Price and Quantity Competition Revisited

By enlarging the parameter space originally considered by Singh and Vives (1984) to allow for a wider range of cost asymmetry, Zanchettin (2006) finds that the Singh and Vives result that firms always make larger profits under quantity competition than under price competition fails to hold. This paper shows that while profit ranking between price and quantity competition can be (partially) reversed the celebrated result by Singh and Vives that firms always choose a quantity contract in a two-stage game continues to hold in the enlarged parameter space.

Free Entry in a Cournot Market with Imperfectly Substituting Goods

Two results are shown about the free-entry equilibrium in a Cournot market with asymmetric firms and imperfectly substituting goods. First, only one technology will survive in the production of each good. Second, some good(s) may not be produced. Specifically, we show that in a two-good model only one good is produced if the substitution parameter is higher than a critical value and both goods are produced for smaller substitution parameter values.Free-entry equilibrium; Cournot competition; substituting goods

On Welfare under Cournot and Bertrand Competition in Differentiated Oligopolies

Hackner (2000) shows that in a differentiated oligopoly with more than two firms , prices may be higher under Bertrand competition than under Cournot competition, implying that the classical result of Singh and Vives (1984) that Bertrand prices are always lower than Cournot prices is sensitive to the duopoly assumption. Hackner (2000), however, leaves unanswered the important question of whether welfare may be lower under price competition. This note shows that in Hackners model both consumer surplus and total surplus are higher under price competition than under quantity competition regardless of whether goods are substitutes or complements.Bertrand; Cournot; Differentiated oligopoly; Welfare

On Technology Transfer to an Asymmetric Cournot Duopoly

This note studies the transfer of a cost-reducing innovation from an independent patent-holder to an asymmetric Cournot duopoly that has different unit costs of production. It is found that royalty licensing can be superior to fixed-fee licensing for the independent patent-holder.Cournot duopoly

Customization: Ideal Varieties, Product Uniqueness and Price Competition

We study customization in the Hotelling model with two firms. In addition to providing ideal varieties, the perceived uniqueness of a customized product contributes independently to consumer utility. We show that only when consumer preferences for uniqueness are high customization occurs in equilibrium.customization, product differentiation, product uniqueness, price competition

Why Are Firms Sometimes Unwilling to Reduce Costs?

This paper establishes three new results for multiproduct oligopolies: 1) it presents the first explicit expression of Nash equilibria for asymmetric multiproduct oligopolies; 2) it shows that reducing a multiproduct firms cost in Bertrand oligopolies will reduce its profits if the cost-reducing unit is sufficiently small; and 3) it demonstrates that a multiproduct firm has no incentive to eliminate a product whose sales are zero. Because a single-product firm whose sales are zero is indifferent between exiting and staying, and its cost reductions always increase its profits, our results are unique to the multiproduct firm, and they suggest that extending oligopoly studies from a single product to multi-products could be as significant as the extension of calculus from a single variable to multi-variables.Effect of cost reduction, multiproduct oligopoly, price competition, quantity competition

On the Licensing of Innovations under Strategic Delegation

This note uses a three-stage delegation-licensing-quantity game to study the licensing of a cost-reducing innovation by a patent-holding firm to its competitor. It is shown that licensing is less likely to occur under strategic delegation compared to no delegation.licensing strategic delegation

Innovation Initiatives in Large Software Companies: A Systematic Mapping Study

To keep the competitive advantage and adapt to changes in the market and technology, companies need to innovate in an organised, purposeful and systematic manner. However, due to their size and complexity, large companies tend to focus on maintaining their business, which can potentially lower their agility to innovate. This study aims to provide an overview of the current research on innovation initiatives and to identify the challenges of implementing the initiatives in the context of large software companies. The investigation was performed using a systematic mapping approach of published literature on corporate innovation and entrepreneurship. Then it was complemented with interviews with four experts with rich industry experience. Our study results suggest that, there is a lack of high quality empirical studies on innovation initiative in the context of large software companies. A total of 7 studies are conducted in such context, which reported 5 types of initiatives: intrapreneurship, bootlegging, internal venture, spin-off and crowdsourcing. Our study offers three contributions. First, this paper represents the map of existing literature on innovation initiatives inside large companies. The second contribution is to provide an innovation initiative tree. The third contribution is to identify key challenges faced by each initiative in large software companies. At the strategic and tactical levels, there is no difference between large software companies and other companies. At the operational level, large software companies are highly influenced by the advancement of Internet technology. Large software companies use open innovation paradigm as part of their innovation initiatives. We envision a future work is to further empirically evaluate the innovation initiative tree in large software companies, which involves more practitioners from different companies