Industry Equilibrium with Open Source and Proprietary Firms

We present a model of industry equilibrium to study the coexistence of Open Source (OS) and Proprietary (P) firms. Two novel aspects of the model are: (1) participation in OS arises as the optimal decision of profit-maximizing firms, and (2) OS and P firms may (or may not) coexist in equilibrium. Firms decide their type and investment in R&D, and sell packages composed of a primary good (like software) and a complementary private good. The only difference between both kinds of firms is that OS share their technological advances on the primary good, while P keep their innovations private. The main contribution of the paper is to determine conditions under which OS and P coexist in equilibrium. Interestingly, this equilibrium is characterized by an asymmetric market structure, with a few large P firms and many small OS firms.Industry Equilibrium, Open Source, Innovation, Complementarity, Technology Sharing, Cooperation in R&D

Essays in industrial organization

In this thesis, I study two important issues in the field of industrial organization: competition between firms with different business models and its effects on market allocation, and the relation between innovative activity and employment at the firm level. The first chapter entitled "Employment and innovation: Firm level evidence from Argentina" is a joint work with David Giuliodori and Rodolfo Stucchi. This chapter provides evidence about the effect of innovation on employment in Argentina in the period 1998-2001. In particular, we quantify the effect of process and product innovations on employment growth and the skill composition. Our results show that: (i) Product innovations have a positive effect on employment growth biased toward skill labor; (ii) Process innovations do not affect employment growth or composition; (iii) There are no heterogeneous effects in technology intensity and size, (iv) Most of the contraction in employment in this period was explained by noninnovators. The second chapter entitled "Industry equilibrium with open-source and proprietary firms" is a joint work with Gast on Llanes. This chapter presents a model of industry equilibrium to study the coexistence of open-source and proprietary firms. Two novel aspects of the model are (i) participation in open source arises as the optimal decision of pro t-maximizing firms, and (ii) open-source and proprietary firms may (or may not) coexist in equilibrium. Firms decide their type and investment in R&D, and sell packages composed of a primary good and a complementary private good. Open-source firms share their technological advances on the primary good, whereas proprietary firms keep their innovations private. The main contribution of the chapter is to determine conditions under which open-source and proprietary firms coexist in equilibrium. Interestingly, this equilibrium is characterized by an asymmetric market structure, with few large proprietary firms and many small open-source firms. The third chapter entitled "Competition between single-market and multimarket banks: Evidence from the US Banking Industry" estimates comparative advantages and disadvantages between single-market and multimarket banks. In the banking industry, due to the relevance of the branch's location, the relevant market is a local market. Based on this fact, the chapter defines two types of competitors: banks with branches in only one local market called single-market banks, and banks with branches in multiple local markets called multimarket banks. The main results of the paper are: (i) incumbent single-market banks have a comparative advantage with multimarket banks in a sample of small urban and rural markets, and (ii) single-market banks face higher expansion costs into other local markets than mutlimarket banks. This chapter presents two main contributions. First, it contributes to the discussion about agency problems for hierarchical firms in markets with asymmetric information. Second, it suggests the possibility of unexpected consequences after a deregulation of the expansion restrictions that lesser the barrier to entry for multimarket banks.En esta tesis se estudian dos problemas relevantes en el campo de la organización industrial: competencia entre firmas con distintos modelos de negocios (firmas "open source" y propietarias en el capítulo 2, y firmas multimercado y unimercado en el capítulo 3) y sus efectos sobre el mercado como asignador de recursos, y la relación empírica entre actividad innovadora y empleo al nivel de firma. El primer capítulo llamado "Empleo e innovación: Evidencia al nivel de firma para Argentina" es un trabajo conjunto con David Giuliodori y Rodolfo Stucchi. Este capítulo muestra evidencia del efecto de la innovación en el empleo para Argentina en el período 1998-2000. En particular, se mide el efecto de innovación en proceso y producto en la tasa de crecimiento del empleo y la composición de la cualificación del empleo. Los resultados del capítulo muestran que: (i) Las innovaciones de producto tienen un efecto positivo en el crecimiento del empleo sesgado hacia el trabajo calificado; (ii) las innovaciones de proceso no afectan el crecimiento del empleo o las composición de la cualificación del empleo; (iii) no hay efectos heterogéneos en función del sector tecnológico al que pertenece la firma y el tamaño de la firma; (iv) La mayor parte de la contracción del empleo en el período se explica por la decisiones de contratación de la firmas no innovadoras. El segundo capítulo llamado "Equilibrio en la industria con firmas "open source" y propietarias" es un trabajo conjunto con Gastón Llanes. En este capítulo se presenta un modelo de equilibrio en una industria para estudiar la coexistencia entre firmas "open source" y propietarias. El modelo presenta dos aspectos novedosos (i) la participación en un proyecto open source surge endógenamente a partir de las decisiones óptimas de firmas maximizadoras de beneficios, y (ii) las firmas open source y propietarias pueden coexistir o no en equilibrio. Las firmas deciden su tipo y su inversión en I+D, y venden paquetes conformados por un bien primario y un bien complementario privado. Las firmas open source comparten sus avances tecnológicos en el bien primario mientras que las firmas propietarias mantienen sus innovaciones privadas. La principal contribución del capítulo es determinar las condiciones que permiten la coexistencia de ambas firmas en equilibrio. Un resultado importante es que el equilibrio se caracteriza por una estructura asimétrica de mercado con un número reducido de firmas propietarias de gran tamaño y numerosas firmas open source de menor tamaño. El tercer capítulo llamado "Competencia entre bancos unimercado y multimercado: Evidencia para la industria bancaria de EEUU" estima las ventajas y desventajas comparativas entre bancos unimercado y multimercado. El mercado relevante en la industria bancaria de EEUU, debido a la importancia de la distancia geográfica en la industria, es esencialmente local. El trabajo considera dos tipos de competidores en función a la localización de las sucursales bancarias: bancos con presencia en un solo mercado local llamados bancos unimercado, y bancos con presencia en más de un mercado local llamados bancos multimercado. Los resultados principales del trabajo son: (i) los bancos unimercado incumbentes tienen ventajas comparativas frente a los bancos multimercados en mercados urbanos de menor tamaño y en mercados rurales, y (ii) los bancos unimercados enfrentan mayores costos de expansión hacia otros mercados locales que los bancos multimercado. Este capítulo presenta dos contribuciones principales. Primero, contribuye a la discusión sobre los problemas de agencia de firmas más jerárquicas en mercados con problemas de información asimétrica. Segundo, sugiere la posibilidad de consecuencias no esperadas de una política de desregulación a la expansión de las sucursales bancarias que disminuye la barreras a la entrada de los bancos multimercado.Employment and innovation: firm level evidence from Argentina / Ramiro de Elejalde with David Giuliodori and Rodolfo Stucchi. -- Competition between single-market and multimarket banks: evidence from the U.S. Banking Industry. -- Industry equilibrium with open-source and propietary firms / Ramiro de Elejalde with Gastón LlanesPrograma Oficial de Posgrado en EconomíaPresidente: José Fariñas García; Secretario: Natalia Fabra Portela; Vocal: Pilar Beneito Lópe

evidence from Uruguayan firms

El artículo investiga la relación entre la intensidad competitiva en los mercados y su impacto en la innovación. Utilizando datos a nivel micro de Uruguay, nosotros encontramos un impacto negativo y significativo de la competencia en la inversión de recursos dedicados a actividades de innovación, pero evidencia de un efecto positivo y significativo de la competencia sobre la eficiencia del gasto en innovación. Además, encontramos que este efecto no es despreciable. Un incremento en una desviación estándar (sd) en competencia aumenta la eficiencia del gasto de innovación entre 1.0 sd y 2.5 sd dependiendo de la medida de eficiencia. Nuestro hallazgo tiene implicaciones importantes para la política de la competencia: a medida que aumenta la rivalidad competitiva, los recursos dedicados a actividades de innovación se vuelven más eficiente. [Resumen de autor

More Hospital Choices, More C-Sections: Evidence from Chile

In this paper, we study the effect on cesarean rates of a policy change in Chile that decreased the cost of delivery at private hospitals for women with public health insurance. Using a difference-in-differences (DID) approach based on the eligibility conditions for this benefit, we find that in the first three years after the policy took effect, deliveries in private hospitals increased by 8.7 percentage points, while the probability of a C-section being performed increased by 4.6 percentage points, with negative impacts on average newborn weight and size at birth. We show that the probability of an early term birth in hospitals participating in the program is an increasing function of expected hospital demand at the time of the full-term due date. This suggests that in the absence of price incentives, hospitals use C-sections to smooth out demand over time to optimize the use of their resources

On the Short-Term Impact of Pollution: The Effect of PM 2.5 on Emergency Room Visits

In this paper, we study the effect of fine particulate matter (PM 2.5) exposure on Emergency Room (ER) visits in Chile. Our identification strategy exploits daily PM 2.5 variation within a hospital-month-year combination. Unlike previous papers, our data allow us to study the impact of high levels of pollution while controlling for avoidance behavior. We find that a one standard deviation increase in PM 2.5 increases respiratory ER visits by 1.4 percent. This effect is positive for all age groups but is stronger for children (less than five years old) and the elderly (more than 65 years old). Moreover, we find that the effects are stronger in geographical areas in which the share of emissions from residential wood burning is more than 75 percent. Finally, our results are robust to instrumenting pollution using wind direction and speed and to controlling for other pollutants

On the short-term impact of pollution: The effect of PM 2.5 on emergency room visits

In this paper, we study the short-term effect of fine particulate matter (PM 2.5) exposure on respiratory Emergency Room (ER) visits in Chile, a middle-income country with high levels of air pollution. To instrument for PM 2.5 we use wind speed at different altitudes (pressure levels). Unlike previous papers, our data allow us to study the impact of increasing air pollution at high levels of pollution. We find that a 1 microgram per cubic meter (μg/m3 ) increase in PM 2.5 exposure for one day increases ER visits for respiratory illness by 0.36 percent. The effect is positive for all age groups, including the middle-age population, a novel finding in the literature

Frequent Monitoring in Repeated Games under Brownian Uncertainty

This paper studies frequent monitoring in a simple in…nitely repeated game with imperfect public information and discounting, where players observe the state of a continuous time Brownian process at moments in time of length. It shows that e ¢ cient strongly symmetric perfect public equilibrium payo¤s can be achieved with imperfect public monitoring when players monitor each other at the highest frequency, i.e.! 0. The approach proposed places distinct initial conditions on the process, which depend on the unknown action pro…le simultaneously and privately decided by the players at the beginning of each period of the game. The strong decreasing e¤ect on the expected immediate gains from deviation when the interval between actions shrinks, and the associated increase precision of the public signals, make the result possible in the limit. The existence of a positive monotonic relation between payo¤s and monitoring intensity is also found