Investment Dynamics in Markets with Endogenous Demand.

In several interesting markets, demand is an increasing function of past sales because of learning, network externalities, or fashion. This paper examines entry into such markets.PRODUCTION;ENTERPRISES;MARKET

the Failling Rate of Profit. Entry, Exit, and Coordination with Mixed Strategies.

GAME THEORY;MARKETS

On intrabrand and interbrand competition: The strategic role of fees and royalties

We examine oligopolistic markets with both intrabrand and interbrand competition. We characterize equilibrium contracts involving a royalty (or wholesale price) and a fee when each upstream firm contracts with multiple downstream firms. Royalties control competition between own downstream firms at the expense of making them passive against rivals. When the number of downstream firms is endogenous, each upstream firm chooses to have only one downstream firm. This result is in sharp contrast to previous literature where competitors benefit by having a larger number of independent downstream firms under only fixed fee payments. We discuss why allowing upstream firms to charge per-unit payments in addition to fixed fees dramatically alters their strategic incentives. © 2002 Elsevier Science B.V. All rights reserved

Entry auctions and strategic behavior under cross-market price constraints

We examine how universal service provisions and price restrictions across markets impact strategic entry and pricing. We develop a simple multi-market model with an oligopolistic (profitable) urban market and entry auctions for (unprofitable) rural service. Cross-market price restrictions induce a firm operating in both markets to become a 'softer' competitor, thus placing the firm at a strategic disadvantage. When we account for entry incentives and strategic bidding, the downstream strategic disadvantage becomes advantageous, leading to higher prices and profits. Price restrictions may also put outside firms, even relatively inefficient ones, at a strategic advantage. © 2002 Elsevier Science B.V. All rights reserved