A note on Research and Development and Voluntary Export Restrictions".

This note qualifies the statement made in Bouët (2001), European Economic Review 45, 323-336, by showing that within the model proposed by the author the effect of a VER on research and development does depend on the mode of competitionprice competition

Entry Deterrence and Strategic Delegation

We consider a game in which firms' owners assign to their managers a delegation scheme weighting profits and market shares. Managers then compete in quantities. We show first that this delegation scheme typically leads to quantities being strategic substitutes or complements depending on firms' relative size. Second, we consider a game of entry and show that the incumbent may achieve entry deterrence using this delegation scheme. When entry is deterred, the incumbent acts as a pure monopolist.Entry deterrence; market shares; strategic delegation

Market coverage and the nature of product differentiation : a note

In this note, we analyze the equilibrium outcomes of pricing games with product differentiation in relation with the extent of market coverage. It is a received idea in the IO literature that the horizontal and vertical models of product differentiation are almost formally equivalent. We show that this idea turns out to be wrong when the full market coverage assumption is relaxed. We then argue that there exist two fundamentally different classes of address-models of differentiation, although their difference is not perfectly captured by the standard horizontal/vertical typologyprice competition, product differentiation

Market coverage and the nature of product differentiation: a note

In this note, we analyze the equilibrium outcomes of pricing games with product differentiation in relation with the extent of market coverage. It is a received idea in the IO literature that the horizontal and vertical models of product differentiation are almost formally equivalent. We show that this idea turns out to be wrong when the full market coverage assumption is relaxed. We then argue that there exist two fundamentally different classes of address-models of differentiation, although their difference is not perfectly captured by the standard horizontal/vertical typology.price competition, product differentiation, vertical differentiation, horizontal differentiation

Competitively Neutral Universal Service Obligations

Universal service obligations impose specific costs on the universal service provider. The measure of these costs and their financing have been studied along two complementary lines of reasoning: is the uni- versal service obligation sustainable? Who should bear its costs? Most often, a two-step procedure is put forward. In a first step the cost of USO must be assessed; in a second step the USP must be compensated for this cost. In this paper we argue that this procedure is most often problematic because the implementation of the compensation scheme directly affects the effective cost of USO. We therefore put forward an alternative approach to this problem which does not rely on this two- step procedure and fully acknowledges the distortions that result from the compensation mechanism.

Competitively neutral universal service obligations

Universal service obligations impose specific costs on the universal service provider. The measure of these costs and their financing have been studied along two complementary lines of reasoning: is the universal service obligation sustainable? Who should bear its costs? Most often, a two-step procedure is put forward. In a first step the cost of USO must be assessed; in a second step the USP must be compensated for this cost. In this paper we argue that this procedure is most often problematic because the implementation of the compensation scheme directly affects the effective cost of USO. We therefore put forward an alternative approach to this problem which does not rely on this two-step procedure and fully acknowledges the distortions that result from the compensation mechanism.universal service obligations, cost-sharing mechanism, competitive neutrality

Export Restraints and Horizontal Product Differentiation

We consider the effects of export restraints on price competition in the Hotelling model of horizontal differentiation. We characterize the Nash equilibrium for all possible values of the quota and compare our results with those of Krishna (89). We show that a foreign producer would choose a VER in the vicinity of the Free Trade Equilibrium. In order to maximize domestic welfare, a government would necessarily choose complete protectionism nor Free Trade.Hotelling; optimal quota; price competition

On the Nature of Price Competition Under Universal Service Obligations: a Note

The imposition of universal coverage and uniform pricing constraints, as part of the universal service obligations, makes the universal service provider less aggressive in the price game when it competes with a rm that does not cover the whole set of markets (Valletti et al., 2002). In this paper, we fully characterize the resulting price equilibrium when universal service obligations are imposed. With a limited market coverage by the entrant or a small degree of degree of product di erentiation, the equilibrium is a mixed strategy one.

Regulating quality by regulating quantity : a case against minimum quality standards

We show in a simple model of entry with sunk cost, that a regulator prefers limiting the output, or capacity, of the incumbent firm rather than imposing a "Minimum Quality Standard" in order to help the entrant to provide high quality. As a by-product, our analysis makes a contribution to the study of Bertrand-Edgeworth competition in a market with differentiated products.quality, minimum quality standards, price competition

Sales Restriction, Quality Selection and the Mode of Competition

A regulator imposing "sales restrictions" on firms competing in oligopolistic markets may enhance quality provision by the firms. Moreover, for most restrictions levels, the impact on quality selection is invariant to the mode of competition.Quality; Quota; Oligopolistic Competition