FOREIGN MONOPOLIES AND TARIFF AGREEMENTS UNDER INTEGRATED MARKETS

In this paper the optimal policy and the stability of a tariff agreement among the importers of a monopolized good that is sold in an integrated market are studied. To analyze the stability, the tariff agreement formation is modelled as a two-stage game. In the first stage each importer decides whether or not to sign the agreement and in the second stage the signatories and non-signatories choose their tariff whereas the monopoly chooses the quantity or the price. The findings show that the optimal policy of the importers depends on which strategic variable is selected by the monopolist but that, on the contrary, this decision has no effects on the level of cooperation that can be reached by a self-enforcing tariff agreement that, in any case, is very low.foreign monopolies, self-enforcing tariff agreements, integrated markets, rent-shifting hypothesis, prices versus quantities

- DUOPOLY PRICE COMMUNICATION

We investigate the role of price communication in imperfect information environments by setting up a dynamic differentiated duopoly where actions are not observable and where firms decide, before pricing, whether to communicate their choices to the rivals. When firms play simultaneously in the pricing stages, communication across them is a dominant strategy allowing firms to coordinate prices, thus reducing competition. However, when communication takes place within pricing stages, this meaning that firms are given the opportunity to choose roles, the above firms coordination in prices is mitigated. This is because of the existence of a second mover advantage effect. Communication by the leader acts as a pre-commitment device to a price umbrella that the follower will undercut. As a result, we end up with a more competitive situation although price levels will not go down to those without communication.commitment, price communication

A note about effort, wages and unemployment

The purpose of this paper is to observe that in a principal agent-model with performance contracts, may exist involuntary unemployment as a consequence of the incentive wage system used by the firm. We show that, in a context of identical firms, the firm that pays more gets a higher level of profits per worker. Also, the reward received for identical workers are different depending on the wage contract stipulated for alternative firms. El propósito de este trabajo es demostrar que en un modelo de principal-agente, con contratos salariales endógenos, el desempleo involuntario aparece como consecuencia del sistema de incentivación salarial utilizado por la empresa. Se demuestra que, para empresas idénticas, la empresa que paga un salario mayor obtiene un nivel de beneficios por trabajador más elevado. Igualmente se comprueba que trabajadores idénticos consiguen ingresos diferentes dependiendo del tipo de contrato estipulado por la empresa.Incentivos, salarios de eficiencia, principal-agente Incentives, efficiency-wages, principal agent

DUOPOLY EXPERIMENTATION: COURNOT AND BERTRAND COMPETITION

This paper analyzes how leaming behaviour can modify the outcome of competition in an industry facing demand uncertainty. We consider a duopoly game where firms have imperfect information about market demand and leam through observing prices (Coumot competition) or sales (Bertrand) . The main body of the paper consists in showing how duopoly experimentation is affected by the type of market competition. We find that, if the goods are substitutes, firms will experiment more under Bertrand than under Coumot. If the goods are complements, the result is reversed. Furthermore, there is less experimentation under Coumot with product substitution.

Foreign monopolies and tariff agreements under integrated markets

In this paper the optimal policy and the stability of a tariff agreement among the importers of a monopolized good that is sold in an integrated market are studied. To analyze the stability, the tariff agreement formation is modelled as a two-stage game. In the first stage each importer decides whether or not to sign the agreement and in the second stage the signatories and non-signatories choose their tariff whereas the monopoly chooses the quantity or the price. The findings show that the optimal policy of the importers depends on which strategic variable is selected by the monopolist but that, on the contrary, this decision has no effects on the level of cooperation that can be reached by a self-enforcing tariff agreement that, in any case, is very low

Duopoly price communication

We investigate the role of price communication in imperfect information environments by setting up a dynamic differentiated duopoly where actions are not observable and where firms decide, before pricing, whether to communicate their choices to the rivals. When firms play simultaneously in the pricing stages, communication across them is a dominant strategy allowing firms to coordinate prices, thus reducing competition. However, when communication takes place within pricing stages, this meaning that firms are given the opportunity to choose roles, the above firms coordination in prices is mitigated. This is because of the existence of a second mover advantage effect. Communication by the leader acts as a pre-commitment device to a price umbrella that the follower will undercut. As a result, we end up with a more competitive situation although price levels will not go down to those without communication