does tourism influence economic growth a dynamic panel data approach on average tourism specialized countries grow more than others this is not consistent with the core of modern economic growth theory that suggests that economic growth is linked to sectors with high tech intensity and large scale in this article we use appropriate panel data methods to study the relationship between tourism and economic growth in general we show that tourism is a positive determinant of economic growth both in a broad sample of countries and in a sample of poor countries however contrary to previous contributions tourism is not more relevant in small countries than in a general sample this is a fully modified version of a working paper co authored by one of the authors

the relationship between the markets for health insurance and medical malpractice insurance this article evaluates the interdependence of medical malpractice insurance markets and health insurance markets prior research has addressed the performance of these markets individually without specifically quantifying the extent to which they are linked increasing levels of health insurance losses could increase the scale of potential malpractice claims boosting medical malpractice losses or could embody an improvement in medical care quality which will reduce malpractice losses our results for a state panel data set from 2002 to 2009 demonstrate that health insurance losses are negatively related to medical malpractice insurance losses an additional dollar of health insurance losses is associated with a 0 01 0 05 reduction in medical malpractice losses these findings have potentially important implications for assessments of the net cost of health insurance policies

us and german consumer preferences for ground beef packaged under a modified atmosphere different regulations different behaviour new technologies in food processing can provide advantages to consumers and producers but often the technologies are applied in different country specific regulatory climates modified atmosphere packaging extends the shelf life of fresh meat and with the inclusion of carbon monoxide stabilizes colour these packaging technologies can be used in the us and europe although a modified atmosphere package that includes carbon monoxide is allowed only in the us this study applies choice experiments to analyse preferences of us and german consumers towards the meat attributes enhanced by the packaging results show that longer shelf life is preferred in the us as long as the technology is understandable consumers in both countries have clear preferences for cherry red meat colour however providing information on the use of carbon monoxide in the packaging decreases us consumers willingness to pay and increases some german consumers willingness to pay

tipping and concentration in markets with indirect network effects this paper develops a framework for measuring tipping the increase in a firm s market share dominance caused by indirect network effects our measure compares the expected concentration in a market to the hypothetical expected concentration that would arise in the absence of indirect network effects in practice this measure requires a model that can predict the counterfactual market concentration under different parameter values capturing the strength of indirect network effects we build such a model for the case of dynamic standards competition in a market characterized by the classic hardware software paradigm to demonstrate its applicability we calibrate it using demand estimates and other data from the 32 64 bit generation of video game consoles a canonical example of standards competition with indirect network effects in our example we find that indirect network effects can lead to a strong economically significant increase in market concentration we also find important roles for beliefs on both the demand side as consumers tend to pick the product they expect to win the standards war and on the supply side as firms engage in penetration pricing to invest in growing their networks

competitive market structure analysis a reply szs base their discussion upon four categories of features that they contend a comprehensive method of market structure analysis should possess since we offer cmsa as a comprehensive behavioral approach for identifying competitive market structures we also offer our interpretations of what comprehensive and ideal comprehensive behavioral approaches ought to encompass in addition we discuss briefly the important differences between perceptual and behavloral approaches because we perceive a portion of szs s criticisms of cmsa not as problems but as characteristics of behavioral approaches in general since behavioral and perceptual approaches ought to be used as complements and not as substitutes their distinct roles must be recognized revealed market structure vs potential market structure

standardization and variety abstract in the tradeoff between standardization and variety there can be too much or too little variety the latter possibility can only happen if there are several equilibria

competition and the number of firms in a market are duopolies more competitive than atomistic markets this paper uses a variant of the standard search model to examine market equilibrium and the consequences for market equilibrium of an increase in the number of firms if marginal search costs increase with the number of searches then the demand curve facing any firm will be kinked with the elasticity of demand with respect to price decreases being less than with respect to price increases prices may not change in response to changes in marginal costs as the number of firms increases the maximum price that is consistent with equilibrium increases to the monopoly price but the minimum price decreases on the other hand if marginal search costs decrease with the number of searches equilibrium if it exists is characterized by a

do doctors practice defensive medicine defensive medicine is a potentially serious social problem if fear of liability drives health care providers to administer treatments that do not have worthwhile medical benefits then the current liability system may generate inefficiencies much larger than the costs of compensating malpractice claimants to obtain direct empirical evidence on this question we analyze the effects of malpractice liability reforms using data on all elderly medicare beneficiaries treated for serious heart disease in 1984 1987 and 1990 we find that malpractice reforms that directly reduce provider liability pressure lead to reductions of 5 to 9 percent in medical expenditures without substantial effects on mortality or medical complications we conclude that liability reforms can reduce defensive medical practices

vertical integration market foreclosure and consumer welfare in the cable television industry i examine the effects of vertical integration between programming and distribution in the cable television industry i assess the effects of ownership structure on program offerings prices and subscriptions and i compare consumer welfare across integrated and unintegrated markets the results of this analysis suggest two general conclusions first integrated operators tend to exclude rival program services suggesting that certain program services cannot gain access to the distribution networks of vertically integrated cable system operators second vertical integration does not harm and may actually benefit consumers because of the associated efficiency gains

installed base and compatibility innovation product preannouncements and predation a good is often more valuable to any user the more others use compatible goods the authors show that this effect may inhibit innovation if an installed base exists and transition to a new standard must be gradual early adopters bear a disproportionate share of transient incompatibility costs this can produce excess inertia the installed base however is stranded if the new standard is adopted this may create excess momentum these dynamic effects have strategic implications temporary price cutting can permanently prevent entry and product preannouncements can be critical in innovation these strategic actions have ambiguous welfare effects

piracy on the internet accommodate it or fight it a dynamic approach abstract this paper uses a dynamic stochastic model to solve for the optimal pricing policy of music recordings in the presence of p2p file sharing networks eroding their sales we employ a policy iteration algorithm on a discretized state space to numerically compute the optimal pricing policy the realistically calibrated model reflects the real world figures we observe and provides estimates of the optimal pricing policy as well as comparative statics figures the pricing policy is such that for a given p2p network size prices are increasing in the number of buyers of the product and for a given number of buyers of the product prices are non monotonic in the p2p network size surprisingly in the presence of p2p networks increases in production costs and decreases in the valuation of the product increase the consumer and total surplus a higher valuation of the product leads to a lower steady state price increased switching costs have a negative effect on prices and profits so the long term incentive to attract new consumers dominates the short term incentive to harvest loyal consumers the full enforcement of intellectual property rights has adverse effect on both consumer surplus and total welfare

consumers willingness to pay for the color of salmon a choice experiment with real economic incentives in most retail markets sellers post the price and consumers choose which products to buy we designed an experimental market with posted prices to investigate consumers willingness to pay for the color of salmon salmon fillets varying in color and price were displayed in twenty choice scenarios in each scenario the participants chose which of two salmon fillets they wanted to buy to induce real economic incentives each participant drew one binding scenario the participants then had to buy the salmon fillet they had chosen in their binding scenario the choice data were analyzed with a mixed logit model

vertical integration in the u s pulp and paper industry 1900 1940 a transaction cost model of vertical integration is tested based on detailed descriptions of every pulp and paper mill operating in the united states between 1900 and 1940 this study contributes to the literature on integration through the use of a large disaggregated database that allows identification of individual mills over time vertical integration of pulp and paper production is found to be positively associated with regional concentration paper mill capacity and production of standardized grades of paper over time new entrants behaved differently than established mills because few mills switched between integration and specialization once established copyright 1994 by mit press

note extending the rotterdam model to test hierarchical market structures two issues that have implications across a firm s marketing activities are the estimation of the market response functions and the determination of the structure of the market in which its products compete in a recent paper clements and selvanathan clements k w e a selvanathan 1988 the rotterdam demand model and its application to marketing marketing sci 7winter 60 75 describe how the rotterdam demand system can be used to study these two issues in a joint framework in this note we extend their model to test hierarchical market structures using data at the brand form level we also incorporate idiosyncratic response coefficients that capture the effects of advertising and or other nonprice marketing mix variables separate from the effects of a price change these extensions provide additional insights into the nature and extent of competition among brands within a product class

the price effects of spatial competition a recent paper by capozza and van order cvo 1977 proposed a generalization of the greenhut hwang ohta gho 1975 analysis of pricing under three alternative types of spatial competition the gho analysis was based on a short run model in which the locations of firms are assumed to be fixed cvo accordingly proposed relaxation of this rigid assumption to examine if the gho results also apply to the long run zero profit industry equilibrium they confirmed the gho results which however they also contended require certain particular modifications as well in the light of their own models the cvo contribution lies in their simple model analysis of long run industry equilibrium conditions a generalization of the gho analysis however they failed to recognize that the gho analysis is based on another restrictive assumption regarding the form of the demand function moreover they assumed even more restrictive demand conditions and misled themselves to a conclusion that l6schian competition never results in a lower price than spatial monopoly their conclusion is invalid since loschian competition can be shown to result in a lower not higher mill price if only the demand function is assumed to be sufficiently convex to the origin ohta 1980 this calls for a more general examination of conditions under which the firm s f o b mill price may rise or fall due to spatial entry of rival firms the present paper presents selected results of such examination section 2 briefly reviews the theory of spatial monopoly initially some fundamental assumptions are set forth this is followed by derivation of the market demand function for the spatial monopolist the market demand in turn is shown to be more or less elastic than the assumed basic demand function depending on the curvature of the latter curve we also comment on the so called paradox of spatial monopoly which we claim is a misnomer the analytical framework of section 2 is employed in section 3 as we generalize previous analyses and present a concise cataloguing of comparative static results of spatial competition 1 again the basic demand characteristics in combination with alternative types of spatial competition are shown to play an important role in yielding the distinct elasticity results and for that matter competitive equilibrium prices in the process a counter example to cvo s aforementioned argument on l6schian pricing is presented also discussed is the conceptual distinction between perceived and realized elasticities of demand under spatial competition which cvo also failed to recognize as a result they erred in speculating that equilibrium mill prices would be the same under alternative types of spatial competition given the size of the market area we will show that they in fact are not section 4 concludes the paper by summarizing the basic results of our analysis

network effects software provision and standardization in this paper we examine the software provision decision of software firms the provision decision by software firms determines the value and hence the market share of competing hardware technologies we show how the provision decision by software firms determines whether multiple hardware technologies are supported in equilibrium or whether there is de facto standardization with only one hardware technology supplied with software in equilibrium we show that when consumers place a high value on software variety there is a suboptimal amount of standardization by the market

dynamic competition with network externalities why history matters we consider dynamic competition among platforms in a market with network exter nalities a platform that dominated the market in the previous period becomes focal in the current period in that agents play the equilibrium in which they adopt the focal platform whenever such equilibrium exists yet when faced with higher quality competition can a low quality platform remain focal in the finite horizon case the unique equilibrium is efficient for patient platforms with an infinite time horizon however there are multiple equilibria where either the lowor high quality platform dominates if qualities are stochastic the platform with a better average quality wins with a higher probability even when its realized quality is lower and this probability increases as platforms become more patient hence social welfare may decline as platforms become more forward looking

a microeconometric model of the demand for health care and health insurance in australia this paper develops a model for interdependent demand for health insurance and health care under uncertainty to throw light on the issue of insurance induced distortions in the demand for health care services the model is used to empirically analyse the determinants of the choice of health insurance type and seven types of health care services using micro level data from the 1977 78 australian health survey econometric implementation of the model involves simultaneously issues of discreteness of choice selectivity and stochastic dependence between health insurance and utilization health status appears to be more important in determining health care service use than health insurance choice while income appears to be more important in determining health insurance choice than in determining health care service use for a broad range of health care services both moral hazard and self selection are found to be important determinants of utilization of health care services

adoptions and orphans in the early microcomputer market in this paper we examine the development of the microcomputer market in the early 1980s cp m a widely adopted operating system was orphaned by the user and the development communities a new operating system dos and a new hardware platform the ibm pc became the predominant industry standard we examine the statistical relationship between data that reflects hardware and software sales for the competing platforms we conclude that the economic processes underlying the development of dos differed from those underlying cp m and that many of these differences related to the role of software development

standardization in decentralized economies this paper presents a dynamic model inspired by evolutionary game theory of how standards and norms emerge in decentralized economies it shows that standardization outcomes depend on adopters attitudes to problems caused by incompatibility if individuals display aversion to incompatibility standardization never fails to happen eventually but societies sometimes end up picking inferior standards in this case official action can be useful to quickly achieve sensible standardization on the other hand when individuals display tolerance or neutrality to incompatibility there is neither path dependency nor a lock in problem and regulation seems a poor alternative to laissez faire

entry in monopoly market this paper develops new empirical models of market concentration from game theoretic models of entry we construct our models from inequality conditions that describe entrants equilibrium strategies in simultaneous move and sequential move games and use them to study the effects of entry in isolated monopoly markets for new automobiles from estimates of the market size necessary to support one and two dealers we conclude that monopoly dealers do not block the entry of a second dealer we also find that entry does not cause price cost margins to fall by much

competitive market structure analysis a comment on problems d etermination of market definition and structure are topics which have sparked considerable interest among marketing analysts in recent years resulting in numerous methodological approaches designed to aid managers in developing a better understanding of the markets their products serve or hope to serve see day shocker and srivastava 1979 urban and hauser 1980 and bourgeois haines and sommers 1981 for descriptions of such methods and for excellent literature summaries and critiques this proliferation of interest has at least two distinct interpretations that the area is an important one influencing decisions of considerable strategic and tactical consequence to the firm and that no one has yet evolved a totally satisfactory approach to these problems day et al 1979 concluded that market definition is inevitably arbitrary and that methods for defining markets should consequently be much affected by the managerial purposes they are designed to serve much of the work which has followed has made useful progress and has become increasingly sophisticated in handling the vagaries involved in the related problems of determining both market definition and market structure nevertheless published approaches to determining market structure have generally attacked only pieces of the problem each has exhibited certain weaknesses that researchers continue to find exceedingly difficult to eliminate in particular we contend that a comprehensive method of market structure analysis is one which possesses at a minimum 1 a means for specifying the appropriate set of products for analysis or alternatively for producing consistent results regardless of the set of products employed for example if powdered drink mixes were added to the set of soft drink products there would already be a universal or global structure to the market each particular subset of products should produce a unique structure the structure of a market i e the relationships among any subset of existing products at a given time should not be altered by the addition of other products since the representation is supposedly descriptive addition of unique products over time may of course alter future market structures

intraconnectivity and interconnectivity when value creation may reduce profits this paper analyses firms decisions to provide connectivity to their customers we distinguish between intraconnectivity the ability of one firm s customers to connect to each other and interconnectivity the ability of one firm s customers to connect with another firm s customers the profitability implications of allowing connectivity are not a straightforward consequence of the consumer value of connectivity because connectivity affects not only the customer value but also the intensity of competition by creating or changing network externality we find that if sales are driven by brand switching rather than by category expansion a firm may find it optimal not to provide intraconnectivity even if providing it is not costly and may find it optimal to provide interconnectivity even at a cost exceeding the consumer value of connectivity on the other hand if category expansion is possible providing intraconnectivity may be profitable in this case either the equilibrium intraconnectivity provision may be asymmetric or both firms may find it individually optimal to provide intraconnectivity under certain conditions in the latter case the firms choice of intraconnectivity is a prisoner s dilemma game

avoiding market dominance product compatibility in markets with network effects as is well recognized market dominance is a typical outcome in markets with network effects a firm with a larger installed base offers a more attractive product which induces more consumers to buy its product which produces a yet bigger installed base advantage such a setting is investigated here but with the main difference that firms have the option of making their products compatible when firms have similar installed bases they make their products compatible in order to expand the market nevertheless random forces could result in one firm having a bigger installed base in which case the larger firm may make its product incompatible we find that strategic pricing tends to prevent the installed base differential from expanding to the point that incompatibility occurs this pricing dynamic is able to neutralize increasing returns and avoid the emergence of market dominance

bandwagon effects and long run technology choice abstract we introduce a class of bandwagon games which generalizes the notion of network externalities when there are more than two competing technologies and various degrees of partial compatibilities among them we then apply the stochastic evolutionary approach to this class of games we determine the conditions under which a globally pairwise risk dominant technology is the long run equilibrium lre we also show the conditions under which one technology takes over another technology by directly switching consumers from the latter to the former also called direct domination parametric examples illustrate the properties of the technology which is the lre journal of economic literature classification numbers c72 c73

network effects aftermarkets and the coase conjecture a dynamic markovian approach this paper investigates the expansion of the network of a monopolist firm that produces a durable good and is also involved in the corresponding aftermarket we characterize the markov perfect equilibrium of the continuous time dynamic game played by the monopolist and the forward looking consumers under the assumption that consumers benefit from the subsequent expansion of the network the paper contributes to the theoretical discussion on the validity of the coase conjecture analyzing whether coase s prediction that the monopolist serves the market in a twinkling of an eye remains valid in our setup we conclude that the equilibrium network development may actually be gradual contradicting coase s conjecture we find that a necessary condition for such a result is the existence of aftermarket network effects that accrue at least partly to the monopolist firm

equilibrium with product differentiation tive consumer formulations is used to examine the properties of single and multiple price equilibria conditions under which decreases in the intensity of consumer preferences reduce price are given it is shown that with certain types of demand curves entry can eliminate price cost markups even given product differentiation if competition is localized it is demonstrated that entry does not affect the markup finally the effect of spurious product differentiation on price is examined

price increasing competition in a discrete choice model of product differentiation the symmetric duopoly price may be lower than equal to or higher than the single product monopoly price whereas the market share effect encourages a duopolist to charge less than the monopoly price because a duopolist serves fewer consumers the price sensitivity effect motivates a higher price when more consumer choice steepens the firm s demand curve the joint distribution of consumer values for the two conceivable products determines the relative strength of these effects the analysis provides precise conditions for price increasing competition and reveals that it is unexceptional from a theoretical perspective

free entry and social inefficiency our goal is to provide a simple yet general exposition of the conditions under which the number of entrants in a free entry equilibrium is excessive insufficient or optimal our analysis compares the number of firms that enter a market when there is free entry with the number that would be desired by a social planner who is unable to control the behavior of firms once they are in the market that is we consider the second best problem of choosing the welfare maximizing number of firms while we take as given their noncompetitive behavior after entry we demonstrate that the crucial conditions for establishing the presence of an entry bias can be stated quite simply in terms of the outcome of the postentry game played by entrants in contrast to previous work we do not need to model this postentry game explicitly

strategic bidding by potential competitors will monopoly persist who will win the bidding to become the sole producer of a new product the monopolist of a related product or a new entrant when there exists potential entry to the monopolist s existing business the standard result that monopoly persists gilbert and newbery preemptive patenting and the persistence of monopoly american economic review 72 pp 514 526 1982 may or may not hold depending crucially on how the new product relates to the existing product of the monopolist the monopolist tends to win the bidding and to dominate both products if the two products are strategic complements and the entrant tends to win the bidding if the two products are strategic substitutes

moral hazard and the demand for health services a matching estimator approach we estimate the impact of extra health insurance coverage beyond a national health system on the demand for several health services traditionally the literature has tried to deal with the endogeneity of the private extra insurance decision by finding instrumental variables since a priori instrumental variables are hard to find we take a different approach we focus on the most common health insurance plan in portugal adse which is given to all civil servants and their dependents we argue that this insurance is exogenous i e not correlated with the beneficiaries health status this identifying assumption allows us to estimate the impact of having adse coverage on the demand for three different health services using a matching estimator technique the health services used are number of visits number of blood and urine tests and the probability of visiting a dentist results show large positive effects of adse coverage for number of visits and tests among the young 18 30 years old but only the latter is statistically significantly different from zero the effects represent 21 8 and 30 of the average number of visits and tests for the young on the contrary we find no evidence of moral hazard on the probability of visiting a dentist

a generalized model of horizontal product differentiation a famous result in the literature on horizontal product differentiation is due to c d aspremont j j gabszewicz and j f thisse 1979 they show that in a slightly modified hotelling model profit maximizing firms choose maximum instead of minimum differentiation the aim of this paper is to show that the result of maximum differentiation is not robust the author provides provide an example for a wide class of markets where firms will choose interior solutions if consumers have an outside option for their use of money copyright 1994 by blackwell publishing ltd

malpractice law and health care reform optimal liability policy in an era of managed care abstract because fee for service health insurance insulates providers from the costs of treatment decisions it may lead to defensive medicine precautionary treatment with minimal expected medical benefit administered out of fear of legal liability by giving providers higher powered incentives managed care may affect optimal liability policy among elderly medicare beneficiaries with heart disease in 1984 1994 we find that liability reducing tort reforms reduce defensive practices in areas with high and low managed care enrollment but that managed care and liability reform are substitutes we consider some implications of these results for the current debate over the appropriateness of extending malpractice liability to managed care organizations

technology adoption in the presence of network externalities we analyze technology adoption in industries where network externalities are significant the pattern of adoption depends on whether technologies are sponsored a sponsor is an entity that has property rights to the technology and hence is willing to make investments to promote it key findings include the following 1 compatibility tends to be undersupplied by the market but excessive standardization can occur 2 in the absence of sponsors the technology superior today has a strategic advantage and is likely to dominate the market 3 when one of two rival technologies is sponsored that technology has a strategic advantage and may be adopted even if it is inferior 4 when two competing technologies both are sponsored the technology that will be superior tomorrow has a strategic advantage

testing competitive market structures an accurate understanding of the structure of competition is important in the formulation of many marketing strategies for example in new product launch product reformulation or positioning decisions the strategist wants to know which of his competitors will be most affected and hence most likely to respond many marketing science models have been proposed to identify market structure in this paper we examine the managerial problem and propose a criterion by which to judge an identified market structure basically our criterion is a quantification of the intuitive managerial criterion that a submarket is a useful conceptualization if it identifies which products are most likely to be affected by our marketing strategies we formalize this criterion within the structure of classical hypothesis testing so that a marketing scientist can use statistical statements to evaluate a market structure identified by 1 behavioral hypotheses 2 managerial intuition or 3 market structure identification algorithms mathematically our criterion is based on probabilities of switching to products in the situation where an individual s most preferred product is not available submarkets are said to exist when consumers are statistically more likely to buy again in that submarket than would be predicted based on an aggregate constant ratio model for example product attributes e g brand form size use situations e g coffee in the morning versus coffee at dinner and user characteristics e g heavy versus light users are specified as hypotheses for testing alternate competitive structures measurement and estimation procedures are described and a convergent approach is illustrated an application of the methodology to the coffee market is presented and managerial implications of six other applications are described briefly

did installed base give an incumbent any measurable advantages in federal computer procurement this research examines the relative strength and significance of the status of incumbent contractor in federal computer procurement one finding as expected is that an agency is likely to acquire a system from an incumbent vendor another finding perhaps more interesting is that the in compatibility between a buyer s installed base and a potential system also influences the vendor choice a result that may be the first econometric measurement of the competitive effects of incompatibility an illustration of this thesis comes from ibm s experience new evidence shows however that ibm s apparent disadvantage with government agencies is largely due to incompatibilities in ibm s product line

snowball a dynamic oligopoly model with indirect network effects abstract allowing for innovation dynamics in the software market this paper studies the conditions under which standardization in the hardware market arises and persists over time in the model software firms repeatedly invest in quality upgrades compete in the product market and make exit as well as entry decisions the results show that in general excess inertia does not occur a platform becomes the standard in a market only if it is better than the competing platforms furthermore low overall rates of innovation always lead to variety conversely the higher the speed of innovation the more likely standardization is

competitive market structure analysis principal partitioning of revealed substitutabilities in this paper competitive market structure analysis cmsa is introduced the approach is based on a behavioral model of revealed consumer substitution and utilizes principal component analysis of revealed substitutabilities to identify groups of competing brands or products in a market the proposed partitioning criterion the index of revealed substitutability irs yields estimates of the degrees of competition between all pairs of items in a market through use of household interpurchase times the proposed partitioning methodology principal partitioning pp identifies groups of competing items through the use of principal component analysis of irs values through combination of the partitioning criterion measure and methodology competitive market structures are analytically identified

dynamic price competition with network effects i consider a dynamic model of competition between two proprietary networks consumers die and are replaced with a constant hazard rate and firms compete for new consumers to join their network by offering network entry prices i derive a series of results pertaining to a existence and uniqueness of symmetric equilibria b monotonicity of the pricing function e g larger networks set higher prices c network size dynamics increasing dominance vs reversion to the mean and d firm value how it varies with network effects finally i apply my general framework to the study of termination charges in wireless telecommunications i consider various forms of regulation and examine their impact on firm profits and market share dynamics

health insurance the tradeoff between risk pooling and moral hazard choosing optimal health insurance coverage involves a trade off between the gain from risk reduction and the deadweight loss from moral hazard this paper examines this trade off empirically by estimating both the demand for health insurance and the demand for health services it relies on data from a randomized controlled trial of cost sharing s effects on the use of health services and on the health status for a general non elderly population

market power vertical integration and the wholesale price of gasoline this paper examines empirically the relationship between vertical integration and wholesale gasoline prices we use discrete and differential changes in the extent of vertical integration generated by mergers in west coast gasoline refining and retailing markets to test for incentives to raise rivals costs the research design allows us to test for a relationship between vertical integration and wholesale prices controlling for horizontal market structure cost shocks and trends we find evidence consistent with the strategic incentive to raise competitors input costs this suggests that vertical integration can have a significant impact on wholesale prices

value elicitation in retail and laboratory environments abstract an increasing number of studies have begun conducting economic experiments in field rather than laboratory settings we directly compare results from laboratory and field valuation experiments after controlling for unengaged bidders results indicate field valuations were greater than laboratory valuations results are discussed in the context of recent literature on commitment costs

technological competition and the structure of the computer industry we examine thirty years of computer industry market structure our analysis explains the persistence of dominant computer firms their recent decline and the changing success of competitive entry it emphasizes the importance of technological competition between computer platforms not firms this aspect of competition has changed little over time two things did change young platforms serving newly founded segments eventually challenged established platforms across segment boundaries through a process of indirect entry vertically disintegrated platforms have led to divided technical leadership in important segments the result is an industry with far more technological competition

a competitive perspective on internet explorer microsoft s internet explorer je technologies are included in windows at no separate charge versions 1 and 2 of ie functioned as add on features in windows 95 they were not tightly integrated into windows and did not make applications programming interfaces available to other software over time ie became increasingly integrated into windows sharing code with other windows features and supplying processing services to other operatingsystem components and to software applications in addition to distribution as part of windows microsoft has routinely offered free ie distribution and upgrades through other channels microsoft has also compensated internet access providers iap s and internet content providers icp s for their efforts to promote the use and distribution of ie despite ie s no revenue track record and assurances of free availability in the future microsoft spends large sums developing and promoting ie one interpretation of these and other facts holds that microsoft unlawfully tied the browsing functionality of ie to windows 95 and 98 for anticompetitive purposes this view rests on the premise that a non microsoft web browser could evolve into a substitute for windows or promote potential substitutes of course the emergence of a substitute would erode the profitability of windows hence according to this view microsoft sought to preclude or forestall the emergence of alternative software platforms by tying its own web browser to windows and by entering into promotional agreements that raise costs for rival web browsers as an alternative to this view we offer a pro competitive perspective on microsoft s behavior with respect to ie our perspective resonates with several other aspects of microsoft s behavior as well it also carries important implications for the connection between market structure and consumer welfare

effects of label information on consumer willingness to pay for food attributes choice experiments ces are often used to elicit consumer willingness to pay wtp for food attributes a concern about these approaches is that food attributes provided to respondents are assumed independent of attributes not provided we use surveys containing a series of ces to investigate effects of adding beef steak attributes wtp for important attributes in the ces decrease when the number of attributes increases from three to four while wtp increases when the number of attributes increases from four to five changes in wtp for attributes depend on their relationships with newly added attributes and the number of attributes presented copyright 2007 oxford university press

aggregation and imperfect competition on the existence of equilibrium we present a new approach to the theory of imperfect competition and apply it to study price competition among differentiated products the central result provides general conditions under which there exists a pure strategy price equilibrium for any number of firms producing any set of products this includes products with multi dimen sional attributes in addition to the proof of existence we provide conditions for uniqueness our analysis covers location models the characteristics approach and probabilistic choice together in a unified framework to prove existence we employ aggregation theorems due to prekopa 1971 and borell 1975 our companion paper caplin and nalebuff 1991 introduces these theorems and develops the application to super majority voting rules we present a new approach to the theory of imperfect competition and apply it to study price competition among differentiated products the central result is that there exists a pure strategy price equilibrium for any number of firms producing any set of products in addition to the proof of existence we provide conditions for uniqueness our model both unites diverse strands of the earlier literature and opens up uncharted areas for future analysis in particular we expand the traditional one dimensional framework to allow for multi dimen sional product differentiation our approach involves twin restrictions on consumer preferences one on individuals preferences the other on the distribution of preferences across society these are generalizations of the restrictions supporting 64 majority rule presented in caplin and nalebuff 1988 to prove existence we apply a new technique of aggregation this technique is valuable in a variety of other problems in the companion paper we use the aggregation result to generalize our earlier work on 64 majority rule and to characterize the relationship between the distribution of human capital and the distribution of income caplin and nalebuff 1991 there are additional applications in statistics and in search theory we begin with a brief review of the early literature on imperfect competition describing in more detail the existence problem and previous solutions section 3 presents our twin assumptions and shows that they cover many standard cases in section 4 we introduce the aggregation theorem and use it in the analysis of demand functions the proof of existence of equilibrium is in section

should we stop meating like this reducing meat consumption through substitution high levels of meat consumption are increasingly being criticised for ethical environmental and social reasons plant based meat substitutes have been identified as healthy sources of protein that in comparison to meat offer a number of social environmental and health benefits and may play a role in reducing meat consumption however there has been a lack of research on the role they can play in the policy agenda and how specific meat substitute attributes can influence consumers to replace partially replace meat in their diets in this paper we examine consumers preferences for attributes of meat and meat substitute products and develop consumer segments based on these preferences the results of a choice experiment with 247 uk consumers using food labels and mince ground meat illustrate that the type of mince fat content country of origin and price are major factors that influence choice carbon footprint method of production and brand play a secondary role in determining consumers choices of meat meat substitutes latent class analysis is used to identify six consumer segments price conscious healthy eaters taste driven green organic and vegetarian consumers which have different socio demographic characteristics and meat consumption patterns future interventions and policies aimed at reducing meat consumption including labelling provision of more information financial incentives educational campaigns and new product development will be more effective if they are holistic and target specific consumer segments instead of focus on the average consumer