Exclusivity as Inefficient Insurance

It is well established that an incumbent firm may use exclusivity contracts so as to monopolize an industry or deter entry. Such an anticompetitive practice could be tolerated if it were associated with sufficiently large efficiency gains, e.g. insuring buyers against price volatility. In this paper we study the trade-off between positive effects (risk sharing) and negative effects (exclusion) of exclusivity contracts. We revisit the seminal model of Aghion and Bolton (1987) under risk-aversion and show that although exclusivity contracts induce optimal risk-sharing, they can be used not only to deter the entry of a more efficient rival on the product market but also to crowd out financial investors willing to insure the buyer at competitive rates. We further show that in a world without financial investors, purely financial bilateral instruments, such as forward contracts, achieve optimal risk sharing without distorting product market outcomes. Thus, there is no room for an insurance defense of exclusivity contracts.exclusivity;contracts;monopolization;risk-aversion;risk-sharing;damages

Exclusion Through Speculation

Many commodities are traded on both a spot market and a derivative market. We show that an incumbent producer may use financial derivatives to extract rent from a potential entrant. The incumbent can indeed sell insurance to a large buyer to commit himself to compete aggressively in the spot market and drive the price down for the entrant. It can do so by selling derivatives for more than his expected production level, i.e. by taking a speculative position. This comes at the cost of inefficiently deterring entry.exclusion;monopolization;contracts;financial contracts;derivatives;risk aversion;speculation

The impact of a network split on cascading failure processes

Cascading failure models are typically used to capture the phenomenon where failures possibly trigger further failures in succession, causing knock-on effects. In many networks this ultimately leads to a disintegrated network where the failure propagation continues independently across the various components. In order to gain insight in the impact of network splitting on cascading failure processes, we extend a well-established cascading failure model for which the number of failures obeys a power-law distribution. We assume that a single line failure immediately splits the network in two components, and examine its effect on the power-law exponent. The results provide valuable qualitative insights that are crucial first steps towards understanding more complex network splitting scenarios

A proposed group management scheme for XTP multicast

The purpose of a group management scheme is to enable its associated transfer layer protocol to be responsive to user determined reliability requirements for multicasting. Group management (GM) must assist the client process in coordinating multicast group membership, allow the user to express the subset of the multicast group that a particular multicast distribution must reach in order to be successful (reliable), and provide the transfer layer protocol with the group membership information necessary to guarantee delivery to this subset. GM provides services and mechanisms that respond to the need of the client process or process level management protocols to coordinate, modify, and determine attributes of the multicast group, especially membership. XTP GM provides a link between process groups and their multicast groups by maintaining a group membership database that identifies members in a name space understood by the underlying transfer layer protocol. Other attributes of the multicast group useful to both the client process and the data transfer protocol may be stored in the database. Examples include the relative dispersion, most recent update, and default delivery parameters of a group

Issues in designing transport layer multicast facilities

Multicasting denotes a facility in a communications system for providing efficient delivery from a message's source to some well-defined set of locations using a single logical address. While modem network hardware supports multidestination delivery, first generation Transport Layer protocols (e.g., the DoD Transmission Control Protocol (TCP) (15) and ISO TP-4 (41)) did not anticipate the changes over the past decade in underlying network hardware, transmission speeds, and communication patterns that have enabled and driven the interest in reliable multicast. Much recent research has focused on integrating the underlying hardware multicast capability with the reliable services of Transport Layer protocols. Here, we explore the communication issues surrounding the design of such a reliable multicast mechanism. Approaches and solutions from the literature are discussed, and four experimental Transport Layer protocols that incorporate reliable multicast are examined

A reliable multicast for XTP

Multicast services needed for current distributed applications on LAN's fall generally into one of three categories: datagram, semi-reliable, and reliable. Transport layer multicast datagrams represent unreliable service in which the transmitting context 'fires and forgets'. XTP executes these semantics when the MULTI and NOERR mode bits are both set. Distributing sensor data and other applications in which application-level error recovery strategies are appropriate benefit from the efficiency in multidestination delivery offered by datagram service. Semi-reliable service refers to multicasting in which the control algorithms of the transport layer--error, flow, and rate control--are used in transferring the multicast distribution to the set of receiving contexts, the multicast group. The multicast defined in XTP provides semi-reliable service. Since, under a semi-reliable service, joining a multicast group means listening on the group address and entails no coordination with other members, a semi-reliable facility can be used for communication between a client and a server group as well as true peer-to-peer group communication. Resource location in a LAN is an important application domain. The term 'semi-reliable' refers to the fact that group membership changes go undetected. No attempt is made to assess the current membership of the group at any time--before, during, or after--the data transfer

The multidriver: A reliable multicast service using the Xpress Transfer Protocol

A reliable multicast facility extends traditional point-to-point virtual circuit reliability to one-to-many communication. Such services can provide more efficient use of network resources, a powerful distributed name binding capability, and reduced latency in multidestination message delivery. These benefits will be especially valuable in real-time environments where reliable multicast can enable new applications and increase the availability and the reliability of data and services. We present a unique multicast service that exploits features in the next-generation, real-time transfer layer protocol, the Xpress Transfer Protocol (XTP). In its reliable mode, the service offers error, flow, and rate-controlled multidestination delivery of arbitrary-sized messages, with provision for the coordination of reliable reverse channels. Performance measurements on a single-segment Proteon ProNET-4 4 Mbps 802.5 token ring with heterogeneous nodes are discussed

Controlling skyrmion bubble confinement by dipolar interactions

Large skyrmion bubbles in confined geometries of various sizes and shapes are investigated, typically in the range of several micrometers. Two fundamentally different cases are studied to address the role of dipole-dipole interactions: (I) when there is no magnetic material present outside the small geometries and (II) when the geometries are embedded in films with a uniform magnetization. It is found that the preferential position of the skyrmion bubbles can be controlled by the geometrical shape, which turns out to be a stronger influence than local variations in material parameters. In addition, independent switching of the direction of the magnetization outside the small geometries can be used to further manipulate these preferential positions, in particular with respect to the edges. We show by numerical calculations that the observed interactions between the skyrmion bubbles and structure edge including the overall positioning of the bubbles are fully controlled by dipole-dipole interactions

GTA: Groupware task analysis Modeling complexity

The task analysis methods discussed in this presentation stem from Human-Computer Interaction (HCI) and Ethnography (as applied for the design of Computer Supported Cooperative Work CSCW), different disciplines that often are considered conflicting approaches when applied to the same design problems. Both approaches have their strength and weakness, and an integration of them does add value to the early stages of design of cooperation technology. In order to develop an integrated method for groupware task analysis (GTA) a conceptual framework is presented that allows a systematic perspective on complex work phenomena. The framework features a triple focus, considering (a) people, (b) work, and (c) the situation. Integrating various task-modeling approaches requires vehicles for making design information explicit, for which an object oriented formalism will be suggested. GTA consists of a method and framework that have been developed during practical design exercises. Examples from some of these cases will illustrate our approach