the social loss from imperfect competition the case of the swedish pulpwood market in this econometric analysis the swedish roundwood market is divided into two submarkets the sawtimber market which consists of many buyers and sellers and the pulpwood markets which consists of few buyers who collaborate in purchasing cartels the two markets are interrelated through cross price effects the main issue is to quantify the effects on social welfare if the pulpwood market were competitive the results show that a competitive pulpwood market should bring about a shift in the market structure in the sense that the pulp industry would expand its capacity at the expense of the sawmill industry copyright 1989 by the editors of the scandinavian journal of economics

spatial competition among multi store firms abstract the paper analyzes spatial cournot competition among multi store firms it demonstrates that the complex problem of determining equilibrium store locations for competing multi store firms can be approximated by a simple one in which each firm behaves as a multi store monopolist in choosing its store locations a firm s equilibrium store locations often coincide with its monopoly locations and in general converge to its monopoly locations as the demand grows larger when the firms have an equal number of stores the stores belonging to competing firms agglomerate at discrete points that coincide with each firm s monopoly store locations

quantity competition in a spatial model the authors analyze a duopoly model where firms first choose locations on a line segment and then choose quantities in the second stage pure strategy quantity equilibria fail to exist for locations close together for low transport costs near agglomeration occurs and the firms choose locations where pure strategy quantity equilibria exist as transport costs rise firms become less direct competitors as they move away from the center of the market coauthors are james f klein eytan sheshinski and steven m slutsky we analyse a duopoly model where firms first choose locations on a line segment and then choose quantities in the second stage pure strategy quantity equilibria fail to exist for locations close together for low transport costs near agglomeration occurs and the firms choose locations where pure strategy quantity equilibria exist as transport costs rise firms become less direct competitors as they move away from the centre of the market coauthors are james f klein eytan sheshinski and stephen m slutsky

oligopsony vertical integration and output substitution welfare effects in u s pulpwood markets oligopsonistic commodity markets can induce upstream vertical integration by the input demanders the associated price distortion can also induce output substitution by the commod ity s suppliers these phenomena are considered in the context of pulpwood markets in the u s the estimated welfare effects of an oligopsony distortion indicate relatively small deadweight losses but con siderable wealth transfers from open market pro ducers to integrated pulpwood processing firms correcting the distortion would have little effect on aggregate output levels from the forest sector but would alter the composition of output between in dustry and nonindustry sources jel q23 l13

foreign direct investment local content requirement and profit taxation we develop a partial equilibrium model of foreign direct investment fdi in which identical foreign firms locate themselves in a host country to compete in an oligopolistic market for a non tradeable commodity the host country assumed to be small in the market for fdi makes use of two instruments viz a profit tax and a local content requirement to compete for fdi in the international market we assume the existence of unemployment in the host country the structure of optimal instruments and their relationship to the number and the relative efficiency levels of the domestic firms are established

unit root hypothesis new classical and keynesian models abstract following perron econometrica 1989 57 1361 1401 the variables in the new classical and keynesian output equations are shown to be trend stationary therefore these models are evaluated for the united states with the standard non nested hypothesis tests the majority of these tests have rejected the new classical in favour of the keynesian approach

measuring oligopsony power with shadow prices u s markets for pulpwood and sawlogs empirical estimation of input market power hindered by problems in measuring an input s value of marginal product vmp by estimating a variable profit function system however one can infer a factor s vmp through its shadow price this technique is used here to specify a structural equation system which is estimated using time series data for the u s sawmilling and paper industries to empirically measure the degree of oligopsony power for sawlog and pulpwood inputs respectively results evaluated at sample means indicate that pulpwood markets are more oligopsonistic than sawlog markets though both perform closer to perfect competition than monopsony time trends for market power differ for each product and perfect competition cannot be rejected for sawlogs in later years copyright 1995 by mit press

spatial competition and spatial price discrimination the analysis of spatial competition under conditions of free entry which derives its major impetus from the seminal work of losch 1954 has been conducted in general on the assumption that the competitive firm will adopt an f o b pricing scheme see for example capozza and van order 1978 and holahan 1978 greenhut 1956 does consider some of the implications of discriminatory pricing within competitive markets but his analysis adopts an essentially short run view and provides little rationale for the choice of such a pricing policy by competitive firms this is in contrast with developments in the analysis of spatial monopoly the early work of singer 1937 and hoover 1937 and subsequent developments by for example greenhut 1956 beckmann 1976 beckmann and ingene 1976 greenhut and greenhut 1977 holahan 1975 and norman 1977 indicate that the spatial monopolist should adopt a discriminatory spatial pricing policy where spatial price discrimination is taken conventionally to mean that delivered prices do not follow an f o b scheme but that all concumers equidistant from a particular supplier pay the same price it is rarely however that the results generated by the analysis of spatial monopoly are reconsidered in the analysis of spatial competition in particular although we know that spatial price discrimination will in general increase a monopolist s profit the assumption that profit maximising spatially competitive firms will adopt f o b pricing schemes has rarely been questioned and has not been questioned within the loschian competitive framework greenhut and ohta 1975a chapter 8 and chapter 8 appendix i are notable exceptions but in both cases they depart from the loschian scheme the first objective of this paper is therefore to show that when loschian competitive firms are allowed the option of discriminatory pricing i e are free of institutional constraints which require f o b pricing they will be forced to exercise that option in order to maintain normal profits secondly we shall show that if competitive conditions change the form of price discrimination will also change and that under certain competitive conditions the degree of discrimination will increase with the degree of competition leading eventually to uniform pricing thirdly we compare two competitive cases with multi plant monopoly and derive the spatial analogue of the conventional spaceless monopoly perfect competition comparison the monopolist s plants will be larger in area and total output than each competitive firm but will supply less per consumer at a higher average price welfare comparisons are less clear cut in that they are dependent upon the type of competition we assume we show however that welfare maximisation requires marginal cost pricing where marginal cost includes transport costs and so requires f o b pricing if there are economies of scale to production it follows that welfare maximisation will require production subsidy

cournot competition yields spatial agglomeration most theoretical models of spatial competition show a strong tendency toward spatial dispersion of firms yet common observations suggest that firms tend to agglomerate in this paper the authors show that competition between cournot type oligopolists that discriminate over space leads to spatial agglomeration one implication is that firms do not necessarily earn supernormal profits at the free entry equilibrium copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

on the strategic importance of prices versus quantities in this article i investigate three single shot models of differentiated products oligopoly in each model firms choose both output and price the demand cost and spillover demand specifications are quite general and there are three main results first with simultaneous choice there is no pure strategy noncooperative equilibrium second with output chosen first and announced to all firms before the choice of price equilibrium sometimes exists and when it does it is the same as in a quantity only model third with price chosen and announced first equilibrium always exists and is the same as in a price only model

partial privatization in mixed duopoly abstract we investigate a quantity setting duopoly involving a private firm and a privatized firm jointly owned by the public and private sectors the private firm maximizes profits while the privatized firm takes both profits and social welfare into consideration we consider how many shares the government should hold in the privatized firm we find that neither full privatization the government does not hold any shares nor full nationalization the government holds all of the shares is optimal under moderate conditions

spatial price discrimination with heterogeneous products product heterogeneity is introduced into the context of spatial price discrimination many of the strong properties of the standard homogeneous goods case which are attained as a limit case here are shown to be no longer valid in particular the social optimum is no longer sustainable as a market equilibrium unless products are either identical or else very different

the nature of the adas model based on the islm model the aggregate demand and supply model adas is interpreted as a synthesis of the keynesian and neoclassical models it uses the islm model without explaining its nature to derive aggregate demand ad it is combined with an aggregate supply as curve to explain price inflation and output dynamics this paper argues that neither the ad nor as curve is conceptually the same as its microeconomic counterpart and adas is not a synthesis in fact adasimplies that discretionary policy is necessary and that price changes do not perform their traditional negative feedback function

product differentiation in spatial cournot markets abstract we introduce to the spatial cournot markets model the inverse demand function of deneckere economics letters 11 1983 37 that allows product differentiation the circular model s outcome alters depending on if goods are complements or substitutes while the linear model results in central agglomeration

does cournot competition yield spatial agglomeration abstract locations and quantities are chosen sequentially in spatial markets strikingly different location patterns emerge depending on the shape of the market in a circular city firms locate equidistant from each other in a linear city firms agglomerate at the center

consumer benefiting exclusive territories i investigate the effect of exclusive territories which are typical vertical controls imposed by upstream firms using shipping spatial models i consider an industry that consists of many independent local markets an upstream monopolist restricts competition between downstream firms using exclusive territories i find that exclusive territories reduce the prices of final products in all local markets in quantity setting competition in price setting competition they raise prices in half the local markets reduce them in other markets and also reduce the total consumer surplus jel classification l42 r32 a propos de territoires exclusifs qui profitent aux consommateurs l auteur analyse les effets de la regle des territoires exclusifs qui est souvent imposee comme controle vertical par les entreprises en amont a l aide de modeles spatiaux de livraison on considere le cas d une industrie composee de plusieurs marches locaux independants un monopoleur en amont reduit la concurrence entre entreprises en aval en imposant la regle des territoires exclusifs on decouvre que cette regle reduit les prix du produit final dans tous les marches locaux s il y a concurrence par les quantites s il y a concurrence par les prix la regle accroit les prix dans la moitie des marches locaux les reduit dans les autres et reduit aussi le surplus au consommateur

helping minor firms reduces welfare the effect on national welfare of uneven technical progress and eli mination of a firm is analyzed under the existence of a cournot oligopolistic sector an increase in the share of an inefficient firm owing to its innovations results in a shift of production from more efficient firms to the inefficient firm causing a less efficie nt allocation of production it may decrease welfare even though the innovation itself is beneficial conversely policies keeping ineffic ient firms from innovations or eliminating them may increase welfare though they make the market structure more oligopolistic copyright 1988 by royal economic society

partial agglomeration or dispersion in spatial cournot competition 1 introductionsince the seminal work of hotelling 1929 a rich and diverse literature on spatial competition has emerged location models can be classified into two types one type is shipping or spatial price discrimination model where sellers bear transport costs the other is shopping or mill pricing model where buyers pay for transport for each type one can have either bertrand type price setting or cournot type quantity setting 1most studies on location theory use shopping mill pricing models with bertrand competition although cournot and bertrand types of non spatial models are equally popular the body of literature on spatial competition that uses cournot type models is relatively small economists have recently considered shipping models with cournot competition hamilton thisse and weskamp 1989 and anderson and neven 1991 carry out pioneering works on location models 2 they use linear city models and show that all firms agglomerate at the central point pal 1998 shows that their result is crucially dependent on the assumption of a linear city he investigates a circular city duopoly model3 and finds that an equidistant location pattern appears in equilibrium that is locational dispersion appears 4 matsushima 2001a extends pal s model to an n firm oligopoly and shows another equilibrium where half of the firms locate at one point and the other half locate at the opposite point partial agglomeration these results indicate the multiplicity of equilibria in spatial cournot models with a circular city the multiplicity of equilibria restricts the applicability of the model because the model does not give us a distinct prediction in this article we take a close look at pal 1998 and matsushima 2001a we try to solve this problem by extending their linear transport cost model to one with nonlinear transport cost 5 we consider a simplified model the numbers of firms and markets and so possible locations are four four firms choose location a b c or d see if each of the four firms chooses a different location we call this outcome pal type if two firms locate at a and the other two locate at c we call this outcome matsushima type we find that the pal type equilibrium is much more robust because i pal type equilibrium always exists as long as transport cost is increasing in distance while matsushima type equilibrium fails to exist when the transport cost function is significantly convex or concave proposition 1 ii if firms choose their locations sequentially the unique equilibrium outcome is pal type under nonlinear transport cost functions proposition 2 and iii the profit of each firm in pal type is never smaller than that in matsushima type and the former is strictly larger if the transport cost function is nonlinear proposition 3 we also compare the welfare implications of pal type and matsushima type models if the transport cost function is linear the two outcomes yield exactly the same profits consumer surplus and total social surplus however this equivalence does not hold if the transport cost function is nonlinear either convex or concave in this case pal type yields greater total social surplus and profit of each firm while matsushima type yields greater consumer surplus these results indicate that the welfare implications are sensitive to whether or not the transport cost function is linear anderson and neven 1991 show that in the linear city model a strong concavity in transport cost changes the equilibrium outcome this result is related to our results but we emphasize that our results are different from theirs first we show that both concavity and convexity of the transport cost function affect the results while in anderson and neven 1991 only strong convexity changes the result second in our propositions 2 and 3 even a slight nonlinearity changes the results

cournot competition and spatial agglomeration revisited abstract in a letter previously published in this journal pal economics letters 60 1998 49 show that firms locate equidistant from each other in a circular city however we show that the following location pattern is also an equilibrium outcome firms agglomerate at two points in a circular city

anticompetitive vertical integration by a dominant firm backward vertical integration by a dominant firm into an upstream competitive industry causes both input and output prices to rise the dominant firm s advantage may or may not offset the negative effect of higher prices on social welfare whether it does depends on a simple indicator derived from input and output market shares and the degree of prior vertical integration a vertical merger is similar to a hypothetical horizontal merger suggesting that vertical merger policy for this industry should be similar to horizontal merger policy the dominant firm model yields an observable sufficient indicator of welfare improving vertical mergers copyright 1998 by american economic association

mixed oligopoly and spatial agglomeration abstract we investigate a mixed market where a state owned welfare maximizing public firm competes against profit maximizing private firms we use a circular city model with quantity setting competition in contrast to a pure market case discussed by pal 1998a spatial agglomeration of private firms always appears in equilibrium all private firms locate at the same point and the public firm locates at the opposite side we also find that this equilibrium pattern of the location is second best provided that output of each private firm cannot be controlled by the social planner jel classification h42 l13 oligopole mixte et agglomeration spatiale les auteurs examinent un marche mixte ou une entreprise publique possedee par l etat et cherchant a maximiser le niveau de bien etre est en concurrence avec des entreprises privees qui cherchent a maximiser leurs profits on utilise un modele de cite circulaire ou la concurrence se fait en choisissant la quantite produite en contraste avec le cas du marche parfait discute par pal 1998a l agglomeration spatiale des entreprises privees parait etre en equilibre toutes les entreprises privees se localisent au meme point et l entreprise publique se localise du cote oppose il appert que ce pattern d equilibre de localisation est un equilibre de second ordre compte tenu du fait que la production de chaque entreprise privee ne peut etre controlee par le planificateur social