Industry profit maximizing R and D networks

In this paper, we extend the model of R and D network formation by Goyal and Moraga-Gonzàlez (2001) by allowing for imperfect spillovers among linked firms. We show that the complete network maximizes industry profit if spillovers for linked firms are below a threshold level. Furthermore, this threshold level turns out to be high in absolute terms in concentrated markets: when the number of firms is low, small departures from the case of perfect spillover imply that firms' private incentives to form links cannot be excessive with respect to their collective interest. This implies that the Goyal and Moraga-Gonzalez argument, for which excessive private incentives could explain the empirical stylized fact of R and D alliances instability, is no longer valid in these cases.R&D networks

Competition between and within Tourist Destinations

The aim of this paper is to analyze theoretically two levels of competition that are relevant in tourism markets, i.e. between and within tourist destinations. In particular, the focus of this paper lies in the relationship between the degree of (exogenous) differentiation between destinations and the (endogenous) degree of competition within the destination. Our main result is that an increase in the intensity of competition between destinations induces destination managers to increase competition within each destination. When the intensity of competition between destinations increases, the incentives to increase the intensity of competition within the destination are higher, since the subsequent increase in price leads to a larger gain in market shares. However, the strategy is followed by all destinations, with the consequence that firms’ profits in both destinations are dispersed in a “prisoner’s dilemma” scenario, reinforcing the negative effect of the increase in between destinations competition.tourist destinations,; tourism markets; hospitality industry

The evolution of R&D networks

This paper models the formation of R&D networks in an oligopolistic industry. In particular, it focuses on the coevolutionary process involving firms’ technological capabilities, market structure and the network of interfirm technological agreements.The main result of the paper is that the R&D network can work as a strong selection mechanism in the industry, creating ex post asymmetries among ex ante similar firms. This is due to a self-reinforcing, path-dependent process, in which events in the early stages of the industry affect firms’ survival in the long run. In this framework, both market and technological externalities created by the formation of cooperative agreements play a crucial roe. Although the R&D network creates profound differences at the beginning, which are reflected by an unequal distribution of links, it tends to eliminate them as it becomes denser and denser. The nature of the technological environment affects the speed of the transition and some of the characteristics of the industry in the long run.industrial organization ;

“Should I stay or should I go?”: Weather forecasts and the economics of “short breaks”

The aim of this paper is to model the decisions of tourists and a monopolist firm when weather forecasts are available. Before deciding whether to go on holiday or not, but after the firm has decided and posted its price, tourists can look at weather forecasts. Our results show that the price chosen by the firm and the corresponding equilibrium profit are decreasing as a function of the accuracy of weather forecasts. Consumers, instead, are better off the more accurate weather forecasts become. Managerial and policy implications are also derived

Me and you and everyone we know: an empirical analysis of local network effects in mobile communications.

This paper aims at investigating the importance that consumers assign to local network effects (i.e. the extent to which they take into account their contacts’ operators in determining their choices) and at identifying which individual characteristics affect consumers’ preferences in relation to local network effects. Based on a sample of 193 Italian students, we find that consumers are highly heterogeneous with respect to the evaluation of the importance of their friend/family’s operator when choosing their own provider, and that such heterogeneity is associated to specific characteristics related to individual innovativeness and patterns of mobile phone usage. In particular, consumers who are more interested in local network effects are typically sophisticated users, who use intensively voice services and who are early adopters. Interestingly, consumers who pay attention to local network effects end up spending relatively little in proportion to their intensity of use.

O. Shy, How to price. A guide to pricing techniques and yield management, Cambridge University Press 2008

This article is a review of the book: O. Shy \u201cHow to price. A guide to pricing techniques and yield management\u201d (Cambridge University Press, 2008). With this book, Shy pursues two goals. The first one is conceptual, and lies in the attempt of providing a unifying framework for contributions on yield management and pricing coming from different disciplines such us operations research, marketing and economics. The second one is pedagogical, in that the book is structured in a way to be suitable (possible with integrations) for teaching yield management courses both for undergraduate and graduate students in business and economics, and to be of interest for practitioners as well

Add-on pricing: theory and evidence from the cruise industry

In many industries, firms give consumers the opportunity to add (at a price) optional goods and services to a baseline product. The aim of our paper is to provide a theoretical model of add-on pricing in competitive environments with two new distinctive features. First, we discuss the choice of offering the add-on, assuming that this entails a fixed cost. Second, we allow firms to have a varying degree of market power over the add-on, associated with the ability to capture the value that consumers obtain from such an additional good/service. Our model shows that the conventional wisdom, according to which offering the add-on should unambiguously lower the price of the baseline product, is not always supported. In asymmetric equilibria, in which only one firm offers the add-on, baseline prices are higher if the firm’s market power over the add-on is limited. The predictions of the model are confirmed by a hedonic price model on a dataset of cruises offered worldwide

“…then came Cisco, and the rest is history”: a ‘history friendly’ model of the Local Area Networking industry

We study the role that switching costs, compatibility, and mergers and acquisitions, play in influencing the evolution of a multi-market industry. By looking at the case of the Local Area Networking industry, we propose a ‘history friendly model’ to replicate its evolution during the 1990s. Our model explains how a firm can start from a dominant position in one of the existing markets and exploit switching costs and compatibility to enter a new market when it opens. Mergers and acquisitions also play an important role as the new market is pioneered by a new start-up, which is soon acquired by the dominant incumbent. As a result of the acquisition, the acquiring firm becomes leader also in the new market

A supply side story for a threshold model: Endogenous growth of the free and open source community

The study of social institutions producing and disseminating knowledge has mainly concentrated on two main concepts: Science and Technology. This paper examines a recent institutional form that seems not to resemble either of the other two; that is, knowledge-intensive communities, where individuals freely exchange knowledge through information and communication technology. Using free and open source software as an example, we develop a model where this phenomenon is confronted with Technology with respect to its ability to attract researchers