Network Investment and Competition with Access-to-Bypass

This paper examines firms' incentive to make irreversible investments under an open access policy with stochastically growing demand. Using a simple model, we derive an access-to-bypass equilibrium. Analysis of the equilibrium confirms that the introduction of competition in network industries makes a firm's incentive to make investments greater than those of a monopolist. We then show that a change in access charges induces a trade-off in social welfare. That is, a decrease in the access charge expands a social benefit flow in the access duopoly, and deters not only the introduction of a new network facility, but also a positive network externality generated by the construction of an additional bypass network. The feasibility of the socially optimal investment timing is then discussedOpen access policy, Investment, Real options, Network facility, Access charge

Gradual Network Expansion and Universal Service Obligations

Universal service obligations are usually not competitively neutral as they modify the wayfirms compete in the market. In this paper, we consider a continuum of local markets in a dynamic setting with a stochastically growing demand. The incumbent must serve all markets (ubiquity) possibly at a uniform price and an entrant decides on its market coverage before firms compete in prices. Connecting a market involves a sunk cost. We show that the imposition of a uniform price constraint modifies the timing of entry: for low connection cost markets, entry occurs earlier while for high connection cost markets, entry occurs later.

Delegating Infrastructure Projects with Open Access

This paper provides a simple model that examines a firmfs incentive to invest in a network infrastructure through coalition formation in an open access environment with a deregulated retail market. A regulator faces a dilemma between inducing an incentive for efficient investment and reducing the distortion generated by imperfect competition. We show that, in such a case, the degree of cost-reducing effect of the investment is crucial from a welfare point of view. In particular, when network investment through coalition formation creates a large (small) cost-reducing effect, the regulator can (should not) delegate an investment decision to firms with an appropriate level of access charge.Network infrastructure, Coalition, Access Charge, Delegation

Industrial Diversity and Metropolitan Unemployment Rate

Although it has for years had a lower unemployment rate than other industrialized countries, Japan has begun to see an increase in unemployment since its economy was hit by the recession of the late 90?s. The level of a nation?s unemployment is commonly seen as a barometer of its economy?s health, so that Japan?s increased unemployment has worried the government and prompted it to consider several policy options. Unemployment rate in Japan varies by region. In general, while large metropolitan areas such as Tokyo have lower unemployment rates, smaller metropolitan areas have higher unemployment. Strangely, however, Osaka, the second largest metropolitan area after Tokyo, is suffering from a high unemployment rate. In October of 2002, the Kansai region including the Osaka metropolitan area recorded an unemployment rate of 7.2%, much higher than the average rate (5.5%). Theoretically, regional differentials of the unemployment rate are attributed to the friction resulting from adjusting for the mismatch between demand and supply of labor markets among regions. These frictional factors consist of the costs of information, moving, transactions related to housing, and psychological costs. Frictional components are important factors but are not all. Industrial structure differences also affect regional differentials of the unemployment rate. This paper investigated the relationship between unemployment rate and industrial structure in metropolitan areas, with the aim of testing the hypothesis that more industrially diversified metropolitan areas have lower unemployment rates. Previous studies have been done on the relationship between industrial diversity and unemployment rate but these do not provide concrete agreement because of the failure to control other factors affecting unemployment rate. This paper follows the theoretical justification of Simon (1988), who argues that industrial diversity attains a lower unemployment rate by assuming that the frictional component of employment fluctuations is a random variable and independent across industries. Because fluctuations are uncorrelated across industries, frictional hiring in some industries may coincide with frictional layoffs at others. Unemployed individuals can fill concurrently occurring vacancies. Therefore, the unemployment rate will be lower in the more industrially diverse metropolis. Simon?s empirical analysis of 91 large U.S. SMSAs strongly supports the hypothesis. In this study, we analyze 117 metropolitan areas in Japan for the year 1995. Because there is no authoritative definition of a metropolitan area in Japan, we began by defining metropolitan areas and collected data for each. As for a variable expressing industrial diversity, the Herfindahl index is used, which is made of both numbers of employments and numbers of firms for ten industrial classifications. Other factors used in this analysis are size of metropolitan areas, transportation conditions, unemployment insurance, average schooling length, and so on. The basic equation for the empirical analysis of the relationship between industrial diversity and metropolitan unemployment rate is as follows: Metropolitan unemployment rate = f (Herfindahl index (industrial diversity), metropolitan size, transportation conditions, unemployment insurance, average schooling length in metropolis) In addition to this analysis, we also analyze whether or not a higher location quotient shows a lower unemployment rate. In the preliminary analysis, we found there are negative relationships in almost all industries.

Gradual Network Expansion and Universal Service Obligations

Universal service obligations are usually not competitively neutral as they modify the way firms compete in the market. In this paper, we consider a continuum of local markets in a dynamic setting with a stochastically growing demand. The incumbent must serve all markets (ubiquity) possibly at a uniform price and an entrant decides on its market coverage before firms compete in prices. Connecting a market involves a sunk cost. We show that the imposition of a uniform price constraint modifies the timing of entry: for low connection cost markets, entry occurs earlier while for high connection cost markets, entry occurs later

Competition schemes and investment in network infrastructure under uncertainty

Abstract This paper compares two specific types of competition schemes (i.e., service-based competition and facility-based competition) by focusing on a firm's incentive to invest in network infrastructure. We show that when monopoly rent is large, facility-based competition makes the initial introduction of infrastructure earlier than service-based competition. However, when not only monopoly rent but the degree of uncertainty are small, service-based competition makes the initial introduction of infrastructure earlier than facility-based competition. The result indicates the relationship between the timing of infrastructure builiding and the degree of competitiveness in a product market. Other policy implications are also discussed

Model-Informed Vancomycin Dosing Optimization to Address Delayed Renal Maturation in Infants and Young Children with Critical Congenital Heart Disease

This is the peer reviewed version of the following article, Shimamoto Y., Fukushima K., Mizuno T., et al. Model-Informed Vancomycin Dosing Optimization to Address Delayed Renal Maturation in Infants and Young Children with Critical Congenital Heart Disease. Clinical Pharmacology and Therapeutics 115, 239 (2024), which has been published in final form at https://doi.org/10.1002/cpt.3095. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.Ensuring safe and effective drug therapy in infants and young children often requires accounting for growth and organ development; however, data on organ function maturation are scarce for special populations, such as infants with congenital diseases. Children with critical congenital heart disease (CCHD) often require multiple staged surgeries depending on their age and disease severity. Vancomycin (VCM) is used to treat postoperative infections; however, the standard pediatric dose (60–80 mg/kg/day) frequently results in overexposure in children with CCHD. In this study, we characterized the maturation of VCM clearance in pediatric patients with CCHD and determined the appropriate dosing regimen using population pharmacokinetic (PK) modeling and simulations. We analyzed 1,254 VCM serum concentrations from 152 postoperative patients (3 days–13 years old) for population PK analysis. The PK model was developed using a two-compartment model with allometrically scaled body weight, estimated glomerular filtration rate (eGFR), and postmenstrual age as covariates. The observed clearance in patients aged ≤ 1 year and 1–2 years was 33% and 40% lower compared with that of non-CCHD patients, respectively, indicating delayed renal maturation in patients with CCHD. Simulation analyses suggested VCM doses of 25 mg/kg/day (age ≤ 3 months, eGFR 40 mL/min/1.73 m2) and 35 mg/kg/day (3 months < age ≤ 3 years, eGFR 60 mL/min/1.73 m2). In conclusion, this study revealed delayed renal maturation in children with CCHD, could be due to cyanosis and low cardiac output. Model-informed simulations identified the lower VCM doses for children with CCHD compared with standard pediatric guidelines