Vertical Integration in the Presence of Upstream Competition

We analyze vertical integration in the case of upstream competition and compare outcomes to the case where upstream assets are owned by a single agent (i.e., upstream monopoly). In so doing, we make two contributions to the modelling of strategic vertical integration. First, we base industry structure – namely, the ownership of assets – firmly within the property rights approach to firm boundaries. Second, we model the potential multilateral negotiations using a fully specified, non-cooperative bargaining model designed to easily compare outcomes achieved under upstream competition and monopoly. Given this, we demonstrate that vertical integration can alter the joint payoff of integrating parties in ex post bargaining; however, this bargaining effect is stronger for firms integrating under upstream competition than upstream monopoly. We also consider the potential for integration to internalize competitive externalities in a manner that cannot be achieved under non-integration; i.e., by favouring internal over external supply. We demonstrate that ex post monopolization is more likely to occur when there is an upstream monopoly than when there is upstream competition. Our general conclusion is that the simple intuition that the presence of upstream competition can mitigate and reduce the incentives for socially undesirable vertical integration is misplaced and, depending upon the strength of downstream competition (i.e., product differentiation), the opposite could easily be the case. Journal of Economic Literature Classification Number: L42vertical integration, foreclosure, monopolization, bargaining,competition.

Implications of TP53 allelic state for genome stability, clinical presentation and outcomes in myelodysplastic syndromes

Tumor protein p53 (TP53) is the most frequently mutated gene in cancer1,2. In patients with myelodysplastic syndromes (MDS), TP53 mutations are associated with high-risk disease3,4, rapid transformation to acute myeloid leukemia (AML)5, resistance to conventional therapies6–8 and dismal outcomes9. Consistent with the tumor-suppressive role of TP53, patients harbor both mono- and biallelic mutations10. However, the biological and clinical implications of TP53 allelic state have not been fully investigated in MDS or any other cancer type. We analyzed 3,324 patients with MDS for TP53 mutations and allelic imbalances and delineated two subsets of patients with distinct phenotypes and outcomes. One-third of TP53-mutated patients had monoallelic mutations whereas two-thirds had multiple hits (multi-hit) consistent with biallelic targeting. Established associations with complex karyotype, few co-occurring mutations, high-risk presentation and poor outcomes were specific to multi-hit patients only. TP53 multi-hit state predicted risk of death and leukemic transformation independently of the Revised International Prognostic Scoring System (IPSS-R)11. Surprisingly, monoallelic patients did not differ from TP53 wild-type patients in outcomes and response to therapy. This study shows that consideration of TP53 allelic state is critical for diagnostic and prognostic precision in MDS as well as in future correlative studies of treatment response

Crime versus Globalization

This paper tries to think about the interaction between crime rates and the forces of globalisation, to explain some of the variation in crime rates across developing countries. Economically-motivated crime imposes extremely high costs in certain countries, such as PNG, and deters significant amounts of investment and growth. At the same time, poor returns to labour can push agents into criminal activity. Trade flows have a strong effect on the returns to capital and labour, for instance the returns to copper in PNG; thus it’s important to think about these forces together

The Relocation of Crime

We add a new sector called Crime to a traditional two-sector two-input Heckscher-Ohlin model of trade between countries. Trade is found to increase crime in the resource-rich country and to reduce crime in the resource-poor country by an equal amount. The negative externality from increased crime can be strong enough to cancel out the gains from trade for the resource-rich country. The paper also explores the impact of aid, capital flows, and migration on crime rates, and how crime shapes the degree of specialization in each economy

The Shrinking of Middle Management

We analyze a model in which (1) managers require experience in order to be productive; (2) providing managers with experience is costly and non-contractible. We demonstrate that if there is an increase in the mobility of managers, there may be a free-riding problem, in that each firm has too little incentive to give managers experience. Surprisingly, welfare may be higher in the state of the world with more mobility. We explore individual managers’ incentives to invest in generalizing their skills to improve their mobility