A Simple Theory of Predation

We propose a simple theory of predatory pricing, based on scale economies and sequential buyers (or markets). The entrant (or prey) needs to reach a critical scale to be successful. The incumbent (or predator) is ready to make losses on earlier buyers so as to deprive the prey of the scale it needs, thus making monopoly profits on later buyers. Several extensions are considered, including markets where scale economies exist because of demand externalities or two-sided market effects, and where markets are characterised by common costs. Conditions under which predation may take place in actual cases are also discussed.Anticompetitive Behaviour, Exclusion, Below-Cost Pricing, Antitrust

Buyers’ miscoordination, entry, and downstream competition

This paper shows that buyers’ coordination failures might prevent entry in an industry with an incumbent firm and a more efficient potential entrant. If there was a single buyer, or if all buyers formed a central purchasing agency, coordination failures would be avoided and efficient entry would always occur. More generally, exclusion is the less likely the lower the number of buyers. For any given number of buyers, exclusion is the less likely the more fiercely buyers compete in the downstream market. First, intense competition may prevent miscoordination equilibria from arising; second, in cases where miscoordination equilibria still exist, it lowers the maximum price that the incumbent can sustain at such exclusionary equilibriaCountervailing Power; Exclusion; Buyers’ Fragmentation

A Simple Theory of Predation

We propose a simple theory of predatory pricing, based on incumbency advantages, scale economies and sequential buyers (or markets). The prey needs to reach a critical scale to be successful. The incumbent (or predator) has an initial advantage and is ready to make losses on earlier buyers so as to deprive the prey of the scale the latter needs, thus making monopoly profits on later buyers. Several extensions are considered, including cases where scale economies exist because of demand externalities or two-sided market effects, and where markets are characterized by common costs. Conditions under which predation may take place in actual cases are also discussed.

Exclusive dealing, entry, and mergers

This paper studies a model where exclusive dealing (ED) can both promote investment and foreclose a more efficient supplier. While investment promotion is usually regarded as a pro-competitive effect of ED, our paper shows that it may be the very reason why a contract that forecloses a more efficient supplier is signed. Absent the effect on investment, the contract would not be signed and foreclosure would not be a concern. For this reason, considering potential foreclosure and investment promotion in isolation and then summing them up may not be a suitable approach to assess the net effect of ED. The paper therefore invites a more cautious attitude towards accepting possible investment promotion arguments as a defence for ED.

On the Anticompetitive Effect of Exclusive Dealing when Entry by Merger is Possible

We extend the literature on exclusive dealing, which assumes that entry can occur only by installing new capacity, by allowing the incumbent and the potential entrant to merge. This uncovers new effects. First, exclusive deals can be used to improve the incumbent's bargaining position in the merger negotiation. Second, the incumbent finds it easier to elicit the buyer's acceptance. Third, exclusive dealing, despite allowing the more efficient technology to find its way into the industry, reduces welfare because (i) it may trigger entry through merger whereas independent entry would be socially optimal, (ii) it leads to a sub-optimal contractual price when the exclusive dealing include a price commitment, (iii) it may deter entry altogether.Technology Transfer; Inefficient Entry; Antitrust; Authority's Behavior

Exclusive Dealing: The Interaction between Foreclosure and Investment Promotion

This paper studies a model where exclusive dealing (ED) can both promote investment and foreclose a more efficient supplier. While investment promotion is usually regarded as a pro-competitive effect of ED, our paper shows that it may be the very reason why a contract that forecloses a more efficient supplier is signed. Absent the effect on investment, the contract would not be signed and foreclosure would not be a concern. For this reason, considering potential foreclosure and investment promotion in isolation and then summing them up may not be a suitable approach to assess the net effect of ED. The paper therefore invites a more cautious attitude towards accepting possible investment promotion arguments as a defence for ED.Monopolization Practices, Vertical Agreements

Exploring manual asymmetries during grasping: a dynamic causal modeling approach

Recording of neural activity during grasping actions in macaques showed that grasp-related sensorimotor transformations are accomplished in a circuit constituted by the anterior part of the intraparietal sulcus (AIP), the ventral (F5) and the dorsal (F2) region of the premotor area. In humans, neuroimaging studies have revealed the existence of a similar circuit, involving the putative homolog of macaque areas AIP, F5 and F2. These studies have mainly considered grasping movements performed with the right dominant hand and only a few studies have measured brain activity associated with a movement performed with the left non-dominant hand. As a consequence of this gap, how the brain controls for grasping movement performed with the dominant and the non-dominant hand still represents an open question. A functional resonance imaging experiment (fMRI) has been conducted, and effective connectivity (Dynamic Causal Modelling, DCM) was used to assess how connectivity among grasping-related areas is modulated by hand (i.e., left and right) during the execution of grasping movements towards a small object requiring precision grasping. Results underlined boosted inter-hemispheric couplings between dorsal premotor cortices during the execution of movements performed with the left rather than the right dominant hand. More specifically, they suggest that the dorsal premotor cortices may play a fundamental role in monitoring the configuration of fingers when grasping movements are performed by either the right and the left hand. This role becomes particularly evident when the hand less-skilled (i.e., the left hand) to perform such action is utilized. The results are discussed in light of recent theories put forward to explain how parieto-frontal connectivity is modulated by the execution of prehensile movements

Stabilizability in optimal control

We extend the well known concepts of sampling and Euler solutions for control systems associated to discontinuous feedbacks by considering also associated costs; in particular, we introduce the notions of Sample and Euler stabilizability to a closed target set C with W-regulated cost, which roughly means that we require the existence of a stabilizing feedback such that all the corresponding sampling and Euler solutions have finite costs, bounded above by a continuous, state-dependent function W, divided by some positive constant c. We prove that the existence of a special Control Lyapunov Function W, called c-Minimum Restraint function, c-MRF, implies Sample and Euler stabilizability to C with W-regulated cost, so extending [Motta, Rampazzo 2013], [Lai, Motta, Rampazzo, 2016], where the existence of a c-MRF was only shown to yield global asymptotic controllability to C with W-regulated cost

Decoding social intentions in human prehensile actions: Insights from a combined kinematics-fMRI study

Consistent evidence suggests that the way we reach and grasp an object is modulated not only by object properties (e.g., size, shape, texture, fragility and weight), but also by the types of intention driving the action, among which the intention to interact with another agent (i.e., social intention). Action observation studies ascribe the neural substrate of this `intentional' component to the putative mirror neuron (pMNS) and the mentalizing (MS) systems. How social intentions are translated into executed actions, however, has yet to be addressed. We conducted a kinematic and a functional Magnetic Resonance Imaging (fMRI) study considering a reach-to-grasp movement performed towards the same object positioned at the same location but with different intentions: passing it to another person (social condition) or putting it on a concave base (individual condition). Kinematics showed that individual and social intentions are characterized by different profiles, with a slower movement at the level of both the reaching (i.e., arm movement) and the grasping (i.e., hand aperture) components. fMRI results showed that: (i) distinct voxel pattern activity for the social and the individual condition are present within the pMNS and the MS during action execution; (ii) decoding accuracies of regions belonging to the pMNS and the MS are correlated, suggesting that these two systems could interact for the generation of appropriate motor commands. Results are discussed in terms of motor simulation and inferential processes as part of a hierarchical generative model for action intention understanding and generation of appropriate motor commands

Combined optical water quality monitoring and sanitization system

The paper presents the realization of a prototype of a compact, cost-effective, and real-time photonic system for the early detection of quality variations in flowing water and for its sanitization. The detection is based on a multi-functional fiber Surface Plasmon Resonance (SPR) sensor, while the disinfection is obtained with a combination of short-wavelength light in the UV-blue region