An Elasticity Measure Of Welfare Loss In Symmetric Oligopoly

We derive a measure of welfare loss as a proportion of the value of sales under quantity-setting symmetric oligopoly in terms of the equilibrium industry price elasticity of demand, the number of firms in the industry and a conjectural variation term in the context of the standard linear model. This generalises the monopoly measure in James and McHardy (1997)

Airport Deregulation and Airline Competition

Liberalisation has affected all parts of the air travel industry, with airports as well as airlines increasingly run on commercial lines. This paper models interactions between airports and airlines to show that, for example, the potential benefits to passengers of increased competition between airlines may be (more than) absorbed by the unregulated airports through which they travel, and that effecting airport competition in one country may lead to the majority of the gains going abroad. The policy conclusion is that the (de)regulation of airlines and associated services should be fully co-ordinated and internationally coherent. Keywords: Airports, airlines, competition, deregulation

Measuring the Balance of Intra-Regional Trade

We introduce an original method of measuring the extent of the overall balance of migration among countries within a region which allows comparisons of the balance over time as well as between regions and various possible sub-regions

Airport Deregulation and Airline Competition

Liberalisation has affected all parts of the air travel industry, with airports as well as airlines increasingly run on commercial lines. This paper models interactions between airports and airlines to show that, for example, the potential benefits to passengers of increased competition between airlines may be (more than) absorbed by the unregulated airports through which they travel, and that effecting airport competition in one country may lead to the majority of the gains going abroad. The policy conclusion is that the (de)regulation of airlines and associated services should be fully co-ordinated and internationally coherent. Keywords: Airports, airlines, competition, deregulation

Secrecy versus patents: process innovations and the role of uncertainty

Whilst firms often prefer secrecy to patents and process innovations particu- larly lend themselves to secrecy, we establish a rationale for process innovators who patent. Using a simple two-period model, we show that under myopic op- timisation, the incentive to patent rather than pursue secrecy increases as the probability that the rival firm attaches to it being low-cost falls and as the pro- portion of the cost reduction due to the innovation, secured by the rival firm in the period after the patent has expired, falls. However, the gain to the innovating firm from patenting rather than secrecy strictly increases if the cost reduction due to the innovation is sufficiently small that the high-cost firm could profitably bluff that it is low-cost. Finally, allowing the low-cost firm the option of using an output signal in such cases, may make the patent strategy more or less attractive relative to the case of myopic optimisation

On the problem of network monopoly

We introduce a new regulatory concept: the independent profit-maximising agent, as a model for regulating a network monopoly. The agent sets prices on cross-network goods taking either a complete, or arbitrarily small, share of the associated profit. We examine welfare and profits with and without each agent type under both network monopoly and network duopoly. We show that splitting up the network monopoly (creating network duopoly) may be inferior for both firm(s) and society compared with a network monopoly "regulated" by an agent and that society always prefers any of the four agent regimes over network monopoly and network duopoly

Inter-regional Migration: The UK experience

This paper looks at the scenario of intra-UK migration amongst its four regions. The level of intra-UK migration is significant and is increasing over time. Using several measures of the balance in migration we observe that, broadly speaking, the balance is improving. We also examine the impact of changes in the regional per capita GDPs and unemployment levels on regional migration using panel analysis. Several authors find these to be significant factors in international migration. However, it seems that neither regional per capita GDP nor the unemployment level has a significant effect on regional migration in the UK (although the regression coefficients have the correct signs). In the case of regional migration in the UK, it is other characteristics of the source and destination regions which appear to matter most

Network Regulation Using an Agent

This paper introduces a new regulatory concept: the independent profit-maximising regulatory agent, as a possible model for regulating network industries where complex demand interdependencies, in particular demand complementarities, make traditional methods of regulation difficult. We derive a simple theoretical network model with differentiated demands and explore alternative competitive and regulatory strategies. We show that the employment of an independent profit-maximising agent may offer a partial solution to the problem of network regulation, yielding outcomes which involve all parties pursuing their own interests yet are relatively desirable to both firms and society

Firm corruption in the presence of an auditor

This paper develops a framework to explore firm corruption taking account of interaction with an auditor. The basic idea is that an auditor can provide auditing and other (consultancy) services. The extent of the other services depends on firm profitability. Hence auditor profitability can increase with firm corruption that may provide an incentive to collude in corrupt practices. This basic idea is developed using a game theoretic framework. It is shown that a multiplicity of equilibria exist from stable corruption, through auditor controlled corruption, via multiple equilibria to honesty on behalf of both actors. Following the development of the model various policy options are highlighted that show the difficulty of completely removing corrupt practices

On the Economics of Integrated Ticketing

In this paper we explore alternative pricing and regulatory strategies within a simple transport network with Cournot duopoly and differentiated demands. We show that whilst firms always prefer to offer integrated ticketing, a social planner will not. With integrated ticketing, the firms always prefer complete collusion but there is not a uniform ranking of some of the less collusive regimes. Society generally prefers the less collusive regimes to complete collusion but prefers some collusion to independent pricing