Social identity and implicit collusion in Cournot interactions

This research applies and extends the standard industrial organization models of repeated interaction between firms by incorporating group identity to evaluate the ability of group identity, thereby summarizing the theories of observed collusion. The model is used to outline circumstances under which collusion is easier to happen in a single market, and it will break down. A general overview of literature based on laboratory experiments is presented to study the effects of social identity and study oligopoly markets. We construct lab experiments to test the effects of a single factor on collusion, i.e. whether the two players share the same group identity. University students were enrolled as research subjects in the laboratory experiments to test the validity of behaviour predictions. All experiments serve to answers two questions: a) How far is the market outcome away from the Standard Nash equilibrium? b) How good is the Nash prediction? Study 1 investigates the effects of group identity on randomly rematches one-shot Cournot interactions. Study 2 describes the results of finitely repeated Cournot interactions that behaviour is more collusive when the players were from the same group than those from different groups or nogroup players. Study 3 concentrates on the indefinitely repeated interactions, finding that outgroup favouritism could be reflected in average quantity choices and collusion. Therefore, we determine that the effect of group identity on collusion is greater in repeated Cournot interactions than one-shot Cournot interactions, and that the repeated interaction devices enhance the difference between the players without group identity and players with primed group identity. The inspecting of individual behaviour indicated that the output adjustment is significantly correlated with the previous period’s two-sides profit changes comparisons. In the group matchings (ingroup matchings and outgroup matchings), group identity further strengthens the role of enhancement for collusion. Group identity can influence significantly the player’s quantity choices. In this study we reassess the representation of group identity by applying group contingent other-regarding preferences. First, the influence of group identity varies unsympathetically across different devices of repeated Cournot interactions, so it cannot be explained through a well-behaved preference function. Second, this study suggests that group identity plays a key role in the preference over strategies of norms. Simulation results generated from a norm model estimated at the subject level provided insight into the repeated interactions and the group identity that motivate the collusion

International Conference Management, Business and Economics

UBT Annual International Conference is the 9th international interdisciplinary peer reviewed conference which publishes works of the scientists as well as practitioners in the area where UBT is active in Education, Research and Development. The UBT aims to implement an integrated strategy to establish itself as an internationally competitive, research-intensive university, committed to the transfer of knowledge and the provision of a world-class education to the most talented students from all background. The main perspective of the conference is to connect the scientists and practitioners from different disciplines in the same place and make them be aware of the recent advancements in different research fields, and provide them with a unique forum to share their experiences. It is also the place to support the new academic staff for doing research and publish their work in international standard level. This conference consists of sub conferences in different fields like: Art and Digital Media Agriculture, Food Science and Technology Architecture and Spatial Planning Civil Engineering, Infrastructure and Environment Computer Science and Communication Engineering Dental Sciences Education and Development Energy Efficiency Engineering Integrated Design Information Systems and Security Journalism, Media and Communication Law Language and Culture Management, Business and Economics Modern Music, Digital Production and Management Medicine and Nursing Mechatronics, System Engineering and Robotics Pharmaceutical and Natural Sciences Political Science Psychology Sport, Health and Society Security Studies This conference is the major scientific event of the UBT. It is organizing annually and always in cooperation with the partner universities from the region and Europe. We have to thank all Authors, partners, sponsors and also the conference organizing team making this event a real international scientific event

\u3ci\u3eThe Conference Proceedings of the 1998 Air Transport Research Group (ATRG) of the WCTR Society, Volume 1 \u3c/i\u3e

UNOAI Report 98-6https://digitalcommons.unomaha.edu/facultybooks/1154/thumbnail.jp

Price-cost margins and market structure

In this thesis, the relationship between some aspects of industrial market structure and industry price-cost margins or profit-revenue ratios is investigated. This is done mainly by building mathematical models based upon the tenet of profit maximisation. Empirical tests of the hypotheses developed are carried out using regression analysis on recent UK data. After an introductory chapter, the arguments are developed by successively taking structural features into account. Thus initially, problems involved in relating the structure of established firms in an industry to price-cost margins are considered. Then the possibilities and problems of potential entry into an industry are opened up. After that, the power of buyers from and sellers to the industry are brought into partial account. Additional potentially relevant structural factors receive a more cursory treatment before the analysis passes to empirical testing. At every stage, the relevant established literature is reviewed. It is found theoretically that the price-cost margin may be related to two main aspects of market structure, the "Herfindahl" index and a bilateral power index developed here. However, the commonly included "entry barrier variables need not, under reasonable assumptions, be considered relevant. The empirical results lend support to the theoretical conclusions regarding the Herfindahl and bilateral power indices. The contribution to knowledge in the subject area achieved herein is (hopefully) mainly in the rigorous development and application of models which have, in general, previously been rather vaguely based upon commonsense extensions of the fundamentals of economic theory. In fact, the thesis consists to a large extent in the belief that industrial economic problems often considered as having theoretically indeterminate solutions may be profitably examined and "solved" rigorously, with the judicious use of restrictive assumptions

Supply chain management of differentiated agricultural products under imperfect information

Participants in a supply chain of agricultural value added products face two significant challenges. First, many of the costly distinctive traits being desired by consumers are difficult (if not impossible) to observe even after consumption. In order for markets for these classes of goods to develop, firms touting the quality of the product need to be trusted. Hence, maintaining an excellent reputation is essential for firms to keep their customers\u27 good will. Secondly, production is conducted in an environment of yield uncertainty, making it impossible for producers and processors to predict with certainty either the quantity or the quality of the input that will be available in any given season. In short, production, processing, and marketing of some value added products require tighter coordination mechanisms than those afforded by open market transactions.;Chapter 2 studies the merit and feasibility of co-existence of spot and contract markets for a value added product. Co-existence of contract and spot markets arise as an equilibrium for a wide range of distinct parameterizations of the model. The fundamental economic factors influencing the prevalence of each market are identified. In order to obtain co-existence, both yield uncertainty and a vigorous competition whenever a spot market arises are needed. Chapter 3 analyzes the optimal choice of a quality assurance system (QAS) a processing firm should require from its suppliers in the presence of imperfect information. We find that firms will require more stringent QAS when quality is easier to discover, and reputations are firm specific (as opposed to industry-wide). Also, monopolists will implement more stringent QAS than duopolists, indicating that market concentration is not necessarily welfare reducing in this environment. Policy implications are drawn. Chapter 4 proposes a flexible framework that can be used empirically by a group of producers to sort their product into quality classes based on the results of potentially imperfect tests. The models are designed to obtain thresholds for certification, and provide insights on why finding the optimal thresholds to certify tenderness has been so elusive. An illustration of how to put the framework to work is provided

Market heterogeneity and the relationship between competition and price dispersion : evidence from the U.S. airline market

Altres ajuts: Acord transformatiu CRUE-CSICPrevious studies agree that competition influences price dispersion, however there is disagreement on the direction of the effect. To explain this contradiction in findings we include a measure not typically considered in competitive analysis, the level of market heterogeneity. We find that the response of price dispersion to changes in competition is conditioned by differentiation. When products in a market are homogenous, increasing competition reduces price dispersion, while in a market with heterogeneous products, the same increase in competition increases price dispersion. We include an output attribute index as a control for market heterogeneity and test our method on 73,981 observations of airfare data from 2002 through 2016. The implication of our findings for policymakers is that the traditional measures of market concentration do not determine the level of competition alone. Decisions on allowing or disallowing mergers should consider market heterogeneity, not just concentration. The results of this work contribute toward extending knowledge on the effect of competition on price dispersion and introduce a method of measuring market differentiation

Modeling the Psychology of Consumer and Firm Behavior with Behavioral Economics

Marketing is an applied science that tries to explain and influence how firms and consumers actually behave in markets. Marketing models are usually applications of economic theories. These theories are general and produce precise predictions, but they rely on strong assumptions of rationality of consumers and firms. Theories based on rationality limits could prove similarly general and precise, while grounding theories in psychological plausibility and explaining facts which are puzzles for the standard approach. Behavioral economics explores the implications of limits of rationality. The goal is to make economic theories more plausible while maintaining formal power and accurate prediction of field data. This review focuses selectively on six types of models used in behavioral economics that can be applied to marketing. Three of the models generalize consumer preference to allow (1) sensitivity to reference points (and loss-aversion); (2) social preferences toward outcomes of others; and (3) preference for instant gratification (quasi-hyperbolic discounting). The three models are applied to industrial channel bargaining, salesforce compensation, and pricing of virtuous goods such as gym memberships. The other three models generalize the concept of gametheoretic equilibrium, allowing decision makers to make mistakes (quantal response equilibrium), encounter limits on the depth of strategic thinking (cognitive hierarchy), and equilibrate by learning from feedback (self-tuning EWA). These are applied to marketing strategy problems involving differentiated products, competitive entry into large and small markets, and low-price guarantees. The main goal of this selected review is to encourage marketing researchers of all kinds to apply these tools to marketing. Understanding the models and applying them is a technical challenge for marketing modelers, which also requires thoughtful input from psychologists studying details of consumer behavior. As a result, models like these could create a common language for modelers who prize formality and psychologists who prize realism

Strategies for sustainable socio-economic development and mechanisms their implementation in the global dimension

The authors of the book have come to the conclusion that it is necessary to effectively use modern approaches to developing and implementation strategies of sustainable socio-economic development in order to increase efficiency and competitiveness of economic entities. Basic research focuses on economic diagnostics of socio-economic potential and financial results of economic entities, transition period in the economy of individual countries and ensuring their competitiveness, assessment of educational processes and knowledge management. The research results have been implemented in the different models and strategies of supply and logistics management, development of non-profit organizations, competitiveness of tourism and transport, financing strategies for small and medium-sized enterprises, cross-border cooperation. The results of the study can be used in decision-making at the level the economic entities in different areas of activity and organizational-legal forms of ownership, ministries and departments that promote of development the economic entities on the basis of models and strategies for sustainable socio-economic development. The results can also be used by students and young scientists in modern concepts and mechanisms for management of sustainable socio-economic development of economic entities in the condition of global economic transformations and challenges