tying and innovation a dynamic analysis of tying arrangements this paper analyses the effects of tying arrangements on r d incentives it shows that tying is a means through which a firm can commit to more aggressive r d investment in the tied goods market tying also has the strategic effect of reducing rivals incentives to invest in r d the strategy of tying is a profitable one if the gains via an increased share of dynamic rents in the tied goods market exceed the losses that result from intensified price competition in the market the welfare implications of tying and consequently the appropriate antitrust policy are discussed

competitive non linear pricing and bundling we examine the impact of multiproduct nonlinear pricing on profit consumer surplus and welfare in a duopoly when consumers buy all their products from one firm the one stop shopping model nonlinear pricing leads to higher profit and welfare but often lower consumer surplus than linear pricing by contrast in a unit demand model where consumers may buy one product from one firm and another product from another firm bundling generally acts to reduce profit and welfare and to boost consumer surplus in a more general model where consumers may buy from more than one firm and where consumers have elastic demands for each product nonlinear pricing has ambiguous effects compared with linear pricing nonlinear pricing tends to raise profit but harm consumer surplus when i demand is elastic ii there is substantial product differentiation iii there is substantial heterogeneity in consumer demand iv consumers face substantial shopping costs when visiting more than one firm and v a consumer s brand preference for one product is strongly correlated with her brand preference for another product nonlinear pricing is more likely to lead to welfare gains when i ii iv and v hold but iii does not

analyzing the welfare impacts of full line forcing contracts theoretical investigations have examined both anti competitive and efficiency inducing rationales for vertical bundling making empirical evidence important to understanding its welfare implications we use an extensive dataset on full line forcing contracts between movie distributors and video retailers to empirically measure the impact of vertical bundling on welfare we identify and measure three primary effects of full line forcing contracts market coverage leverage and efficiency we find that bundling increases market coverage and efficiency but has little impact on one distributor s gaining leverage over another as a result we estimate that full line forcing contracts increased consumer and producer surplus in this application

environmental management in development the evolution of paradigms in the past quarter century environmental management has increasingly become a concern of governments more recently the traditional split between developers and conservationists has begun to break down conceptions of what is economically and technologically practical ecologically necessary and politically feasible are rapidly changing this report discusses the implications of five paradigms of environmental management in development the author notes that the remedial legalistic approach of environmental management is breaking down instead interest in the more economically integrated approach of resource management has recently taken hold several interdependent forces indicate that improving the economic management of pollution and resources may be a necessary but insufficient measure to create the conditions for sustainable development the perception of tradeoffs between development and environmental quality persists in the present debate but its necessity is greatly exaggerated according to this paper finally it is noted that paradigms may be impervious to evidence and institutions and societies too difficult to change whether when and how these issues are resolved may be modern civilization s most significant test

computing cournot equilibrium through maximization over prices abstract this paper presents a characterization of internal cournot equilibrium based on first order conditions corresponding to profit maximization over prices this characterization may yield significant computational advantage as demand functions need not be inverted and simple first order conditions are obtained

vertical antitrust policy as a problem of inference the legality of nonprice vertical practices in the u s is determined by their likely competitive effects an optimal enforcement rule combines evidence with theory to update prior beliefs and specifies a decision that minimizes the expected loss because the welfare effects of vertical practices are theoretically ambiguous optimal decisions depend heavily on prior beliefs which should be guided by empirical evidence empirically vertical restraints appear to reduce price and or increase output thus absent a good natural experiment to evaluate a particular restraint s effect an optimal policy places a heavy burden on plaintiffs to show that a restraint is anticompetitive

please or squeeze brand performance implications of constrained and unconstrained multi item promotions existing research on price promotions typically investigates the effects of single product promotions however brand managers often promote multiple items simultaneously to bolster the performance of a complete brand line this paper investigates the brand performance implications of such multi item promotions we distinguish between two types of multi item promotions traditional unconstrained multi item promotions that grant a discount irrespective of the size or composition of the purchase set and constrained multi item promotions that require consumers to purchase specific quantities self bundling or even predetermined combinations fixed bundling of promoted items using a normative consumer decision model the authors analyze the relative effectiveness of these promotions in terms of unit sales and revenue impact and show that promotion performance is moderated by consumers preference for variety the authors find that unconstrained multi item promotions outperform single item promotions especially in markets without variety seeking in markets with variety seeking unconstrained multi item promotions are not as effective in stealing extra sales from competition because consumers prefer to spread their purchases across all items including competitive ones however in those markets self bundling promotions are particularly effective because they force consumers to adopt larger amounts of the promoted items at the expense of competitors finally in neither type of market does fixed bundling substantially improve promotion performance

compatibility and bundling of complementary goods in a duopoly this paper presents a simple model of compatibility and bundling in industries where consumers assemble several necessary components into a system that is close to their ideal the authors show that for a wide range of parameters firms will choose to produce compatible components but will offer discounts to consumers who purchase all components from the same firm however firms would be better off if they could commit not to provide such discounts furthermore the equilibrium tends to involve socially excessive bundling finally mixed bundling strategies tend to increase the range of parameters over which socially excessive standardization occurs copyright 1992 by blackwell publishing ltd

comparing systems approaches to innovation and technological change for sustainable and competitive economies an explorative study into conceptual commonalities differences and complementarities this paper makes a distinction between three theoretical frameworks that have been highly influential in the discourse on innovation competitiveness and sustainability sectoral systems of innovation ssi technological innovation systems tis and socio technical systems st systems these frameworks share a common systems approach to innovation but are often positioned as different bodies of literature that correspond to different epistemic communities this paper is explorative and conceptual in nature it presents a systematic comparative review of ssi tis and st systems based on the following analytical dimensions 1 system boundaries 2 actors and networks 3 institutions 4 knowledge 5 dynamics and 6 policy approach in the concluding section commonalities and differences of the three approaches are presented and suggestions for complimentarily are made c 2010 elsevier ltd all rights reserved

barriers and drivers in the adoption of advanced wastewater treatment technologies a comparative analysis of italian utilities abstract the adoption of new environmentally friendly technologies is becoming a key issue in both public debate and policy arenas the paper focuses on innovation adoption by wastewater utilities and investigates why stringent environmental regulations are not sufficient to foster it the adoption of advanced wastewater treatment technologies is made complex by the sunk nature of highly specific infrastructures and the consequent exposure of utilities to political and institutional influences in addition it requires the involvement of various actors utilities suppliers contractors and is influenced by various stakeholders communities business users citizens associations that generally have no aligned objectives with reference to the aforementioned theoretical background our paper develops and analyzes a conceptual framework that unfolds over two dimensions a the role played by firm specific characteristics i e technological and organizational capabilities and managerial professionalism b the influence of community level factors i e citizens voice and pressure exerted by local stakeholders we investigate these issues through multiple descriptive case studies based on semi structured interviews with the ceos and top managers of 11 wastewater utilities operating in a region in north italy the results suggest that firm specific resources could spur wastewater utilities into adopting innovation despite an adverse institutional environment at the same time on the community level side the analysis shows that residents and local businesses are able to mobilize resources and exert pressure to either drive or hinder the adoption of water innovations

abuse of market power how should competition law deal with anti competitive behaviour by firms with market power in the light of recent ec and us cases this is perhaps the most controversial current issue for competition policy lax policy would jeopardise the competitiveness of markets but rigid policy would chill pro competitive pro consumer conduct this paper gives an economic assessment of evolving legal standards in the area the importance of developing a stronger economic basis for ec law on abuse of market dominance is stressed

measuring the bullwhip effect for supply chains with seasonal demand components abstract a bullwhip measure for a two stage supply chain with an order up to inventory policy is derived for a general stationary sarma p q p q s demand process explicit expressions for several sarma models are obtained to illustrate the key relationship between lead time and seasonal lag it is found that the bullwhip effect can be reduced considerably by shortening the lead time in relation to the seasonal lag value

optimal bundling of technological products with network externality for many high tech and internet related products utility to consumers depends in part on the size of the user base a phenomenon called network externality a firm with a portfolio of these and other products that are often asymmetric in their degree of network externality or marginal cost may have to look beyond the traditional strategies of pure components pure bundling and mixed bundling one such strategic alternative in a two product case would be a so called mixed bundling 1 under which the bundle and product 1 are offered but the other product can only be purchased in a bundled form the purpose of this study is to compare and contrast the impact of such asymmetry or symmetry in direct network externality and cost on the choice of bundling strategies we model a monopolist firm that has a product in each of two categories and faces heterogeneous consumers results suggest that pure bundling is more profitable when both products have low marginal costs or high network externality whereas pure components or mixed bundling 1 is more profitable when the products diverge in their costs and network externality e g only one product has network externality traditional mixed bundling is optimal in other instances

analysis of compound bullwhip effect causes abstract this research investigates compound causes of the bullwhip effect bwe by considering an inventory system with multiple price sensitive demand streams joint price and demand dynamics are captured by a vector time series process that incorporates the stochastic co movements in price and demand we study two bwe measures one for each demand stream individually and one for the aggregated demand we show that demand parameters including demand autocorrelation cross correlation and price sensitivity serve as root causes of the bwe we prove that the impact of these parameters on the bwe can be additively decomposed conditions are established under which a pair of simultaneous compound causes may attenuate or dampen the bwe when demand streams are aggregated we derive a pooling factor that quantifies the impact of demand aggregation on order stability when positive the pooling factor corresponds to a synergy effect that captures the gain in the stability of the pooled orders conditions for the existence of the synergy effect are obtained for several special cases involving a zero leadtime we also discuss how our analytical findings can be managerially applied to bullwhip mitigation strategies

industry self regulation without sanctions the chemical industry s responsible care program industry self regulation the voluntary association of firms to control their collective action has been proposed as a complement to government regulation proponents argue that the establishment of

inventory management for stochastic lead times with order crossovers we study the impact of stochastic lead times with order crossover on inventory costs and safety stocks in the order up to out policy to motivate our research we present global logistics data which violates the traditional assumption that lead time demand is normally distributed we also observe that order crossover is a common and important phenomenon in real supply chains we present a new method for determining the distribution of the number of open orders using this method we identify the distribution of inventory levels when orders and the work in process are correlated this correlation is present when demand is auto correlated demand forecasts are generated with non optimal methods or when certain ordering policies are present our method allows us to obtain exact safety stock requirements for the so called proportional order up to pout policy a popular implementable linear generalization of the out policy we highlight that the out replenishment policy is not cost optimal in global supply chains as we are able to demonstrate the pout policy always outperforms it under order cross over we show that unlike the constant lead time case minimum safety stocks and minimal inventory variance do not always lead to minimum costs under stochastic lead times with order crossover we also highlight an interesting side effect of minimizing inventory costs under stochastic lead times with order crossover with the pout policy an often significant reduction in the order variance

an analysis of bundle pricing the case of biotech seeds biotechnology has provided opportunities for strategic management and pricing of patented products this article analyzes the economics and strategy of bundling and bundle pricing of biotech traits in seeds when the bundling of genes traits is decided by biotech firms firms may choose among subadditive pricing component pricing or superadditive pricing strategies we argue that complementarity among component genes contributes to subadditive pricing while substitution among components contributes to superadditive pricing the nature of bundle pricing is explored empirically using u s seed corn data from 2000 to 2007 we document that subadditive bundle pricing of traits is commonly found in the seed corn market however we also present evidence of superadditive pricing and component pricing the presence of different pricing and bundling strategies suggests a rapidly advancing and complex market the preponderance of subadditive pricing suggests that trait bundling offers benefits to farmers exhibiting strong demand for multiple complementary genetic traits jel classifications l4 l13 l65

the impact of forecasting methods on the bullwhip effect abstract this paper considers the impact of forecasting methods on the bullwhip effect for a simple replenishment system in which a first order autoregressive process describes the customer demand and an order up to inventory policy characterizes the replenishment decision a bullwhip effect measure is derived for the optimal forecasting procedure that minimizes the mean squared forecasting error for the specified demand process similar measures are obtained for the moving average and exponential smoothing methods the findings indicate that different forecasting methods lead to bullwhip effect measures with distinct properties in relation to lead time and underlying parameters of the demand process moreover a simple rule is established to help managers select a forecasting method that yields the lowest inventory cost

bundling as an entry barrier in this paper we look at the case for bundling in an oligopolistic environment we show that bundling is a particularly effective entry deterrent strategy a company that has market power in two goods a and b can by bundling them together make it harder for a rival with only one of these goods to enter the market bundling allows an incumbent to credibly defend both products without having to price low in each the traditional explanation for bundling that economists have given is that it serves as an effective tool of price discrimination by a monopolist although price discrimination provides a reason to bundle the gains are small compared with the gains from the entry deterrent effect i introduction in this paper we look at the case for bundling in an oligopolistic environment we show that bundling is a particularly effective entry deterrent strategy a company that has market power in two goods a and b can by bundling them together make it harder for a rival with only one of these goods to enter the market bundling allows an incumbent to defend both products without having to price low in each while it is still possible to compete by offering a rival bundle a monopolist can significantly lower the potential profits of a one product entrant without having to engage in limit pricing prior to entry we also show that bundling continues to be an effective pricing tool even if entry deterrence fails or if there is already an existing one product rival a company with a monopoly in product a and a duopoly in product b makes higher profits by selling an a b bundle than by selling a and b independently leveraging market power from a into b and accepting some one product competition against the bundle is better than using the monopoly power in good a all by itself since bundling mitigates the impact of competition on the incumbent an entrant can expect the bundling strategy to persist even without any commitment the traditional explanation for bundling that economists have given is that it serves as an effective tool of price discrimination by a monopolist see stigler 1968 adams and yellen

seasonality aggregation and the testing of the production smoothing hypothesis one of the leading hypotheses concerning the dynamics of production over time is the production smoothing hypothesis given a planning horizon which spans a number of production periods the firm need not produce in each period an amount equal to expected sales rather resorting to inventory accumulation and liquidation the firm may follow a production plan temporally smoother than the path of demand if firms faced with convex cost functions chose to smooth the rate of output in order to minimize costs one would expect to observe that the rate of output would vary less than the rate of sales with variations in inventory stocks absorbing some of the fluctuations in sales recently work on the testing of the production smoothing hypothesis has cast doubt on its empirical validity the evidence presented by alan blinder seems to indicate that the variance of production exceeds that of sales in seven out of eight two digit retail industries 1981 and in eighteen out of twenty two digit manufacturing industries 1983 and 1986 the purpose of this paper then is to examine the validity of such tests when seasonally adjusted aggregated data are used the evidence presented show that the relative size of the variances of the seasonally adjusted production and sales does not provide valid tests of the production smoothing hypothesis in addition aggregating over firms where the seasonal patterns differ may also distort tests of production smoothing blinder realized that the use of seasonally adjusted data may not provide an adequate test of the hypothesis stating had they been available i would have preferred to use data that were not seasonally adjusted since the production smoothing model presumably applies to seasonal fluctuations in sales however such data are not available 1983 fn 19 in this paper i focus on the cement industry because the unadjusted disaggregated data are available for the direct testing of the conjecture that aggregate seasonally adjusted data mask production smoothing phenomenon aggregate monthly data on five other industries will also be examined

a comprehensive review of the evolving and cumulative nature of eco innovation in the chemical industry different bodies of literature have attempted to explain what factors and events drive industries throughout processes of environmental change the latter is a gradual historical process of evolution from lower to higher degrees of development based on concepts derived from evolutionary economics greening technological progress and resource based view of the firm this article informs the sustainability transitions literature by providing an account of the evolution in the chemical industry s striving for the design use and production of environmentally sound chemical processes and products based upon eco innovation a conceptual model was elaborated depicting five stages of environmental change in the chemical industry in the period 1901 2030 the authors empirically tested this model by conducting a longitudinal computer aided content analysis of 255 documents addressing different environmental and innovation aspects in this industry in the same period of time the results of this article advance our modern understanding of the different stages of evolution of the chemical industry in terms of environmental change consistent with the conceptual model hitherto presented the findings of this article highlight a number cumulative of factors that enabled the evolution of the chemical industry throughout time supporting eco innovation highlighting the intertwined nature of regulation innovation and technological change it is plausible that the future development of this industry might be shaped by the policy driven paradigms of sustainability and resource efficiency 2015 the authors

product bundling and incentives for mergers and strategic alliances this paper analyzes firms choice between a merger and a strategic alliance in bundling their product with other complementary product we consider a framework in which firms can improve profits only from product bundling while mixed bundling is not profitable pure bundling is because pure bundling reduces consumers choices and thus softens competition among firms firms benefit the most from this reduced competit ion if they form an alliance firms do not gain as much from a merger because internalizing the complementarity between the two products a merged firm is inclined to pursue aggressive pricing to gain market share yet firms may be motivated to choose a merger over an alliance because of foreclosure possibility as foreclosure is not possible under strategic alliance however in response unmerged rivals can use a strategic alliance to avert foreclosure hence the possibility of counter bundling via strategic alliance by rivals reduces the incentives for merger in equilibrium

a model of biased intermediation this paper studies situations in which some consumers rely on a potentially biased intermediary to choose among downstream firms we introduce the notion that firms and consumers payoffs can be congruent or conflicting and show that this has important implications for the effects of bias under congruence the firm towards which the intermediary is biased invests more than its rival and consumers can be better off than under no bias under conflict bias hurts consumers and the favored firm charges higher prices we study various oft proposed policies for dealing with a biased intermediary and show that the efficacy of each intervention depends strongly on whether the environment exhibits congruence or conflict we discuss how the model relates to recent issues in online markets

discounts as a barrier to entry abstract to what extent can an incumbent manufacturer use discount contracts to foreclose efficient entry we show that off list price rebates that do not commit buyers to unconditional transfers like the rebates in eu commission v michelin ii for instance cannot be anticompetitive this is true even in the presence of cost uncertainty scale economies or intense downstream competition all three market settings where exclusion has been shown to emerge with exclusive dealing contracts the difference stems from the fact that unlike exclusive dealing provisions rebates do not contractually commit retailers to exclusivity when signing the contract jel d43 d86 k21 l13 l14 l42 l60

portfolio effects in conglomerate mergers the empirical evidence of leverage effects in korean liquor market in the article we implement an empirical test on the portfolio effects of conglomerate mergers using the data of korean liquor market during the period 1990 2008 in which there have been several important conglomerate mergers between beer and soju companies we find that the combined company could take the advantage of regional market dominance in the beer market in expanding regional market shares in the soju market such leverage effects are differentiated from the efficiency enhancing portfolio effects that result in the combined company s expanding shares over all regional soju markets regardless of the presence of dominance in the beer market the common distribution channels of liquor wholesalers seem to play a pivotal role in the combined firm s expansion of dominance in one market into another furthermore we implement separate empirical tests for two subsamples of regionally dominant and nondominant soju companies in order to differentiate the leverage effects of foreclosure from those of toeh

market timing and mutual fund performance an empirical investigation the evaluation of investment performance is of importance for allocating investment funds efficiently and setting appropriate management fees because actively managed mutual funds are an important form of investment in the united states a valid question is whether the active management has achieved a sufficient increase in returns to offset the associated costs of information and transactions as well as the management fees charged as a corollary the ability to earn superior returns based on superior forecasting ability would be a violation of the efficient markets hypothesis and would have far reaching implications for the theory of finance 2 henriksson and merton 1981 present statistical techniques for testing forecasting ability with a particular emphasis on the market timing ability of investment managers the tests are derived from the basic model of market timing developed by merton 1981 where the forecaster predicts when stocks will outperform riskless securities and when riskless securities will outperform stocks but does not predict the magnitude of the relative returns the evaluation of the performance of investment managers is a topic of considerable interest to practitioners and academics alike using both the parametric and nonparametric tests for the evaluation of forecasting ability presented by henriksson and merton the market timing ability of 116 open end mutual funds is evaluated for the period 1968 80 the empirical results do not support the hypothesis that mutual fund managers are able to follow an investment strategy that successfully times the return on the market portfolio

analysis of the bullwhip effect in a multiproduct setting with interdependent demands the bullwhip effect has been extensively studied primarily based on the analysis of various single product models with a few exceptions we extend the single product analysis to the multiproduct setting of interdependent demand streams with auto correlation and cross product correlation as well as contemporaneous correlation across forecasting errors we find that interdependency between demand streams plays a critical role in determining the existence and magnitude of the bullwhip effect specifically we consider two operating environments a the firm orders product specific materials so that the ordering decision is based on the product level and b the firm orders generic materials so that the order decision is based on the category level we show that even with demand pooling a firm operating at the category level can experience a larger bullwhip effect and a larger order variance under certain conditions that depend on the number of products in the category and the demand dependencies

cradle to cradle design creating healthy emissions a strategy for eco effective product and system design eco effectiveness and cradle to cradle design present an alternative design and production concept to the strategies of zero emission and ecoefficiency where eco efficiency and zero emission seek to reduce the unintended negative consequences of processes of production and consumption eco effectiveness is a positive agenda for the conception and production of goods and services that incorporate social economic and environmental benefit enabling triple top line growth eco effectiveness moves beyond zero emission approaches by focusing on the development of products and industrial systems that maintain or enhance the quality and productivity of materials through subsequent life cycles the concept of eco effectiveness also addresses the major shortcomings of eco efficiency approaches their inability to address the necessity for fundamental redesign of material flows their inherent antagonism towards long term economic growth and innovation and their insufficiency in addressing toxicity issues a central component of the eco effectiveness concept cradle to cradle design provides a practical design framework for creating products and industrial systems in a positive relationship with ecological health and abundance and long term economic growth against this background the transition to eco effective industrial systems is a five step process beginning with an elimination of undesirable substances and ultimately calling for a reinvention of products by reconsidering how they may optimally fulfill the need or needs for which they are actually intended while simultaneously being supportive of ecological and social systems this process necessitates the creation of an eco effective system of nutrient management to coordinate the material flows amongst actors in the product system the concept of intelligent materials pooling illustrates how such a system might take shape in reality 2006 published by elsevier ltd

performance analysis of demand planning approaches for aggregating forecasting and disaggregating interrelated demands a synchronized and responsive flow of materials information funds processes and services is the goal of supply chain planning demand planning which is the very first step of supply chain planning determines the effectiveness of manufacturing and logistic operations in the chain propagation and magnification of the uncertainty of demand signals through the supply chain referred to as the bullwhip effect is the major cause of ineffective operation plans therefore a flexible and robust supply chain forecasting system is necessary for industrial planners to quickly respond to the volatile demand appropriate demand aggregation and statistical forecasting approaches are known to be effective in managing the demand variability this paper uses the bivariate var 1 time series model as a study vehicle to investigate the effects of aggregating forecasting and disaggregating two interrelated demands through theoretical development and systematic analysis guidelines are provided to select proper demand planning approaches a very important finding of this research is that disaggregation of a forecasted aggregated demand should be employed when the aggregated demand is very predictable through its positive autocorrelation moreover the large positive correlation between demands can enhance the predictability and thus result in more accurate forecasts when statistical forecasting methods are used

measure of bullwhip effect in supply chains the case of high order autoregressive demand process abstract bullwhip effect the phenomenon in which variance of demand is amplified when moving upstream has attracted the attention of many researchers for the last few decades although the main sources that cause bullwhip effect have been identified quantifying the bullwhip effect still remains a challenge in the past measuring the bullwhip effect for supply chains with autoregressive demand process has been conducted by some researchers however most past researches focused mainly on the simple ar 1 model in many practical situations autoregressive models with higher order should be employed because they might better represent the demand process up to now very little effort has been spent on this matter therefore this research is conducted to fill this gap by first dealing with ar 2 demand process and investigating the behavior of the developed measure with respect to autoregressive coefficients and order lead time extension to the general ar p demand process is then considered

an antitrust analysis of bundled loyalty discounts abstract consider a monopolist in one market that faces competition in a second market bundled loyalty discounts in which customers receive a price break on the monopoly good in exchange for making all purchases from the monopolist have ambiguous welfare effects such discounts should not always be treated as a form of predatory pricing in some settings they act as tie in sales existing tests for whether such discounts violate competition laws do not track changes in consumer surplus or total surplus we apply a new test to an illustrative example based on smithkline that assumes the tied market has homogeneous goods if the tied market is characterized by hotelling competition bundling by the monopolist causes the rival firm to reduce its price in numerical examples we find that this can deter entry or induce exit

expert inquiry on innovation options for cleaner production in the chemical industry abstract the prospects of further progress in cleaner production in the chemical industry are explored by means of an expert inquiry which looks at the ecological and economic potentials of different technological and business innovation options as well as barriers to their development the outcome of the inquiry is analysed with a view to identify prospective priority areas for innovation support policies the analysis shows that innovation leading to alternative synthetic pathways and a shift to selling services instead of products have especially high potentials for both strong positive ecological effects and to be important factors for competitiveness the utilisation of these potentials depends however on whether different types of innovation barriers can be overcome suggestions are made as to how to develop policy measures to facilitate this

information sharing and order variability control under a generalized demand model the value of information sharing and how it could address the bullwhip effect have been the subject of studies in the literature most of these studies used different forms of demand models assuming that no order smoothing was used by the retailer and that the supplier has full knowledge of the retailer s demand model and order policy in this paper we contribute to the literature by starting with a most general demand model coupled with a smoothing policy for order variability control in addition we do not require that the supplier has full knowledge of the retailer s demand model and order policy but instead let the retailer share its projected future orders and freely revise them as the retailer sees fit under such a setting we first obtain a unifying formula for the magnitude of the bullwhip effect the formula indicates that it is the forecast correlation over the exposure period as a whole that determines the magnitude of the bullwhip effect we then quantify the value of information sharing and generalize the existing results in the literature finally we explore the optimal smoothing parameters that could benefit the total supply chain the resulting optimal policy resembles the postponement strategy we find that information sharing together with order postponement improves the supply chain performance even though the order variability may amplify in some cases

mixed bundling in two sided markets in the presence of installed base effects we analyze mixed bundling in two sided markets where installed base effects are present and find that the pricing structure deviates from traditional bundling as well as the standard two sided markets literature we determine prices on both sides fall with bundling mixed bundling acts as a price discrimination tool segmenting the market more efficiently consequently as a by product of this price discrimination the two sides are better coordinated and social welfare is enhanced we show unambiguously that platform participations increase on both sides of the market after theoretically evaluating the impact mixed bundling has on prices and welfare we take the model predictions to data from the portable video game console market we find empirical support for all theoretical predictions this paper was accepted by j miguel villas boas marketing

the dynamic effects of bundling as a product strategy several key questions in bundling have not been empirically examined in marketing is mixed bundling more effective than pure bundling or pure components does correlation in consumer valuations make bundling more or less effective does bundling serve as a complement or substitute to network effects to address these questions we develop a consumer choice model from microfoundations to capture the essentials of our setting the handheld video game market we provide a framework to understand the dynamic long term effects of bundling on demand the primary explanation for the profitability of bundling relies on homogenization of consumer valuations for the bundle allowing the firm to extract more surplus we find that bundling can be effective through a novel and previously unexamined mechanism of dynamic consumer segmentation which operates independent of the homogenization effect and can in fact be stronger when the homogenization effect is weaker we also find that bundles are treated as separate products distinct from component products by consumers sales of both hardware and software components decrease in the absence of bundling and consumers who had previously purchased bundles might delay purchases resulting in lower revenues we also find that mixed bundling dominates pure bundling and pure components in terms of both hardware and software revenues investigating the link between bundling and indirect network effects we find that they act as substitute strategies with a lower relative effectiveness for bundling when network effects are stronger

information distortion in a supply chain the bullwhip effect this article originally appeared in management science april 1997 volume 43 number 4 pp 546 558 published by the institute of management sciences consider a series of companies in a supply chain each of whom orders from its immediate upstream member in this setting inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions this paper claims that the information transferred in the form of orders tends to be distorted and can misguide upstream members in their inventory and production decisions in particular the variance of orders may be larger than that of sales and distortion tends to increase as one moves upstream a phenomenon termed bullwhip effect this paper analyzes four sources of the bullwhip effect demand signal processing rationing game order batching and price variations actions that can be taken to mitigate the detrimental impact of this distortion are also discussed

invention under uncertainty and the threat of ex post entry abstract this article proposes a theoretical framework for studying the invention of new products when demand is uncertain in this framework under general conditions the threat of ex post entry by a competitor can deter invention ex ante asymmetric market power in the ex post market exacerbates the problem the implications of these general results are examined in a series of examples that represent important markets in the computer industry the first is a model that shows how an operating system monopolist by its mere presence can deter the invention of complements to its own detriment as well as that of society the implications of policies such as patent protection price regulation and mandatory divestiture are considered three additional examples consider the ability of a monopolist in one market to commit to bundling an unrelated product a pair of horizontally differentiated firms that can add a new feature to their products and a platform leader that can be challenged in its base market by the supplier of a complementary product

tying compatibility and planned obsolescence according to the hypothesis of planned obsolescence a durable goods monopolist without commitment power has an excessive incentive to introduce new products that make old units obsolete and this reduces its overall profitability in this paper i reconsider the above hypothesis by examining the role of competition in a monopolist s upgrade decision i find that when a system add on is competitively supplied a monopolist chooses to tie the add on to a new system that is only backward compatible even if a commitment of not introducing the new system is available and socially optimal tying facilitates a price squeeze

the bullwhip effect progress trends and directions the bullwhip effect refers to the phenomenon where order variability increases as the orders move upstream in the supply chain this paper provides a review of the bullwhip literature which adopts empirical experimental and analytical methodologies early econometric evidence of bullwhip is highlighted findings from empirical and experimental research are compared with analytical and simulation results assumptions and approximations for modelling the bullwhip effect in terms of demand forecast delay replenishment policy and coordination strategy are considered we identify recent research trends and future research directions concerned with supply chain structure product type price competition and sustainability

an arima supply chain model this paper presents a multistage supply chain model that is based on autoregressive integrated moving average arima time series models given an arima model of consumer demand and the lead times at each stage it is shown that the orders and inventories at each stage are also arima and closed form expressions for these models are given the paper also discusses the causes of the bullwhip effect a phenomenon in which variation in demand produces larger variations in upstream orders and inventory this discussion reveals how different modeling can lead to different insights because they make different assumptions about the cause of the bullwhip effect these observations are used to develop managerial insights about reducing the bullwhip effect

dynamic pricing when to entice brand switching and when to reward consumer loyalty this article develops a theory of dynamic pricing in which firms may offer separate prices to different consumers based on their past purchases brand preferences over two periods are described by a copula admitting various degrees of positive dependence when commitment to future prices is infeasible each firm offers lower prices to its rival s customers when firms can commit to future prices consumer loyalty is rewarded if preference dependence is low but enticing brand switching occurs if preference dependence is high our theory provides a unified treatment of the two pricing policies and sheds light on observed practices across industries

tying foreclosure and exclusion in recent years the leverage theory of tied good sales has faced heavy and influential criticism in an important sense though the models used by its critics are actually incapable of addressing the leverage theory s central concerns here the author reconsiders the leverage hypothesis and argues that tying can indeed serve as a mechanism for leveraging market power the mechanism through which this leverage occurs its profitability and its welfare implications are discussed in detail copyright 1990 by american economic association

gaussian demand and commodity bundling in an important and widely cited essay adams and yellen 1976 examine the use of package selling as a price discrimination device they consider a monopolist producing two goods with constant unit costs and facing buyers with diverse tastes the marginal utility of a second unit of either good is assumed to be zero for all buyers the two goods are independent in demand for all buyers so that any buyer s reservation price for the first unit of either good is independent of the market price of the other thus the maximum amount any buyer would pay for a bundle consisting of one unit of each good is the sum of the two reservation prices and buyers are completely described by the values of those two prices 2 resale markets are assumed away in order to obtain comparative results for alternative pricing strategies the distribution of reservation prices in the adams yellen framework is assumed to be bivariate normal implications of gaussian demand are explored pure bundling is shown to operate by reducing buyer diversity thus facilitating the capture of consumers surplus it generally makes buyers worse off than unbundled sales it is more profitable if average reservation prices are high enough mixed bundling combines advantages of both pure bundling and unbundled sales and it is generally strictly more profitable than either bundling which treats goods symmetrically seems most attractive under symmetric reservation price distributions i am indebted to severin borenstein for superb research assistance to the ford motor company for research support through a grant to m i t and to the harvard economics department for housing me as a visiting scholar while most of this research was performed of course only i can be held responsible for this essay s shortcomings 1 the first clear recognition of this possibility seems to have been by stigler 1968 but also see burstein 1960 2 paroush and peles 1981 relax the assumption that consumers purchase at most one unit of each good but they consider only two types of buyers both with linear demand functions they retain the assumption that demands are independent for all buyers telser 1979 and phillips 1981 use different frameworks to analyze bundling policies spence 1980 explores the relation between bundling across commodities as here and bundling multiple units of the same

general wisdom concerning the factors affecting the adoption of cleaner technologies a survey 1990 2007 abstract cleaner technologies ct have recently received much attention in diverse media and policy agendas this comes out of the clear role they play in environmental protection and sustainability and the large potential to contribute to economic growth and competitiveness the realization of both potentials depends on the level diffusion and exploitation achieved today very low this article presents a selective survey of papers that today represent the general wisdom concerning the factors affecting adoption as a primary condition to diffusion and exploitation of ct the paper helps to clarify the challenges facing diffusion modelers and policy makers when dealing with policy design assessing the levels of diffusion achieved as well as the factors affecting diffusion of a particular technology the paper ends outlining further research need in the field

bundling and competition for slots we consider competition between sellers selling multiple distinct products to a buyer having k slots under independent pricing a pure strategy equilibrium often does not exist and equilibrium in mixed strategy is never efficient when bundling is allowed each seller has an incentive to bundle his products and an efficient technology renting equilibrium always exists furthermore in the case of digital goods or when sales below marginal cost are banned all equilibria are efficient comparing the mixed strategy equilibrium with the technology renting equilibrium reveals that bundling often increases the buyer s surplus finally we derive clear cut policy

the use of full line forcing contracts in the video rental industry bundling is at the forefront of many policy debates as new technologies allow firms to implement more complex bundling arrangements realistic analyses of bundling particularly between suppliers and retailers require detailed data on both supply arrangements and consumer demand we analyze firms use of bundling as a vertical restraint known as full line forcing using extensive supply and demand data from the video rental industry our model captures key details of the market that determine firms contractual choices and sheds light on the implications of these decisions the empirical approach provides a model for how to analyze bundling when detailed data are available jel d86 l14 l81 l82

the dynamics of technological innovation the case of the pharmaceutical industry abstract this paper examines the mechanisms and dynamics of the process of innovation in companies and sectors of the chemical industry it is based on analysis of science and technology output indicators namely patents and innovations evaluated in terms of originality and in the case of innovations in terms of market success as well radical innovation ri is identified as the kingpin for the evolution of technologies in both the micro and macro economic context not only because it provides a model for imitation but also because it turns out to be more profitable for the innovating companies than incremental innovation at the micro economic level this paper examines the significance of diverse driving forces which lead a company to the launching of projects aiming at ri measures the length of commitment to such projects and describes the dynamic effects generated by the introduction of a successful ri and how they affect the company s subsequent r d and market orientation at the macro economic level this paper identifies the stages of youth growth maturity and decline of the subsectors of the chemical industry examines the distribution of ri and market successful innovations over the development of a sector describes the influence of market demand and capital investment on technological advance and compares the development of national chemical industries the paper concludes with an account of the dynamics of technological innovation in the chemical industry over the period 1930 1985 which is based on the empirical findings of the previous sections

endogenous market structures and contract theory delegation principal agent contracts screening franchising and tying abstract i study the role of unilateral strategic contracts for firms active in markets with price competition and endogenous entry traditional results change substantially when the market structure is endogenous rather than exogenous they concern 1 contracts of managerial delegation to non profit maximizers 2 incentive principal agent contracts in the presence of moral hazard on cost reducing activities 3 screening contracts in case of asymmetric information on the productivity of the managers 4 vertical contracts of franchising in case of hold up problems and 5 tying contracts by monopolists competing also in secondary markets firms use always these contracts to strengthen price competition and manage to obtain positive profits in spite of free entry

the multivariate bullwhip effect abstract a multivariate bullwhip expression for m products with an order up to inventory policy is developed the demand models under consideration are differenced stationary vector time series with a wold representation for which general forecasting formulas are available resulting in a large class of possible models including nonstationary ones examples are provided for common demand models and implemented on sales data it is found that the multivariate approach gives rise to mechanisms for understanding and reducing the bullwhip effect through horizontal information sharing particularly for the nonstationary demand case in the stationary setting a more nuanced approach to bullwhip reduction can be achieved by managing the relationship between cross correlations and lead times a method of determining whether a multivariate or univariate approach generates a lower bullwhip effect is proposed

tying investment and the dynamic leverage theory the idea that an incumbent supplier may tie two complementary products to fend off potential entrants is popular among practitioners yet is not fully understood in formal economic theory this article makes sense of the argument by formally deriving a dynamic version of the old leverage doctrine we show that when an incumbent monopolist faces the threat of entry in all complementary components tying may make the prospects of successful entry less certain discouraging rivals from investing and innovating tie in sales may reduce consumer and total economic welfare copyright 2001 by the rand corporation

robert bork s contributions to antitrust perspectives on tying behavior abstractrobert bork was one of the key proponents of the traditional chicago school view of tying and antitrust which is that tying can never be used to extend or leverage market power from one market to another so it should also never be an antitrust violation in this paper we review the traditional chicago school perspective and in particular bork s arguments on the topic and then discuss how these arguments relate to the more recent theoretical literature on the subject which takes a game theoretic approach we then discuss bork s later views on tying concerning the microsoft case we include a discussion of whether these later views of tying and antitrust were different from his earlier views or instead whether it was the nature of the cases that had changed

to bundle or not to bundle commodity bundling is studied in an environment where the dispersion of valuations unambiguously decreases when two or more goods are sold as a bundle only bundling is more likely to dominate separately selling the goods if marginal costs are low relative to the average valuation or if the distribution of valuations is very peaked around the mean

optimal product bundling with dependent valuations the price of independence abstract in this paper we investigate the tactical problem of pricing a bundle of products when the underlying valuations of the bundle components are dependent we use copula theory to model the joint density of reservation prices and provide analytical derivations for the prices under different bundling strategies and sharp bounds for the profit function we discover that when only the bundle is offered and the marginal costs are relatively small the seller is better off by bundling products that have a negative association between their valuations while the converse is true when the marginal costs are relatively high we also show that the net benefit of offering a full product line containing both the bundle and the components decreases for mild to strong associations between the component valuations compared to offering just the bundle finally we analyze how the typical literature assumption of independence of reservation prices impacts the seller s profitability when in fact the valuations are dependent and find that this gap in profitability which we call the price of independence can be arbitrarily large

a strategic motivation for commodity bundling the analytical literature on commodity bundling explains the practice of selling two or more differentiated products in a single package as a surrogate for direct price discrimination in contrast this paper shows that imperfect competition creates a strategic incentive to bundle the profitability of bundling whether it adversely affects rival producers and whether it yields an overall efficiency gain depends inter alia on the nature of product market competition the role of complementarity in explaining why firms bundle is also explored copyright 1990 by blackwell publishing ltd

strategic deterrence of sequential entry into an industry industrial entry deterrence is typically studied in a setting where an established firm or firms confront and attempt to deter a single potential competitor during the evolution of most industries however a sequence of firms enters or attempts to enter at distinct points in time consideration of issues arising from sequential entry fundamentally alters the qualitative nature of the deterrence decision undertaken by incumbent firms within a sequential setting counterintuitive behavior may be observed specifically numerous government policies designed to decrease industrial concentration penalties for anticompetitive practices subsidization of entry consent decrees restructuring industries may have the opposite effect

optimal bundling under imperfect competition abstract this paper examines the profitability of bundling for a two product seller of differentiated products facing competition from a one product rival in the presence of imperfect competition pure bundling emerges as the optimal pricing strategy other than ensuring the monopoly product can only be purchased in a bundle pure bundling s additional advantages stand in its ability to i prevent consumers from forming their own bundle using the single product seller s product ii reduce aggressiveness in pricing and iii smooth over the variation in valuations consumers have for the two types of products however the profit maximizing strategy is not welfare maximizing consumers are best off when all products are available a la carte only the competitor maximizes profits under mixed bundling and total welfare would be highest if the two product supplier were to offer only the monopoly product a la carte

product bundling impacts of product heterogeneity and risk considerations abstract bundling has been extensively studied in the literature and its benefits have been manifested through three perspectives of achieving better price discrimination helping to save costs and preserving the power for deterring a potential entrant in this study we examine two aspects of bundling which have not been studied before we examine the impact of product heterogeneity on bundling decisions we also address risk considerations in a bundling problem specifically we consider a retailer who has the option of selling a bundle of two products pure bundling policy or selling the products separately no bundling policy the retailer could also face a product selection problem for which we consider three scenarios of choosing two products with perfectly positively correlated perfectly negatively correlated or independent reservation prices we use a mean variance approach to include retailer s risk through her profit variability when maximizing the expected value of profit we characterize the conditions under which a policy or scenario performs better than the others under the influence of product heterogeneity and or retailer s risk aversion among other findings we show that optimal bundling price chosen by a risk averse decision maker cannot be larger than the one chosen by a risk neutral decision maker

redefining innovation eco innovation research and the contribution from ecological economics while innovation processes toward sustainable development eco innovations have received increasing attention during the past years theoretical and methodological approaches to analyze these processes are poorly developed against this background the term eco innovation is introduced in this paper addressing explicitly three kinds of changes towards sustainable development technological social and institutional innovation secondly the potential contribution of neoclassical and co evolutionary approaches from environmental and innovation economics to eco innovation research is discussed three peculiarities of eco innovation are identified the double externality problem the regulatory push pull effect and the increasing importance of social and institutional innovation while the first two are widely ignored in innovation economics the third is at the least not elaborated appropriately the consideration of these peculiarities may help to overcome market failure by establishing a specific eco innovation policy and to avoid a technology bias through a broader understanding of innovation finally perspectives for a specific contribution of ecological economics to eco innovation research are drawn it is argued that methodological pluralism as established in ecological economics would be very beneficial for eco innovation research a theoretical framework integrating elements from both neoclassical and evolutionary approaches should be pursued in order to consider the complexity of factors influencing innovation decisions as well as the specific role of regulatory instruments and the experience gathered in ecological economics integrating ecological social and economic aspects of sustainable development is highly useful for opening up innovation research to social and institutional changes 2000 elsevier science b v all rights reserved

entry deterrence by non horizontal merger we study when and how pure non horizontal mergers whether cross product or vertical can deter new entry organizational mergers implicitly commit firms to more aggressive price competition because heightened competition deters entry mergers can occur in equilibrium even when absent entry considerations they do not we show that in order to prevent a flood of entrants mergers arise even when a marginal merger costs incumbent firms more than does a marginal entrant

bundling entry deterrence and specialist innovators we examine a mechanism by which bundling may inefficiently deter entry into the market the model considers an incumbent monopolist in two complementary components that faces a series of entry attempts by rivals it is shown that the incumbent can practice bundling to buttress its monopoly position by keeping specialist innovators out of the market bundling prevents specialist rivals from coordinating in the dynamic entry process reducing the probability of an eventual displacement of the incumbent the specialization decisions of rivals are also distorted bundling may lead to lower customer and total economic welfare

profitability of product bundling using copulas to model the stochastic dependence of values this article establishes new general conditions for the profitability of product bundling a multiproduct monopolist generally achieves higher profit from mixed bundling than from separate selling if consumer values for two of its products are negatively dependent are independent or have sufficiently limited positive dependence the profitability of monopoly bundling also extends to situations where a multiproduct firm competes with a single product rival

the challenge of revenue sharing with bundled pricing an application to music bundling can increase revenue and profits relative to selling products on a standalone basis and this is an especially attractive strategy for zero marginal cost information products despite the clear benefits of bundling it has one major problem bundling produces revenue that is not readily attributable to particular pieces of intellectual property creating a revenue division problem the shapley value provides a well motivated solution to this problem and we use unique survey data to create measures of bundle value and in turn to estimate shapley values for each of 50 bundle elements we then evaluate feasible revenue sharing schemes including equal sharing proportional sharing and the modified shapley value of ginsburgh and zang 2003 2004 we first document that the shapley value is highly incentive compatible all bundle elements fare better inside the bundle than they do outside on a standalone basis we then evaluate the feasible schemes according to both their incentive compatibility and their similarity with the shapley value we find not surprisingly that the feasible schemes are less incentive compatible than the shapley value among the feasible schemes the gz scheme performs best while equal sharing performs worst

equilibrium product bundling this article offers an equilibrium theory of product bundling by rival firms in several models where a primary good is produced in a duopoly market and one or more other goods is produced under perfectly competitive conditions bundling is shown to emerge as an equilibrium strategy of one or both of the duopolists for its role as a product differentiation device when the rival firms can commit to bundling sales their profits are higher but social welfare is reduced copyright 1997 by university of chicago press

a graphical analysis of bundling by comparing the demand for a bundle and the vertical sum of the demands for its components this article analyzes the profitability and welfare consequences of bundling if it does not lower costs bundling tends to be profitable when reservation values are negatively correlated and high relative to costs if bundling lowers costs and costs are high relative to average reservation values positively correlated reservation values increase the incentive to bundle bundling and charging a price equal to the sum of the components prices lowers consumer surplus bundling can however increase consumer surplus when it results in lower prices copyright 1995 by university of chicago press

from end of pipe technology towards pollution preventive approach the evolution of corporate environmentalism in korea abstract this paper is concerned with the evolution of korean corporate environmentalism because korea has experienced dramatic economy growth and faced diverse environmental issues in recent decades it is a good place to think how the dominant environmental response of companies evolves using content analysis of industry journals as well as surveys and in depth interviews we found that korean companies have progressed through different eras of corporate environmentalism the ignorance era the compliance era and the strategic compliance era they have been changing their environmental responsive mode from an end of pipe approach to a preventive one since the early 1990s enforced regulations local community pressure and new knowledge and information for environmental management are the main forces of the environmental postures of korean companies during the 1990s in addition we confirmed that a pollution preventive approach results in a better environmental performance than an end of pipe approach although sustainable development is far off for korean companies they have quickly begun to turn their attention to pollution prevention and further environmental management as they face a new competitive environment

upgrades switching costs and the leverage theory of tying this article investigates the role of product upgrades and consumer switching costs in the tying of complementary products previous analyses have found that a monopolist of one product will not increase its profits and reduce social welfare by tying and leveraging its monopoly position into a complementary market if the initial monopolised product is essential where essential means that all uses of the complementary good require the initial monopolised product we show that this is not true in settings characterised by product upgrades and consumer switching costs we also discuss various extensions including the role of the reversibility of tying

product boundary vertical competition and the double mark up problem we develop a model in which a main product called product a provides a performance quality z by itself whereas a complementary product called product b is useless by itself but enhances the main product s performance quality to q z this asymmetric complementarity gives rise to the following results first if z is relatively small then firms a and b behave as if the products are symmetrically complementary with the usual double marginalization problem second if z is sufficiently large then firms a and b price their products as if they are independent third over a certain range of intermediate z no pure strategy nash equilibrium exists

add on pricing by asymmetric firms this paper uses an analytical model to examine the consequences of add on pricing when firms are both horizontally and vertically differentiated and there is a segment of boundedly rational consumers who are unaware of the add on fees at the time of initial purchase we find that consumers who know the add on fees can be penalized and increasingly so by the existence of boundedly rational consumers our consideration of quality asymmetries on base goods and add ons plus the inclusion of boundedly rational consumers leads to several novel findings regarding firm profits when quality asymmetry is on base goods only and with boundedly rational consumers add on pricing can diminish profit for a qualitatively superior firm and increase profit for an inferior firm i e a lose win result compared to when add on pricing is prohibited or infeasible when quality asymmetries exist on both base goods and add ons and without boundedly rational consumers the opposite win lose result prevails when quality asymmetries exist on both base goods and add ons and with boundedly rational consumers the result can be win win win lose or lose win depending on the magnitude of quality differentiation on add ons this paper was accepted by j miguel villas boas marketing

multiproduct monopoly commodity bundling and correlation of values through what selling strategy can a multiproduct monopolist maximize his profits when his knowledge about individual consumers preferences is limited one possibility extensively studied in the context of a single good monopoly is to use quantity dependent pricing as a means of discriminating among customers with differing tastes see for example oi 1971 and maskin and riley 1984 an alternative technique for price discrimination first suggested by stigler 1968 and analyzed further by adams and yellen 1976 is for the monopolist to package two or more products in bundles rather than selling them separately through a series of examples adams and yellen illustrate that bundling can serve as a useful price discrimination device even when all consumers willingnesses to pay for each of the goods individually are unaffected by whether they are also consuming the other product a typical example is illustrated in figure i adapted from figure iv in adams and yellen where there are two goods three consumers ab c who consume at most one unit of each good with reservation values for each good that are independent of whether the other good is consumed and zero costs of production there a bundle offered at a price of 100 fully extracts all potential surplus which would be impossible pricing the goods independently unfortunately though these authors do not provide any general characterization of the circumstances in which bundling is actually a multiproduct monopolist s optimal strategy their examples however such as figure i create the impression that the profitable use of bundling

product complementarities capabilities and governance a dynamic transaction cost perspective the organization and governance of the transactions that comprise a bundling arrangement depend on the distribution of capabilities among firms and the amount of time during which the window of opportunity for earning rents is expected to remain open firms engaged in inter firm collaboration must undertake support transactions related to billing marketing customer support and product repair these support transactions differ from the core transactions that have traditionally been perceived as sufficient to provide a product bundle since support transactions create costs of their own the market may turn out to be an expensive means of governing collaborative arrangements undertaken for bundling purposes the telecommunications service sector provides an illustration copyright 1997 by oxford university press

how the source of the entrant s advantage limits entry deterring tying i revisit a simple model of entry deterring tyingexample 1 from whinston s 1990 seminal paperbut allow the potential entrant to have either a cost advantage or a willingness to pay wtp advantage relative to the incumbent i show that compared to the usual case in which the potential entrant is cost advantaged tying is less effective against an entrant with a wtp advantage because an entrant with a large wtp advantage may be able to induce the buyer to buy both the tied bundle and the entrant s product i also show that tying but failing to deter entry can be less costly when facing an entrant with a wtp advantage than when facing an entrant with a cost advantage for a firm facing uncertainty about for example the entrant s entry costs this makes tying a more attractive entry deterrence strategy against a wtp advantaged entrant these results shed light on the important policy question of which markets are most likely to be susceptible to entry deterring tying

bundling information aggregation and entry deterrence abstract this paper provides an explanation for bundling based on its information aggregation effect using bundling the monopolist can hide the information of each monopoly market by aggregating information we show that the monopolist chooses bundling in an early period because bundling removes potential competition in the following period

commodity bundling by single product monopolies consider two products that have independent demands in the sense that all individual buyers consider them neither substitutes nor complements then if the two products are priced separately the demand for either is independent of the price of the other in his classic analysis of block booking of feature films george stigler shows that it may be profitable for a monopoly seller of two such products to bundle them by requiring a buyer to take both in order to get either his work provides a rationale for tying arrangements that does not depend on technological or other dependencies among the products involved 2 adams and yellen extend the analysis of multiproduct monopoly with independent demands 3 they discuss two different bundling strategies pure bundling in which the seller only offers the products in fixed proportions and mixed bundling in which buyers may either buy the products separately or purchase a bundle with fixed proportions of each in this note i consider a single product monopoly and investigate the profit and welfare implications of bundling its product for some other

the transition to the sustainable enterprise abstract the sustainable enterprise is entering a new phase private enterprise engages in a shift from environmentally friendly production methods towards true sustainable entrepreneurship dealing both with quality and volume aspects of natural capital corporate governance changes at two levels first the internal governance of the firm alters as new environmental preservation demands come forward secondly the external governance of the firm changes as new initiatives need to be employed to ensure adequate and sustainable social technological and infrastructural conditions for production it is argued that the preservation of non reproducible key stocks of energy biodiversity and space requires new and special attention in the strategic management of the sustainable enterprise also it is shown that evolving ethical values of intergenerational equity demand a timely transition to new business practices finally a program for governments and enterprises to enhance progress towards the next stage of sustainable entrepreneurship is presented

optimal bundle pricing under correlated valuations abstract we study optimal pricing issues for a monopolist selling two indivisible goods to a continuum of consumers with correlated private valuations over the goods where the positive or negative correlation is modeled using copulas in the frechet family we derive explicit optimal pricing schemes and comparative statics results for various environments in our setting the optimal pricing schemes can take several forms including pure bundling partial mixed bundling and mixed bundling depending jointly on the degrees of asymmetry and correlation of the consumers valuations the explicit optimal pricing schemes also enable us to investigate whether and how the monopolist s profit can be further improved via random assignments

measuring and avoiding the bullwhip effect a control theoretic approach an important contributory factor to the bullwhip effect i e the variance amplification of order quantities observed in supply chains is the replenishment rule used by supply chain members first the bullwhip effect induced by the use of different forecasting methods in order up to replenishment policies is analysed variance amplification is quantified and we prove that the bullwhip effect is guaranteed in the order up to model irrespective of the forecasting method used thus when production is inflexible and significant costs are incurred by frequently switching production quantities up and down order up to policies may no longer be desirable or even achievable in the second part of the paper a general decision rule is introduced that avoids variance amplification and succeeds in generating smooth ordering patterns even when demand has to be forecasted the methodology is based on control systems engineering and allows important insights to be gained about the dynamic behaviour of replenishment rules