Essays on Timing of Firm Actions in Industrial Economics

The timing of actions by firms plays an important role in industrial economics. It is key to strategic advantage in oligopoly models whether firms compete on quantity or on price. In a vertical relationship between input suppliers and final-good manufacturers, a firm which chooses a strategy first will take into account the response by those firms moving second and different sequence of play leads to different market outcomes. In my dissertation, I study the determinants and implications of the timing of firm actions in a variety of scenarios. In my first two essays, I examine how market leadership may arise endogenously in oligopoly models and focus on the effect of information about uncertain market demand. My first essay studies a quantity game and I identify the circumstance under which a perishable information asymmetry regarding stochastic demand causes market leadership. In an information acquisition game, I show that Stackelberg equilibrium in the full game is supported only when firms have different costs of information. My second essay considers a duopoly in which firms supply a differentiated product and compete on price. I find that different equilibrium outcomes arise under different information structures. Under asymmetric information, a firm’s information advantage leads to a strategic disadvantage of leading in the price game. The time value of information may well be negative, contrasting with results in the first essay. In my third essay, I consider a vertical relationship in which a supplier sets the price of an input and the firm that produces the final good must choose how much to invest in some complementary input or process. Two models with different sequence of firm actions are studied and yield different pricing strategies for the upstream monopolist. Interestingly, a change of the sequence from one model (the upstream firm commits to input prices first) to the other (the upstream firm sets input prices after investments are made) benefits all parties including the upstream monopolist, the downstream firms and the consumers

Inducing R&D investment with price ceilings

Though government intervention is prevalent in the market for research and development (R&D), most literature has focused on the use of subsidies, patents or joint research ventures to obtain the efficient R&D investment. By using a two-stage duopoly model in which firms first choose the level of investment and then output, our paper shows that the introduction of a price ceiling by the regulator will result in the optimal level of R&D. This interesting but counterintuitive result contrasts with the existing literature and advances our understanding about price ceilings.Research and development; Subsidy; Price ceiling

Impulsive Thermal X-ray Emission from a Low-lying Coronal Loop

Understanding the relationship among different emission components plays an essential role in the study of particle acceleration and energy conversion in solar flares. In flares where gradual and impulsive emission components can be readily identified the impulsive emission has been attributed to non-thermal particles. We carry out detailed analysis of H\alpha\ and X-ray observations of a GOES class B microflare loop on the solar disk. The impulsive hard X-ray emission, however, is found to be consistent with a hot, quasi-thermal origin, and there is little evidence of emission from chromospheric footpoints, which challenges conventional models of flares and reveals a class of microflares associated with dense loops. H\alpha\ observations indicate that the loop lies very low in the solar corona or even in the chromosphere and both emission and absorption materials evolve during the flare. The enhanced H\alpha\ emission may very well originate from the photosphere when the low-lying flare loop heats up the underlying chromosphere and reduces the corresponding H\alpha\ opacity. These observations may be compared with detailed modeling of flare loops with the internal kink instability, where the mode remains confined in space without apparent change in the global field shape, to uncover the underlying physical processes and to probe the structure of solar atmosphere.Comment: 10 figures, to appear on Ap

Timing of investments and third degree price discrimination in intermediate good markets

We study third degree price discrimination in intermediate good markets, in which costs of production for the downstream firms are determined by their investment choices. We focus on the effect of the sequence of firm actions and analyze two models with different timing of investments, before or after the upstream monopolist sets the input prices. When investments are determined after the prices are set, an indirect effect of input prices on the derived demand from downstream firms must be taken into account, due to the change of investment incentives. This causes the upstream firm to possibly charge the more efficient downstream firm a lower price, a result contrasting previous findings. Using linear demand and quadratic investment costs, we show that not only the downstream firms but also the upstream monopolist prefers the sequence of play in the latter model, i.e., it benefits from committing to prices before investments are undertaken. A change of timing from the first model to the second constitutes a strict Pareto improvement

Timing of investments and third degree price discrimination in intermediate good markets

We study third degree price discrimination in intermediate good markets, in which costs of production for the downstream firms are determined by their investment choices. We focus on the effect of the sequence of firm actions and analyze two models with different timing of investments, before or after the upstream monopolist sets the input prices. When investments are determined after the prices are set, an indirect effect of input prices on the derived demand from downstream firms must be taken into account, due to the change of investment incentives. This causes the upstream firm to possibly charge the more efficient downstream firm a lower price, a result contrasting previous findings. Using linear demand and quadratic investment costs, we show that not only the downstream firms but also the upstream monopolist prefers the sequence of play in the latter model, i.e., it benefits from committing to prices before investments are undertaken. A change of timing from the first model to the second constitutes a strict Pareto improvement

Recent advances in clustering methods for protein interaction networks

The increasing availability of large-scale protein-protein interaction data has made it possible to understand the basic components and organization of cell machinery from the network level. The arising challenge is how to analyze such complex interacting data to reveal the principles of cellular organization, processes and functions. Many studies have shown that clustering protein interaction network is an effective approach for identifying protein complexes or functional modules, which has become a major research topic in systems biology. In this review, recent advances in clustering methods for protein interaction networks will be presented in detail. The predictions of protein functions and interactions based on modules will be covered. Finally, the performance of different clustering methods will be compared and the directions for future research will be discussed

Result Publication of Chinese Trials in World Health Organization Primary Registries

Result publication is the key step to improve the transparency of clinical trials.To investigate the result publication rate of Chinese trials registered in World Health Organization (WHO) primary registries.We searched 11 WHO primary registries for Chinese trials records. The progress of each trial was analyzed. We searched for the full texts of result publications cited in the registration records. For completed trials without citations, we searched PubMed, Embase, Chinese Biomedical Literature Database (Chinese), China Knowledge Resource Integrated Database, and Chinese Science and Technology Periodicals Database for result publications. The search was conducted on July 14, 2009. We also called the investigators of completed trials to ask about results publication.We identified 1294 Chinese trials records (428 in ChiCTR,743 in clinicaltrials.gov,55 in ISRCTN, 21 in ACTRN). A total of 443 trials had been completed. The publication rate of the Chinese trials in WHO primary registries is 35.2%(156/443).The publication rate of Chinese trials in clinicaltrials.gov, ChiCTR, ISRCTN, and ACRTN was 36.5% (53/145), 36.3% (89/245), 26.0%(9/44), and 55.6%(5/9), respectively. The publication rate of trials sponsored by industry(23.8%) was lower than that of sponsored by central and local government(31.7%), hospital(35.1%), and universities (40.7%). The publication rate for randomized trials was higher than that of cohort study and case-control study (33.2% versus 16.7%, 22.2%). The publication rate for interventional studies and observational studies was similar(33.4% versus 33.3%).The publication rate of the registered Chinese trials was low, with no significant difference between ChiCTR and clinicaltrials.gov. An effective mechanism is needed to promote publication of results for registered trials in China