Partial collusion with asymmetric cross-price effects

Asymmetries in cross-price elasticities have been demonstrated by several empirical studies. In this paper we study from a theoretical stance how introducing asymmetry in the substitution effects influences the sustainability of collusion. We characterize the equilibrium of a linear Cournot duopoly with substitute goods, and consider substitution effects which are asymmetric in magnitude. Within this framework, we study partial collusion using Friedman (1971) solution concept. Our main result shows that the interval of quantities supporting collusion in the asymmetric setting is always smaller than the interval in the symmetric benchmark. Thus, the asymmetry in the substitution effects makes collusion more difficult to sustain. This implies that previous Antitrust decisions could be reversed by considering the role of this kind of asymmetry.

Know Thyself: Self Awareness and Utility Misprediction in Discounting Models of Intertemporal Choice

This review critically discusses the theoretical models of discounting through a selection of papers. It will focus on the comparison between the two major models, namely discounted utility and hyperbolic discounting. This paper differs from previous surveys in the attention given to the interpretation of models and suggestions for future research. First, it stresses how the economics literature is biased itself, since it considers only present-biased preferences on the basis of not well grounded evidence, while also future-biased preferences are worthwhile of attention to address relevant issues, like compulsive behaviors and work-life unbalance. Second, it makes qualifications on the meaning of self-awareness, distinguishing between cognitive boundaries and beliefs. Third, it suggests future direction of research to address this issue, fundamental for a sound policy analysis, by showing how the two main welfare criteria used in the literature to evaluate welfare of inconsistent individuals (long-run utility and Pareto criterion) have relevant shortcomings. Finally, it proposes a new perspective on misprediction of utility based on time perceptionfuture - biased preferences; intertemporal choice; partial naivete; self - control; sophistication; time inconsistency

Thinness and Obesity: A Model of Food Consumption, Health Concerns, and Social Pressure

The increasing concern of the policy maker about eating behavior has focused on thespread of obesity and on the evidence of a consistent number of individuals dietingdespite being underweight. As the latter behavior is often attributed to the socialpressure to be thin, some governments have already taken actions to ban ultra-thinideals and testimonials. Assuming that people are heterogeneous in their healthyweights, but are exposed to the same ideal body weight, this paper proposes atheoretical framework to assess whether increasing the ideal body weight is sociallydesirable, both from a welfare and from a health point of view. If being overweightis the average condition and the ideal body weight is thin, increasing the ideal bodyweight may increase welfare by reducing social pressure. By contrast, health is onaverage reduced, since people depart even further from their healthy weight. Giventhat in the US and in Europe people are on average overweight, we conclude thatthese policies, even when are welfare improving, may foster the obesity epidemic.Body Weight, Diet, Obesity, Social Pressure, Underweight.

Is conformism desirable? Network effects, location choice, and social welfare in a duopoly

In this paper we study a duopoly where the network e¤ect is nonmonotone and the network can be overloaded. The firms choose prices and locations endogenously, and the agent's utility is influenced by the number of people patronizing the same firm she does. We determine the market equilibrium, and we study how the network effect influences social welfare. We compare this setting with the standard horizontal differentiation model with no network effects to understand whether and how conformism is socially desirable. The results show that whether network effects are desirable depends on how people are conformist, and whether overloading is feasible. If overloading is not possible (in either of the firm's network), and the total consumers' mass is sufficiently high, a network effect which is slightly concave increases social welfare. By contrast, if overloading is feasible, and the total consumers' mass is sufficiently small, social welfare is increased if the network effect is more concave than in the previous case

Is conformism desirable? Network effects, location choice, and social welfare in a duopoly

In this paper we study a duopoly where the network e¤ect is nonmonotone and the network can be overloaded. The firms choose prices and locations endogenously, and the agent's utility is influenced by the number of people patronizing the same firm she does. We determine the market equilibrium, and we study how the network effect influences social welfare. We compare this setting with the standard horizontal differentiation model with no network effects to understand whether and how conformism is socially desirable. The results show that whether network effects are desirable depends on how people are conformist, and whether overloading is feasible. If overloading is not possible (in either of the firm's network), and the total consumers' mass is sufficiently high, a network effect which is slightly concave increases social welfare. By contrast, if overloading is feasible, and the total consumers' mass is sufficiently small, social welfare is increased if the network effect is more concave than in the previous case.

Partial collusion with asymmetric cross-price effects

Asymmetries in cross-price elasticities have been demonstrated by several empirical studies. In this paper we study from a theoretical stance how introducing asymmetry in the substitution effects influences the sustainability of collusion. We characterize the equilibrium of a linear Cournot duopoly with substitute goods, and consider substitution effects which are asymmetric in magnitude. Within this framework, we study partial collusion using Friedman (1971) solution concept. Our main result shows that the interval of quantities supporting collusion in the asymmetric setting is always smaller than the interval in the symmetric benchmark. Thus, the asymmetry in the substitution effects makes collusion more difficult to sustain. This implies that previous Antitrust decisions could be reversed by considering the role of this kind of asymmetry

Spatial competition and social welfare in the presence of non-monotonic network effects

We study a spatial duopoly and extend the literature by giving joint consideration to non-monotonic network effects and endogenous firm location decisions. We show that the presence of network effects (capturing, for example, in-store rather than online sales) improves welfare whenever the total market size is not too large. This effect is lost if network effects are specified in a monotonic fashion, in which case isolating consumers from one another always reduces welfare. We also provide a new rationale for a duopoly to be welfare-preferred to monopoly: in large markets, splitting demand between two firms can reduce utility losses due to crowding.Publisher PD

The Abruzzo-Apulian (Central and Southeastern Italy) fossil fauna, new challenges for paleontologists and paleobiogeographers

The Abruzzo-Apulian Platform was an endemic Neogene paleobioprovince. Its relics can be found at the south-east of the Italian Peninsula. Geological and paleontological traces of this past land crop out both in the central Apennines, Maiella (Scontrone fossiliferous site), as well as in the Gargano Promontory. The Scontrone paleofauna -Scontrone is placed on the southern borderline of the Abruzzo National Park, Central-Southern Apennine. The bone-bearing sediments are coastaltidal-flat calcarenites stratigraphically dated to the Lower Tortonian. They yielded remains of terrestrial mammals, which include the bizarre ruminant Hoplitomeryx and the giant insectivore Deinogalerix, of a large terrestrial bird, and of large crocodilians and chelonians. At present, Hoplitomeryx, Deinogalerix and the crocodilians represent the elements in common with the Gargano community. The fauna is endemic and quite unbalanced. Six species of Hoplitomeryx have been described until now, but other species are adding to the list as new specimens are being freed from the calcarenites. Deinogalerix seems also represented by more than a single species. No mammal carnivores nor small mammals were found until now. The Gargano paleofauna - A very diversified endemic fauna is contained in soil deposits (Terre Rosse) that fill an extensive karst system at the north-western slopes of Mount Gargano (Southern Italy). The fossil assemblages include both large and small mammals, birds, reptiles, and amphibians, and are highly unbalanced. The small mammal component is mainly made of rodents, lagomorphs, and insectivores. Larger mammalian taxa are less abundant and are represented by Hoplitomericidae, Deinogalerix. And the sea otter Paralutra garganensis. The fissure fillings have been arranged in a biochronological sequence based on their different faunal composition and evolutionary degree. During the time period documented by the fissure deposits the faunal diversity changed and several taxa underwent significant evolutionary modifications, giving rise to numerous adaptive radiations. Taxa weakly- or non-modified compared to their continental counterparts characterize the oldest assemblages. They likely represent the youngest dispersal phase from the mainland into the insular domain, suggesting a polyphasic origin of the community.Evidence of apparently the oldest faunal settlement in Gargano was found in the recently discovered fissure M013. It contains remains of a new murid, which is manifestly the ancestor of Mikrotia (the endemic and widespread murid of the Terre Rosse), together with those of a new Cricetodontinae, which resembles primitive early Miocene representatives. These occurrences, in addition to the absence of Apodemus and Prolagus, two ubiquitous taxa of the Terre Rosse fillings, confirm that the assemblages are the result of a set of successive bioevents. The age and paleogeography of Scontrone and Gargano: the Abruzzo-Apulian domain - The Early Tortonian age of the Scontrone fauna is unequivocally proven not only by solid geologic evidence, but also by the Hoplitomeryx representatives, which are comparatively more primitive than their Gargano counterparts. The same might apply to the Deinogalerix specimens from the two localities, but analyses are still under way to check this aspect. The Gargano fissure fillings are tentatively dated to the Late Miocene on the basis of paleontological inferences, namely the occurrence of Apodemus, which is supposed to be not older than MN12 in the European mainland. The Gargano’s younger age possibly reflects the fact that the Gargano palaeo-islands formed stable structural high, while the Scontrone area was involved in the Apennine build-up and gradually sunk. Thus, the faunas from Scontrone and Gargano represent two different time slices within the same bioprovince. The colonization of the Abruzzo-Apulia domain - The existence, from the Late Oligocene to the Langhian, of a trans-Adriatic structural high between Dalmatia and the Gargano Peninsula, through the present day Tremiti Islands, was ascertained based on the seismostratigraphic analysis of more than 6000 kilometers of reflection seismic profiles from the Adriatic offshore, but also on several tens of deep wells. The major 29-30 Ma global sea-level fall caused the generalized surfacing of this structure across the Adriatic. The trans-Adriatic isthmus was originally in the form of stripe of land. Then, as the sea level turned growing at the transition to the Early Miocene, the structural high likely gave rise to an archipelago of gradually shrinking islands. The isthmus definitively sank at the end of the Langhian, i.e. around 14.8 Ma, and the Abruzzo-Apulian area remained cut off from any near mainland for the next 7 million years. Dalmatia and the Gargano were connected again during the Messinian sea lowstand. Thereafter, the sea level turned gradually to rise again, at first isolating the Abruzzo-Apulian area and then finally submerging it entirely at the very end of the Messinian. The possible ways of colonization used by the Messinian colonizers is still passionately debated. Although many steps have been made in the direction of improving our understanding of the history of the Abruzzo-Apulian Platform and of its faunal communities, yet many issues are still unanswered. Settling these issues will not only give us a better insight into the development of the Abruzzo-Apulian faunas per se, but will also lead us to a better understanding of the geo– and biodynamics of paleoislands in general

New insular taxa from the oldest Terre Rosse fissure filling (Gargano, Southeastern Italy).

A rich amount of fossil remains of a highly diversified vertebrate fauna, known as “Mikrotia fauna”, has been retrieved from the red soil deposits (Terre Rosse) which fill the extensive palaeokarst network that affects the Mesozoic limestone along the north-western slopes of Mount Gargano (Southern Italy). The faunal assemblages reveal a rather complex history of bioevents such as dispersals and extinctions, which occurred when the area was isolated. These reconstructions were based on the materials collected during the seventies and the eighties of the last century. Forty years after its discovery, the Gargano Terre Rosse finally yielded evidence of an older faunal settlement. The peculiar assemblage of the M013 fissure allows to explain some of the controversial aspects of the Gargano faunal history, namely, the matter of the biochronology of the older fissure fillings and the issue of the arrivals of the taxa in the insular domain. The taxonomic study of the small mammal assemblage from fissure M013, sampled by a team of the University of Torino during the 2005-09 excavations in the Dell’Erba Quarry (Apricena, Foggia), is here presented. Insectivores include a small-sized endemic Galericinae Apulogalerix cf. pusillus, together with a Crocidosoricinae, Lartetium cf. dehmi. Gliridae are well represented by the endemic species Stertomys simplex and S.lyrifer. Cricetids (l.s.) are represented by a single remain belonging to the endemic Hattomys cf. nazarii, but also by a new genus and species of an endemic and rather primitive Cricetodontinae. The latter shows a very hypsodont dental crown, stocky cusps and tubercle-like crests. Some of its features are typical of the continental genera of Cricetodontinae (i.e. large size, thick and crenulated enamel), however the very large size and the very high hypsodonty indicate the endemic nature of this taxon. The occlusal pattern appears rather primitive due to the very low, poorly developed, interrupted ectolophs and share some features with the primitive species of the genus Cricetodon. Murids include Mikrotia parva together with a second larger species, which is not yet identified. A third Murinae rodent is quite abundant, and belongs to a new genus and species. Its dentition is more brachyodont than in Mikrotia parva, the upper teeth are stephanodont and, accordingly, the transversal crests are joined by a longitudinal crest in the lower molars. Tubercle t7 is absent in the upper molars, t2bis is always present, while t1bis is usually absent in the first upper molar. Tubercle t1 is placed in a distal position respect to the t3, the posterolabial tubercle t12 is well-developed. Tubercles t3, t6 and t9 are roughly equidistant forming a regular pattern: a character that is found in Mikrotia and not in the other murid species, in which t6 is closer to t9. This morphological characters reveal a close relationship with Mikrotia, but they do not occur jointly in any of the Late Miocene-Earliest Pliocene European genera of murids, thus the phylogenetic origin of this new genus is still unclear. The occurrence of this new Murinae and of a Cricetodontinae distinguishes M013 from all the other Terre Rosse fissure fillings of Gargano. Stertomys lyrifer and S. simplex were previously known only from the very ancient fissure Rinascita 1. Because both taxa characterize M013 and Rinascita 1, the two fissures are believed to be very close chronologically. Also the Crocidosoricinae characterises the older fissure fillings. In contrast, M013 is the only fissure lacking Apodemus and Prolagus, which are otherwise present in all the other Gargano infillings. The accumulated evidence indicates M013 as the oldest of Gargano’s faunal assemblages, despite the occurrence of Hattomys cf. nazarii, Mikrotia cf. parva and Mikrotia sp1, which most probably results from infiltrations from younger fissure fillings. The M013 assemblage is an absolute novelty for the Abruzzo-Apulian Palaeobioprovince and opens a new perspectives for the timing and mode of dispersal of the forerunners of the Gargano fauna