Domestic Competition and Foreign Direct Investment in Unionized Oligopoly

It is often argued, though mostly informally, that outward foreign direct investment (FDI) is a synonym for the export of employment and thus detrimental to the home economy. To see whether and under what conditions this intuition indeed holds true, we construct a model of unionized duopoly and examine welfare implications of outward FDI by paying special attention to the role of domestic competition. We find that the welfare effect of FDI is largely non-monotonic, and there are indeed such things as gexcessive FDI.h We also show that, when FDI reduces welfare, this negative effect arises more at the expense of consumers rather than the unions: in fact, quite contrary to the popular belief, FDI may actually benefit the unions because it serves to soften price competition between them. The paper points out that welfare effects of outward FDI hinges crucially on the nature of domestic competition, and policymakers must carefully take this aspect into consideration.

FDI may help rival firms

This paper presents a two-country model of duopolistic market with vertical relations which leads to a paradoxical result: when upstream firms possess sufficient bargaining power, cost-reducing FDI may actually enhance the rival firm's profit.Cournot competition

Outward Foreign Direct Investment in Unionized Oligopoly: Welfare and Policy Implications

It is often argued, though mostly informally, that outward foreign direct investment (FDI) is a synonym for the export of employment and thus detrimental to the home economy. To see whether and under what conditions this intuition indeed holds true, we construct a model of unionized duopoly and examine welfare implications of outward FDI on the home country. It is found that the welfare effect of FDI is mostly non-monotonic: an asymmetric pattern of FDI, where only one firm undertakes FDI in the duopolistic case, is socially desirable for a wide range of parameter values in the presence of strong unions. This amounts to a critical policy implication that there are indeed such things as gexcessive FDIh and any form of government intervention to encourage outward FDI can be beneficial only up to some point. We also show that, when FDI reduces welfare, this negative effect arises more at the expense of consumers rather than the unions: in fact, quite contrary to the popular belief, FDI may actually benefit the unions because it serves to soften price competition between them. The paper points out that welfare effects of outward FDI hinges crucially on the nature of domestic competition, and policymakers must carefully take this aspect into consideration.R&D investment, vertical relation, transport cost, welfare, wage bargaining

Market Competition, R&D and Firm Profits in Asymmetric Oligopoly

We investigate a Cournot model with strategic R&D investments wherein efficient low-cost firms compete against less efficient high-cost firms. We find that an increase in the number of high-cost firms can stimulate R&D by the low-cost firms, while it always reduces R&D by the high-cost firms. More importantly, this force can be strong enough to compensate for the loss that arises from more intense market competition: the low-cost firms' profits may indeed increase with the number of high-cost firms. An implication of this result is far-reaching, as it gives low-cost firms an incentive to help, rather than harm, high-cost competitors. We relate this implication to a practice known as open knowledge disclosure, especially Ford's strategy of disclosing its know-how publicly and extensively at the beginning of the 20th century.

When Market Competition Benefits Firms

A conventional wisdom in economics posits that more intense market competition, measured in almost any way, reduces firm profit. In this paper, we challenge this conventional wisdom in a simple Cournot model with strategic R&D investments wherein an efficient firm (dominant firm) competes against less efficient firms (fringe firms). We find that an increase in the number of fringe firms can stimulate R&D by the dominant firm, while it always reduces R&D by each of the fringe firms. More importantly, this force can be strong enough to compensate for the loss that arises from more intense market competition: the dominant firm's profit may indeed increase with the number of fringe firms, quite contrary to the conventional wisdom. An implication of this result is far-reaching, as it gives dominant firms to help, rather than harm, fringe competitors. We relate this implication to a practice know as open knowledge disclosure, especially Ford's strategy of disclosing its know-how publicly and extensively at the beginning of the 20th century.competition, oligopoly, R&D, heterogeneity, entry

A new dynamics of electroweak symmetry breaking with classically scale invariance

We propose a new dynamics of the electroweak symmetry breaking in a classically scale invariant version of the standard model. The scale invariance is broken by the condensations of additional fermions under a strong coupling dynamics. The electroweak symmetry breaking is triggered by negative mass squared of the elementary Higgs doublet, which is dynamically generated through the bosonic seesaw mechanism. We introduce a real pseudo-scalar singlet field interacting with additional fermions and Higgs doublet in order to avoid massless Nambu-Goldstone bosons from the chiral symmetry breaking in a strong coupling sector. We investigate the mass spectra and decay rates of these pseudo-Nambu-Goldstone bosons, and show they can decay fast enough without cosmological problems. We further evaluate the energy dependences of the couplings between elementary fields perturbatively, and find that our model is the first one which realizes the flatland scenario with the dimensional transmutation by the strong coupling dynamics. Similarly to the conventional flatland model with Coleman-Weinberg mechanism, the electroweak vacuum in our model is meta-stable.Comment: 10 pages, 1 figur

Ion Optics of Sector-Type Magnetic Focusing Fields

The convergence of the ion beam in the sector-type magnetic focusing field of the mass spectrometer is treated geometrically. The real thickness of the ion beam was considered, and the ratio of the radius of deflection to the beam thickness is included as a common parameter in the expression for the final image width. The treatment is composed of three parts : the first order approximation, the second order approximation and the complete convergence. In conclusion, a new type of optical system consisting of a dual arrangement of circular magnetic fields, is proposed and given the name “Collimatron” optical system