy evaluation: A conceptual framework

Economics

Backwards-induction outcome in a quantum game

In economics duopoly is a market dominated by two firms large enough to influence the market price. Stackelberg presented a dynamic form of duopoly that is also called `leader-follower' model. We give a quantum perspective on Stackelberg duopoly that gives a backwards-induction outcome same as the Nash equilibrium in static form of duopoly also known as Cournot's duopoly. We find two qubit quantum pure states required for this purpose.Comment: Revised in the light of referee's comments. Latex, 16 pages, 2 figures, To appear in Phy. Rev.

The Strategic Timing of R&D Agreements

none3EMS Working PaperopenM. A. MARINI; M.L. PETIT; R. SESTINIMarini, Marco; M. L., Petit; R., Sestin

Empirical Analysis of Competitive Interaction in Food Product Categories

This paper provides an overview of recent research on estimating competitive interaction in food product categories. In particular, the focus of this review is on research using scanner data conducted at the disaggregate (e.g., store, chain or local market) level, including empirical studies of vertical (i.e., within-channel) conduct. Studies addressing the competitive interaction on price, as well as non-price variables (e.g., in-store display and feature advertising) are considered. The author first describes the methodologies available for measuring the competitive interaction between firms and then briefly summarizes recent empirical developments. Given the complexity of the interactions that take place in practice, it is argued that much of the richness of actual competitive behavior is lost in aggregate analysis. Competitive interaction is the result of a complex set of variables and influences-demand side factors, market and industry structure, firm "personality", and category characteristics all interact in a complex fashion to determine strategic behavior of retailers and manufacturers.competition, competitive strategy, channel behavior, Agribusiness, Demand and Price Analysis, Industrial Organization,