Multi-stage Double Auctions With Many Bidders

Traditionally in a Double Auction (also known as Bilateral Trade) a seller and a buyer interact to sell an object. Earlier literature had shown that in such a situation no mechanism will guarantee efficiency, incentive compatibility, individual rationality, and balanced budget condition. In this note we will argue that if we “sufficiently†increase the number of buyers then there is a two stage mechanism which satisfies all the four conditions stated above.Bidding Strategies, Double Auctions

Changing Features of the Automobile Industry in Asia:Comparison of Production, Trade and Market Structure in Selected Countries

The global automotive industry, increasingly characterized by global mergers and relocation of production centers to emerging developing economies, is in the grips of a global price-war. The industry is subject to imperfect competition which has resulted in too much of everything — too much capacity, too many competitors and too much redundancy and overlap. The industry is concerned with consumer demands for styling, safety, and comfort; and with labor relations and manufacturing efficiency. In this context, the study examines the growth patterns, changes in ownership structures, trade patterns and role of governments of selected Asian countries (viz. China, India, Indonesia and Thailand) in the automobile sector.Automobile, Asia, Market Structure

R&D incentives with uncertain probability of success

A firm’s decision to invest in R&D depends on a number of factors like availability of funds, extent of R&D spillovers, market structure, and success probability. However, probability of success depends, to a large extent, on factors endogenous to a firm. This means, success probability can be known to the firm undertaking R&D investment, not to the rivals, hence there is incomplete information about probability of success in R&D. There are also uncertainties about rival’s R&D decision and R&D status. In a duopoly we show that there is a non-monotone relation between R&D incentives and the level of information

Collaborative Research and Rate of Interests

This paper makes an attempt to link collaborative research in industry with Government initiative and market rate of interests. Two firms involved in Cournot competition in the market are deciding whether to conduct research to device a technique for cost reduction. Amount of cost reduction after the research and the initial amount of capital possessed by each firm are private information to each of the firms. In particular both of them are having capacity constraint. Our objective here is to figure out the impacts of the lending and borrowing rates of interest on collaborative research. In the process we study the effectiveness of different policies to encourage collaborative R&D

Collaborative Research and Rate of Interests

This paper makes an attempt to link collaborative research in industry with Government initiative and market rate of interests. Two firms involved in Cournot competition in the market are deciding whether to conduct research to device a technique for cost reduction. Amount of cost reduction after the research and the initial amount of capital possessed by each firm are private information to each of the firms. In particular both of them are having capacity constraint. Our objective here is to figure out the impacts of the lending and borrowing rates of interest on collaborative research. In the process we study the effectiveness of different policies to encourage collaborative R&D

Competition and Auctioning Licenses

Promoting competition in domestic markets is very often an important policy concern of governments in context of developmental objectives. Direct government intervention of different forms to promote competition becomes all the more necessary especially in the markets that have higher tendencies to concentrate. For example, in the market for telecom spectrum licenses, many countries impose ceilings on the number of licenses that a single individual company can possess. It is commonly believed that in the markets where permission from government is required for fresh operation or expansion of operation, e.g. through licenses, larger number of licenses lead to higher competition. But some earlier literature show that increasing the number of licenses might actually be detrimental to competition contrary to popular belief. This paper considers a situation where there is an incumbent monopolist in a market; the government is auctioning two new licenses, one for this same market and another one for a completely new market where no firm had been operating so far. A number of potential entrants are willing to bid for both the licenses. The incumbent firm is allowed to purchase only one of these licenses. If it purchases the license for its own market it can retain its monopoly position. The selling procedure dictates that only the potential entrants will be bidding and in order to purchase the license in its existing market, the incumbent monopolist has to match the highest bid in that auction. Alternatively, it can bid for the entry license for the new market. This paper tries to identify under what conditions the incumbent firm will bid for the outside market. It also tries to find under what conditions providing some other options to the incumbent firm leads to increased competition in the existing market, thus contributing to developmental prospects by enhancing social welfare

High Technology Products Exports by India and China: A Constant Market Share Analysis

With more and more globalization, international trade has expanded to a large extent. This is also observable for trades in high technology products. India and China have emerged as two major exporters of high technology products in the world today. This paper makes an attempt to understand the various dimensions of high technology products exports from these two countries through constant market share (CMS) analysis and also the policy implications by looking at the various components of export growth from the CMS analysis

High Technology Products Exports by India and China: A Constant Market Share Analysis

With more and more globalization, international trade has expanded to a large extent. This is also observable for trades in high technology products. India and China have emerged as two major exporters of high technology products in the world today. This paper makes an attempt to understand the various dimensions of high technology products exports from these two countries through constant market share (CMS) analysis and also the policy implications by looking at the various components of export growth from the CMS analysis

Cooperative vs. Non-cooperative R&D under Uncertain Probability of Success

R&D decision of a firm involves various sources of incomplete information. The present paper introduces incomplete information about the success probability of R&D in a model of two firms interacting in R&D and production and discusses the choice between cooperative and non-cooperative research. We consider research joint venture as the form of R&D cooperation. While the choice depends on the constellation of parameters, the following results are derived, in general. First, the high type firm always has a larger incentive for both cooperative and non-cooperative R&D compared to the low type firm. Second, if the low type firm goes for non-cooperative research, then the high type firm must go for the same, and if the high type firm prefers cooperative research, the low type firm must also prefer cooperative R&D. However, if the high type firm prefers non-cooperative R&D, the low type firm may go for either form of research depending on the parameters. The paper derives conditions, in particular, for the case when the high type firm prefers non-cooperative research whereas the low type firm prefers cooperative research

Competition and Auctioning Licenses

Promoting competition in domestic markets is very often an important policy concern of governments in context of developmental objectives. Direct government intervention of different forms to promote competition becomes all the more necessary especially in the markets that have higher tendencies to concentrate. For example, in the market for telecom spectrum licenses, many countries impose ceilings on the number of licenses that a single individual company can possess. It is commonly believed that in the markets where permission from government is required for fresh operation or expansion of operation, e.g. through licenses, larger number of licenses lead to higher competition. But some earlier literature show that increasing the number of licenses might actually be detrimental to competition contrary to popular belief. This paper considers a situation where there is an incumbent monopolist in a market; the government is auctioning two new licenses, one for this same market and another one for a completely new market where no firm had been operating so far. A number of potential entrants are willing to bid for both the licenses. The incumbent firm is allowed to purchase only one of these licenses. If it purchases the license for its own market it can retain its monopoly position. The selling procedure dictates that only the potential entrants will be bidding and in order to purchase the license in its existing market, the incumbent monopolist has to match the highest bid in that auction. Alternatively, it can bid for the entry license for the new market. This paper tries to identify under what conditions the incumbent firm will bid for the outside market. It also tries to find under what conditions providing some other options to the incumbent firm leads to increased competition in the existing market, thus contributing to developmental prospects by enhancing social welfare