The Choice of Prices vs. Quantities under Uncertainty

This paper analyzes a duopoly model with stochastic demand in which firms first choose their strategy variable and compete afterwards. Contrary to the existing literature, we show that firms do not always choose a quantity which is the variable that induces a smaller degree of competition. The reason is that demand uncertainty and the degree of substitutability have countervailing effects on variable choice. Higher uncertainty favors prices, while closer substitutability favors quantities. Moreover, for intermediate values firms choose different strategy variables in equilibrium

The Choice of Prices vs. Quantities under Uncertainty

If duopolistic firms can choose their strategy variable, uncertainty about demand conditions and the degree of substitutability have countervailing effects on variable choice. High uncertainty favors prices, while close substitutability favors quantities. For intermediate values, a hybrid equilibrium exists.Competition, Strategy Variables, Demand Uncertainty

The Choice of Prices vs. Quantities under Uncertainty

This paper analyzes a duopoly model with stochastic demand in which firms first choose their strategy variable and compete afterwards. Contrary to the existing literature, we show that firms do not always choose a quantity which is the variable that induces a smaller degree of competition. The reason is that demand uncertainty and the degree of substitutability have countervailing effects on variable choice. Higher uncertainty favors prices, while closer substitutability favors quantities. Moreover, for intermediate values firms choose different strategy variables in equilibrium.Competition; Strategy Variables; Demand Uncertainty

Dynamic Duopoly with Inattentive Firms

This paper analyzes an infinite horizon dynamic duopoly with stochastic demand in which firms face costs of absorbing and processing information. Our main result is that the structure of dates at which firms choose to absorb information differ starkly between price and quantity competition. Firms synchronize their actions under price competition whereas they plan sequentially and in an alternating manner under quantity competition. The reason is that under quantity competition the planning firm reduces the uncertainty in the residual demand curve of the inattentive firm which renders planning less attractive for that firm. The opposite holds true under price competition.Inattentiveness, Price Competition, Quantity Competition, Synchronization

The Choice of Prices vs. Quantities under Uncertainty

This paper analyzes a duopoly model with stochastic demand in which firms first choose their strategy variable and compete afterwards. Contrary to the existing literature, we show that firms do not always choose a quantity which is the variable that induces a smaller degree of competition. The reason is that demand uncertainty and the degree of substitutability have countervailing effects on variable choice. Higher uncertainty favors prices, while closer substitutability favors quantities. Moreover, for intermediate values firms choose different strategy variables in equilibrium.competition; strategy variables; demand uncertainty

The Visible Hand: National Oil Companies, Oil Supply and the Ermergence of the Hotelling Rent

Using firm-level panel data, this paper exposes differences in the dynamic oil produc- tion regime between private and state-owned firms. I find that state-owned firms reduce the oil supply, ceteris paribus, by 3.5 percent each year, but private firms hold output constant. Furthermore, state-owned NEWLINE firms have not followed such stringent policy before 1997. My ex- tension of the Hotelling-model attributes the behavior of state-owned firms to a scarcity rent, whereas private firms produce at their constant capacity limit, owing to possible expropriation. The theory also indicates that state-owned firms will only switch to a Hotelling-regime after a certain lag time, attributable to NEWLINE limited capacity. The data further reveals that contractions in the supply of state-owned oil lead to oil price increases, indicating that state-owned firms do, in fact, generate a scarcity rent. My results therefore suggest that the shift from private towards state-owned oil dominance in the 1970s gave rise to a delayed increasing oil price path

Fission Decay Rates Determined from a Quantal Transport Equation

The decay of a metastable system is described by extending Kramers' method to the quantal regime. For temperatures above twice the crossover value we recover the result known from applying Euclidean path integrals to solvable models. Our derivation is not restricted to a linearly coupled heat bath of oscillators, and thus applicable to nuclear systems.Comment: 10 pages, Plain Tex, TU-Muenchen preprin

Evaluation of different sources of uncertainty in climate change impact research using a hydro-climatic model ensemble

The international research project QBic3 (Quebec-Bavarian Collaboration on Climate Change) aims at investigating the potential impacts of climate change on the hydrology of regional scale catchments in Southern Quebec (Canada) and Bavaria (Germany). Yet, the actual change in river runoff characteristics during the next 70 years is highly uncertain due to a multitude of uncertainty sources. The so-called hydro-climatic ensemble that is constructed to describe the uncertainties of this complex model chain consists of four different global climate models, downscaled by three different regional climate models, an exchangeable bias correction algorithm, a separate method to scale RCM outputs to the hydrological model scale and several hydrological models of differing complexity to assess the impact of different hydro model concepts. This choice of models and scenarios allows for the inter-comparison of the uncertainty ranges of climate and hydrological models, of the natural variability of the climate system as well as of the impact of scaling and correction of climate data on mean, high and low flow conditions. A methodology to display the relative importance of each source of uncertainty is proposed and results for past runoff and potential future changes are presented

Evaluation of the interactive multimedia business simulation SPACE (Simulating Project Auditing and Controlling Excellence)

This report presents the evaluation of the computer-based simulation SPACE – Simulating Project Auditing & Controlling Excellence – which is an interactive multiedia business simulation developed in partnership by Andersen Consulting and Siemens AG. The aims of SPACE are fostering self-directed learning and the acquisition of applicable knowledge in the economic domain regarding construction and solution projects of US GAAP. The evaluation was conducted in cooperation with the Institute of Educational Psychology at the Ludwig-Maximilians-University in Munich. The aim of the evaluation was to compare the effectiveness of SPACE with a traditional classroom instruction. Therefore, a problem-based transfer task was designed which assessed learning gains with respect to applicable knowledge in the following areas: (1) strategic knowledge and problem-solving skills, that means selection of appropriate information and strategies to solve a realistic business problem, (2) basic skills to calculate POC and (3) conceptual knowledge, i.e. an understanding of principles and interconnections of concepts in the domain. 38 students of business administration participated in the evaluation. 19 students learned eight hours with SPACE, the other 19 students received a traditional classroom instruction lasting also eight hours in the same subject area of US GAAP. Results show that SPACE was significantly better with regard to strategic knowledge and applying problem solving skills. In other words, the study showed that SPACE is superior to classroom instruction in this area of knowledge acquisition and application. In the other areas of basic skills to calculate POC and conceptional knowledge, differences were not significant between the classroom instruction and SPACE. When SPACE is employed under realistic conditions, i.e. in business, it can be assumed that SPACE is even more superior to classroom instruction.Das computerbasierte Lernprogramm SPACE (Simulating Project Auditing & Controlling Excellence), eine interaktive, multimediale Simulationssoftware, wurde von Anderson Consulting und der Siemens AG entwickelt. SPACE zielt auf die Förderung selbstgesteuerten Lernens und die Vermittlung anwendbaren Wissens. Das Simulationsprogramm behandelt inhaltlich die Kalkulation von Projektdaten auf Basis von US GAAP. Die hier berichtete Evaluationsstudie hatte zum Ziel, die Effektivität von SPACE im Vergleich zu einem traditionellen Klassenzimmerunterricht festzustellen. Mit einer problemorientierten Transferaufgabe wurden folgende Dimensionen erfasst: (1) Strategisches Wissen und Problemlösefertigkeiten (hierbei ging es um die Selektion relevanter Informationen und Strategien in Bezug auf eine realistische Problemstellung), (2) Basisfertigkeiten zur Berechnung von POC und (3) konzeptionelles Wissen im Sinne eines Verständnisses von Prinzipien und Zusammenhängen innerhalb des behandelten Inhaltsgebietes. An der Studie nahmen 38 Studenten der Betriebswirtschaftslehre teil. 19 Studenten lernten in einem Zeitraum von acht Stunden mit SPACE, die anderen 19 Teilnehmer nahmen an einem achtstündigen Klassenzimmerunterricht zum selben Inhaltsbereich teil. Hinsichtlich der Dimension "Strategiewissen und Problemlösefertigkeiten" schnitten diejenigen Studenten signifikant besser ab, die mit SPACE lernten. Das Simulationsprogramm zeigte sich somit in Bezug auf diese Dimension der Wissensanwendung dem traditionellen Klassenzimmerunterricht überlegen. In den Dimensionen "Berechnung von POC" und "Konzeptionelles Wissen" ergaben sich keine signifikanten Unterschiede zwischen den beiden Untersuchungsgruppen. Es ist anzunehmen, dass SPACE dem traditionellem Unterricht deutlicher überlegen ist, wenn das Lernprogramm unter realistischeren Bedingungen, d.h. in Betrieben, eingesetzt wird