The Regulation Level of Business Hours

Using the model based on Inderst and Irmen (2005), we analyze retail industries with competition in business hours and prices and examine the desirable degree of business hours regulation for policy makers who have objectives to enhance the welfare. We find that the strict regulation of business hours, which business hours are regulated in all regions, enhances the welfare only when the transportation cost parameter is relatively large. This implies that, contrary to some previous studies, the deregulation is not always welfare enhancing. Although some countries have regulated business hours only in some regions, such partial regulation might worsen the welfare because a retail store located at deregulated regions charges a higher price

The Optimal Trading Partner for an Upstream Monopolist

We examine an optimal trading partner for an upstream monopolist, an input supplier, in a situation in which the intensity of market competition depends on trading partner choice. The upstream monopolist supplies the input to either the incumbent or the entrant. We assume only incumbent has the outside option which it can make the input by itself and then produces the final product. On the other hand, the entrant does not have the outside option. If the upstream firm chooses the incumbent as its trading partner, it can have a bilateral monopoly relationship with the incumbent. If the upstream firm chooses the entrant as its trading partner, it faces downstream competition. We show trading with the entrant can yield greater profits for the upstream monopolist than trading with the incumbent. Thus, the upstream monopolist has incentives to encourage downstream competition through its trading partner choice. Our paper suggests that the existence of the incumbent's outside option encourages new entry into the downstream market

Opening Hours, Store Quality, and Social Welfare

This paper examines retailer’s strategies related to opening hours, store quality, and price. We consider a scenario in which the investment in store quality is more costly for longer opening hours. This scenario is suitable for a case where a retailer invests in quality of service such as concierge service and security service in order to increase customers’ convenience during business hours. We show that a retailer with shorter opening hours chooses higher service quality and charges lower prices. We also examine the impact of the liberalized and the regulated opening hours on social welfare. We find that the liberalized opening hours is desirable in view of social welfare because service quality and demand in the liberalized opening hours are greater than those in the regulated opening hours

The Optimal Trading Partner for an Upstream Monopolist

We examine an optimal trading partner for an upstream monopolist, an input supplier, in a situation in which the intensity of market competition depends on trading partner choice. The upstream monopolist supplies the input to either the incumbent or the entrant. We assume only incumbent has the outside option which it can make the input by itself and then produces the final product. On the other hand, the entrant does not have the outside option. If the upstream firm chooses the incumbent as its trading partner, it can have a bilateral monopoly relationship with the incumbent. If the upstream firm chooses the entrant as its trading partner, it faces downstream competition. We show trading with the entrant can yield greater profits for the upstream monopolist than trading with the incumbent. Thus, the upstream monopolist has incentives to encourage downstream competition through its trading partner choice. Our paper suggests that the existence of the incumbent's outside option encourages new entry into the downstream market

Opening Hours, Store Quality, and Social Welfare

This paper examines retailer's strategies related to opening hours, store quality, and price. We consider a scenario in which the investment in store quality is more costly for longer opening hours. This scenario is suitable for a case where a retailer invests in quality of service such as concierge service and security service in order to increase customers' convenience during business hours. We show that a retailer with shorter opening hours chooses higher service quality and charges lower prices. We also examine the impact of the liberalized and the regulated opening hours on social welfare. We find that the liberalized opening hours is desirable in view of social welfare because service quality and demand in the liberalized opening hours are greater than those in the regulated opening hours

Strategic Trading Partner Selection for an Upstream Licenser

This paper examines the determinant of trading partner selection for a licenser. The licenser negotiates with either a downstream incumbent which has its own production facility (the outside option) or a downstream entrant, and determines a two-part tariff for licensing. If the licenser trades with the entrant (the incumbent), the downstream market becomes a duopoly (monopoly). We find that the licenser’s bargaining power over the incumbent does not influence the licenser’s decision on its trading partner although that over the entrant, its marginal costs of licensing to the entrant and the incumbent, and the incumbent’s outside value matter for its decision

Opening Hours and Quality Choices

Using a duopoly model with symmetric retailers, we show that retailer strategies regarding opening hours and quality choices of goods vary depending on the cost structure of the quality investment in goods. In the case of the cost remaining constant regardless of the length of opening hours, a retailer with longer opening hours chooses higher quality and charges higher prices. Conversely, in the case of the cost increasing proportional to opening hours, a retailer with longer opening hours chooses lower quality and charges lower prices. The latter case is consistent with the behavior of retailers in Japan

Effective Leadership Selection in Complementary Teams

This paper considers effective leadership selection in a simple two-person team production model with heterogeneous agents. We demonstrate leadership success through synergy by showing that the existence of synergy makes effort complementary, implying that the leader devote more effort than the follower and that a team with a leader yields greater production than a team without a leader. We also show that, to elicit greater team production, a principal should appoint the agent with higher (lower) opportunity cost as the leader (follower). Even if the agents' opportunity costs are unobservable to the principal, the principal can select a better leader by proposing a larger position allowance for the leader. The results may explain why many organizations indeed favor leadership styles and why real-world leaders receive higher compensation than followers

Skill Diversity and Leadership in Team Production

Using a team-production model with heterogeneous workers, we examine the short- and long-run efficiency effects of skill diversity and leadership in teams. Our analysis focuses on workers' strategic incentives to manipulate their skills. In the short run, heterogeneous pairing (pairing workers with different skills) yields a greater total production than homogeneous pairing. However, in the long run, homogeneous paring may yield a greater total production because of gradual improvements in workers' skill. We also show new potential benefits of leadership: assigning a leader to a team yields a smaller total production in the short run, but, a greater production in the long run by preventing workers from consistently reducing their skills