The successful strategy for mutual cooperation in the experimental multi-game contact

Playing multiple games simultaneously is popular, but we hardly know how people act in this situation to reach mutual cooperation in the long run. To answer the question, we conduct a series of experiments on multi-game contact. The results indicate that the number of information sets in the stage game and the payoff structure are important. We find that for making mutual cooperation subjects employ two types of TFT strategies, which simplify the complicated contact. In these strategies, they avoid separating behavior such as cooparating in one game but deviating in the other. This makes it easy for the opponents to understand thier cooperative intention

Risk absorption in Japanese subcontracting : a microeconometirc study on the automobile industry

Prevalence of subcontracting in Japan has traditionally been ascribed to risk shifting behavior of manufacturers. But, Asanuma's field research has elicited the following. First, in transactions with those suppliers with which it maintains longstanding relations, each typical manufacturer absorbs risks to a nonnegligible degree. Second, the degree tends to be higher (1) the larger the share occupied by the manufacturer in the total sales of the supplier; and (2) the more rudimentary the category of the item transacted viewed from evolutionary paths of suppliers. We adapt the principal-agent model derived by Kawasaki and McMillan based on a fundamental result acquired by Holmstrom and Milgrom on linearity of the optimal conpensation scheme, construct a set of data on individual suppliers to each of four major automobile manufacturers, and quantitatively verify the above propositions

Procurement System and Competitive Advantage

We examine which type of assembler－American-type or Japanese-type－will occupy a dominant position in a duopoly competition. An American-type assembler such as GM produces the parts internally, while a Japanese-type such as Toyota purchases them from its affiliated (keiretsu) supplier. This subject is also related to an institutional choice of boundaries of the firm, which affects firms’ competitiveness. In an affiliated procurement system, it is usual for a parent firm to support its affiliated supplier in various ways prior to purchasing the parts. The support can work as a commitment device that enables the parent firm to purchase the parts at a low price. Subsequently, the low price of the intermediate good gives the parent firm a competitive advantage in the final product market