Discriminatory prices, endogenous locations and the Prisoner Dilemma problem

In the Hotelling framework, the equilibrium first-degree discriminatory prices are all lower than the equilibrium uniform price. When firms’ locations are fixed, price discrimination emerges as the unique equilibrium in a game in which every firm may commit not to discriminate before setting the price schedule. This paper assumes endogenous locations and shows that uniform pricing emerges as the unique equilibrium in a game in which every firm may commit not to discriminate before choosing where to locate in the market. Price discrimination still is the unique equilibrium outcome when firms may commit only after the location choice.Price discrimination; Commitment; Location

The unidirectional Hotelling model with spatial price discrimination

The unidirectional Hotelling model where consumers can buy only from firms located on their right (left) is extended to allow for price discriminating firms and a general class of transportation costs. In a two-stage location-price game one firm locates at 1/2 and the other locates at 1 (0). We also study collusion in an infinitely repeated game. The maximum collusive profits sustainable in equilibrium monotonically increase (decrease) with the location of the firm located at the right (left), while initially increase and then decrease with the location of the firm located at the left (right). A higher reservation price of consumers makes perfect collusion less sustainable in equilibrium, but allows firms to agree on higher (albeit imperfect) collusive profits.Unidirectional Hotelling model; Price discrimination; Location-price game; Tacit collusion

Spatially asymmetric firms and the sustainability of a price agreement

We study collusion between price discriminating firms which are asymmetrically located in a linear city. We obtain that higher distance increases the sustainability of the collusive agreement for any degree of spatial asymmetry, and more spatial symmetry between firms increases collusion sustainability whatever is the location of the firms in the space, both assuming grim-trigger and optimal punishment.Collusion; Spatial asymmetry.

Firms' symmetry and sustainability of collusion in a Hotelling duopoly

We use a differentiated duopoly a la Hotelling to assess the impact of firms' symmetry on the sustainability of a tacit collusive agreement. We obtain that the smaller firm has the greater incentive to deviate and that symmetry helps collusion for any possible differentiation degree.

Another unconsidered sinister effect of indusrty-specific crises? On the possible emergence of adverse selection phenomena on the survival of entrepreneurial ventures.

This article explores the possibility that under an intensely negative industry-specific shock, the commonly detected positive relationship between the human capital of founders and the survival prospects of start-up businesses may actually be reversed. Starting from an analysis of the issue from a theoretical perspective in order to derive the necessary and sufficient conditions for the emergence of these adverse selection phenomena in entrepreneurship, the study examines a sample of 179 Italian start-ups operating in the ICT services market created during the boom period from 1995 to early 2000. Econometric analyses provide evidence that, during an intense industry crisis (i.e., early 2000 to 2003), entrepreneurs with a substantial amount of human capital may pursue an exit strategy.High-tech entrepreneurship; Adverse selection; Industry crises.

Product innovation and logistic optimization in a novel urban-type model

We consider the strategic choice between product innovation and logistic optimization in a novel urban framework where consumers are distributed across the city and have different incomes depending on their location in the town. Depending on the relative efficiency of the product innovation process and the logistic innovation process as well as on the degree of spatial symmetry between the firms, both symmetric and asymmetric business strategy equilibria may arise, as well as both unique and multiple business strategy equilibria.Product innovation; logistic optimization; linear town

DIRECT PRICE DISCRIMINATION AND PRODUCT DIFFERENTIATION IN THE HOTELLING FRAMEWORK

Questa tesi studia da una prospettiva teorica le implicazioni della discriminazione del prezzo in oligopoli spaziali. Nel capitolo 1 presentiamo una raccolta selettiva dei principali articoli riguardanti discriminazione del prezzo e differenziazione del prodotto nel modello di Hotelling. Nel capitolo 2 studiamo l’incentivo per le imprese a discriminare quando la differenziazione del prodotto è endogena. Due diverse versioni di un gioco a tre stadi sono considerate. Nella prima versione, le imprese prima scelgono quale varietà produrre, poi scelgono se discriminare o non discriminare, e infine fissano i prezzi. Emerge un Dilemma del Prigioniero: le imprese discriminano e i profitti sono inferiori di quelli che sarebbero emersi in caso di prezzo uniforme. Nella seconda versione del gioco i primi due stadi sono invertiti: in questo caso, in equilibrio nessuna impresa discrimina e non c’è Dilemma del Prigioniero. Nel capitolo 3 studiamo la relazione tra sostenibilità della collusione e differenziazione del prodotto quando le imprese possono discriminare. Analizziamo tre schemi collusivi: collusione sui prezzi discriminatori, collusione su un prezzo uniforme, collusione per non discriminare. Otteniamo che la sostenibilità del primo e del terzo schema non dipende dalla differenziazione del prodotto, mentre la sostenibilità del secondo schema dipende negativamente della differenziazione del prodotto.This thesis studies from a theoretical point of view the implications of price discrimination in spatial oligopolies. In Chapter 1, we provide a selective survey of the main contributions regarding price discrimination and product differentiation in the Hotelling framework. In Chapter 2 we study the firms’ incentive to price discriminate when product differentiation is endogenous. Two different versions of a three-stage game are considered. In the first version, firms first choose which variety to produce, then choose whether to price discriminate or not, then set prices. A Prisoner Dilemma arises: firms price discriminate and profits are lower than under uniform pricing. In the second version of the game, the first two stages are reversed: in this case uniform pricing emerges in equilibrium and there is not Prisoner Dilemma. In Chapter 3, we study the relationship between product differentiation and collusion sustainability when firms may price discriminate. Three different collusive schemes are analyzed: collusion on discriminatory prices, collusion on a uniform price, and collusion not to discriminate. We obtain that the sustainability of the first and the third scheme does not depend on product differentiation, while the sustainability of the second scheme depends negatively on product differentiation

The transcription factors BEL1 and SPL are required for cytokinin and auxin signaling during ovule development in Arabidopsis

Hormones, such as auxin and cytokinin, are involved in the complex molecular network that regulates the coordinated development of plant organs. Genes controlling ovule patterning have been identified and studied in detail; however, the roles of auxin and cytokinin in ovule development are largely unknown. Here we show that key cytokinin pathway genes, such as isopentenyltransferase and cytokinin receptors, are expressed during ovule development. Also, in a cre1-12 ahk2-2 ahk3-3 triple mutant with severely reduced cytokinin perception, expression of the auxin efflux facilitator PIN-FORMED 1 (PIN1) was severely reduced. In sporocyteless/nozzle (spl/nzz) mutants, which show a similar phenotype to the cre1-12 ahk2-2 ahk3-3 triple mutant, PIN1 expression is also reduced. Treatment with the exogenous cytokinin N-6-benzylaminopurine also altered both auxin distribution and patterning of the ovule; this process required the homeodomain transcription factor BELL1 (BEL1). Thus, this article shows that cytokinin regulates ovule development through the regulation of PIN1. Furthermore, the transcription factors BEL1 and SPL/NZZ, previously described as key regulators of ovule development, are needed for the auxin and cytokinin signaling pathways for the correct patterning of the ovule

On the determinants of the degree of openness of Open Source firms: An entry model

This paper examines the relationship between the degree of openness that software start-ups choose and some of the main industrial features faced by new entrants. Hypotheses derived from a formal model are tested through the implementation of econometric techniques and information provided by a novel database (ELISS). Theoretical predictions and empirical results indicate that the choice by start-ups of the degree of openness is negatively influenced by the sensitivity of consumers to price and is positively related both to the strength of network externalities their products exhibit and to the competitive advantage of the incumbent.open-source software; network effects; entry