putting free riding to work a partnership solution to the common property problem the common property problem results in excessive mining hunting and extraction of oil and water the same phenomenon is also responsible for excessive investment in r d and excessive outlays in rent seeking contests we propose a partnership solution to eliminate or at least mitigate these excesses each of n players joins a partnership in the first stage and chooses his effort in the second stage under the rules of a partnership each member must pay his own cost of effort but receives an equal share of the partnership s revenue the incentive to free ride created by such partnerships turns out to be beneficial since it naturally offsets the excessive effort inherent in such problems in our two stage game this institutional arrangement can under specified circumstances induce the social optimum in a subgame perfect equilibrium no one has a unilateral incentive 1 to switch to another partnership or create a new partnership in the first stage or 2 to deviate from socially optimal actions in the second stage the game may have other subgame perfect equilibria but the one associated with the partnership solution is strictly preferred by every player we also propose a modification of the first stage which generates a unique subgame perfect equilibrium antitrust authorities should recognize that partnerships can have a less benign use by organizing as competing partnerships an industry can reduce the excessive output of cournot oligopoly to the monopoly level since no partner has any incentive to overproduce in the current period there is no need to deter cheating with threats of future punishments

statistical moments analysis of production and welfare in multi product cournot oligopoly abstract our context involves n cournot oligopolists producing m products at constant marginal costs when preferences are quasi linear we identify relationships between second moments of unit costs and second moments of firm level production for example a larger variance in unit costs of a product increases own output variance and the variance of any other output we also investigate how second moments of unit costs affect industry cost efficiency industry costs can rise if the wrong firm secures a cost reduction for quadratic preferences it is shown that zhao s zhao j 2001 a characterization for the negative welfare effects of cost reduction in cournot oligopoly international journal of industrial organization 19 455 469 3 4 march share criteria for an increase in unit costs to increase welfare extend to the multi product setting

the effects of taxation price control and government contracts in oligopoly and monopolistic competition abstract many government contracts with or policies towards oligopolistic sectors essentially involve private firms selling a given proportion or quantity of output to the government at a fixed price p r with the remainder being sold on the open market often this is combined with consumer rationing examples include cement and sugar in india and health housing and defence in many countries the paper investigates the effects of these schemes including sales and excise taxation on prices output and household welfare under oligopoly and monopolistic competition less government control reduced may raise prices and tax shifting can be above or below 100 percent

the impact of minimum wages on youth employment in portugal textabstractfrom january 1 1987 the legal minimum wage for workers aged 18 and 19 in portugal was uprated to the full adult rate generating a 49 3 increase between 1986 and 1987 in the legal minimum wage for this age group this shock is used as a natural experiment to evaluate the impact of the minimum wage change on teenagers employment by using a large firm level micro data set it is shown that by comparing the employment growth of 18 19 year old workers with their 20 25 year old counterparts one can identify the employment effects of the minimum wage hike the same comparisons are done with 30 35 year old workers this study finds that the rise in the minimum wage significantly reduced employment this conclusion is reinforced by evidence showing that these employment effects are concentrated in firms more likely to be affected by the change in the law

envy in mission oriented organizations according to the labor donation theory workers adhering to their firms mission are willing to donate a portion of their paid labor in this paper we study how workers fairness concerns limit the firm s ability to extract labor donation from its employees we find that in sectors where the firm s mission is important optimal contracts are such that high ability employees perceive their wage as less fair than low ability employees and they must be rewarded with an envy rent the opposite is true in sectors where the firm s mission does not play a relevant role we empirically test the predictions of the model using the german socio economic panel finding support for our theoretical results

apparent collusion and conjectural variations in differentiated oligopoly abstract the conjectural variations model has become the standard exposition of oligopoly theory although rivals assumed behaviour is not profit maximising one response has been models with consistent conjectures developed from rational expectations concepts this paper adopts another approach based on stigler s famous 1964 paper collusion is enforced by the threat of retaliating to price cuts but is imperfect because of their imperfect knowledge which limits the probability of retaliation or retaliation lags three models of imperfect collusion incorporating these features separately and in combination demonstrate the formal equivalence between the results of imperfectly policed collusion and proportional conjectural variations

asymmetric regulation of identical polluters in oligopoly models studies of optimal second best environmental regulation of identical polluting agents have invariably ignored potentially welfare improving asymmetric regulation by imposing equal regulatory treatment of identical firms at the outset yet cost asymmetry between oligopoly firms may well give rise to private as well as social gains a trade off is demonstrated for the regulator between private costs savings and additional social costs when asymmetric treatment is allowed asymmetry is indeed optimal for a range of plausible parameter values further it is demonstrated that for a broad class of abatement cost functions there is scope for increasing welfare while keeping both total output and total emission constant some motivating policy issues are discussed in light of the results including international harmonization and global carbon dioxide reduction

welfare reductions from small cost reductions in differentiated oligopoly abstract this paper compares the welfare effects of cost reductions in differentiated bertrand and cournot oligopolies using a linear demand system the paper provides the critical levels of output shares below which a small cost reduction by a bertrand or cournot firm reduces welfare it then shows that the critical value is larger under bertrand competition than cournot competition

collective bargaining and regional wage differences in spain an empirical analysis this article analyses the importance of labour market institutions and in particular collective wage bargaining in shaping regional wage differences in the spanish labour market using microdata from the spanish structure of earnings survey our results reveal that there are significant inter regional wage differences for similarly skilled workers these differences are present throughout the whole wage structure and can be explained by both competitive and non competitive factors such as insufficient competition in product markets in this context industry level collective bargaining plays a major role in accounting for regional wage differences a role that in the spanish case is enhanced due to its unusual regional dimension

unequal treatment of identical agents in cournot equilibrium oligopoly models where prior actions by firms affect subsequent marginal costs have been useful in illuminating policy debates in areas such as antitrust regulation environmental protection and international competition we discuss properties of such models when a cournot equilibrium occurs at the second stage aggregate production costs strictly decline with no change in gross revenue or gross consumer surplus if the prior actions strictly increase the variance of marginal costs without changing the marginal cost sum therefore unless the cost of inducing second stage asymmetry more than offsets this reduction in production costs the private and social optima are asymmetric

hospital price regulation and expenditure cap policy abstract in several european countries governments have chosen to put a global budget cap on health care expenditure this paper analyzes the strategies of the providers facing this policy and evaluates its effects on provider and patient surplus we consider this policy when it is applied to local monopoly hospitals and when it is applied to hospitals playing as cournot competitors using a two stage model to characterize the optimal expenditure cap policy taking the hospitals optimal responses as given we prove that this policy induces a level of welfare lower than the first best outcome however we show that a second best outcome may be achieved under this policy when the number of hospitals becomes large

the returns from schooling in a diversified rural economy controlling for the endogeneity of activity choice and considering both household head and family schooling we findevid ence of high returns from schooling in both crop andnoncrop activities as schooling levels increase the returns from schooling shift away from crop production failure to control for activity selection andfamily schooling is likely to result in biasedestimates of the returns from schooling in individual activities copyright 2000 oxford university press

the impact of education in rural ghana examining household labor allocation and returns on and off the farm most of the human capital literature pertaining to developing countries focuses on the returns to education in either farm work or wage work few studies examine how education affects the allocation of time between these activities this paper estimates the returns to education in farm and off farm work and consequently the role of education in determining the allocation of labor the results from this study show that off farm work has a much higher return to education than does farm work and suggest that this divergence in returns affects the allocation of labor in farm households between farm and off farm work

does human capital raise farm or nonfarm earning more new insight from a rural pakistan household panel this study explores how human capital affects farm household earnings using two tools to refine measurement of human capital effects first it employs a two sector model to allow the allocation of family labor between farm and nonfarm activities second it accounts for village fixed effects to evaluate whether results from panel data differ meaningfully from a cross sectional data analysis with local binary variables the results show that education has a negligible effect on farm earnings instead experience appears to be the principal channel by which human capital affects agricultural performance in a traditional rural setting our results also suggest that prior models that fail to separate nonfarm activities spuriously exaggerated the effect of education to the farm sector in addition typical cross sectional analyses that ignore fixed effects may cause the effects of education on rural household earnings to be significantly overstated the fact that panel data regressions accounting for village level fixed effects found only one instance of education raising earnings the effect of literacy on nonfarm income suggests that considerable heterogeneity may have been ignored in cross sectional data analyses especially ones that omitted village level effects

oligopsony and the distribution of wages we propose a simple model of wage dispersion arising from oligopsonistic competition in the labor market our model has workers who are equally able but who have heterogeneous preferences for non wage characteristics while employers have heterogeneous productivity characteristics we completely and explicitly solve for the equilibrium wage distribution and show that inside and outside forces interact in wage determination this interaction generates spillover effects of minimum wages in a manner which is consistent with the empirical evidence

competitive price discrimination we model firms as supplying utility directly to consumers the equilibrium outcome of competition in utility space depends on the relationship u between profit and average utility per consumer public policy constraints on the deals firms may offer affect equilibrium outcomes via their effect on u f rom this perspective we examine the profit utility and welfare implications of price discrimination policies in an oligopolistic framework we also show that an equilibrium outcome of competitive nonlinear pricing when consumers have private information about their tastes is for firms to offer efficient two part tariffs

multiproduct pricing made simple we study pricing by multiproduct firms in the context of unregulated monopoly regulated monopoly and cournot oligopoly using the concept of consumer surplus as a function of quantities rather than prices we present simple formulas for optimal prices and show that cournot equilibrium exists and corresponds to a ramsey optimum we then present a tractable class of demand systems that involve a generalized form of homothetic preferences as well as standard homothetic preferences this class includes linear and logit demand within the class profit maximizing quantities are proportional to efficient quantities we discuss cost passthrough including cases where optimal prices do not depend on other products costs finally we discuss optimal monopoly regulation when the firm has private information about its vector of marginal costs and show that if the probability distribution over costs satisfies an independence property then optimal regulation leaves relative price decisions to the firm

optimal asymmetric strategies in research joint ventures abstract this paper identifies an overlooked implication of models of research joint ventures initiated by d aspremont and jacquemin 1988 even though the aggregate r d cost of identical firms in a research joint venture would be lowest if they invested equally to reduce subsequent production costs nonetheless members may often enlarge their overall joint profit by making unequal investments such a strategy raises costs in the investment stage but may create more than offsetting benefits in the production stage since industry profits are larger there when the firms are of unequal size when the consideration leading to asymmetry prevails we find that in contrast to previous work a research joint venture can raise welfare even when there are no spillovers

on input market surplus and its relation to the downstream market game in order to analyze the welfare effects of price changes in input markets following for example a price fixing conspiracy economists have studied the relationship between the surplus measured in the input markets and the surplus in the output markets the latest results hinge on simplifying assumptions which are relaxed here by linking the input markets surplus question to another stream of literature which characterizes functions that oligopolists collectively yet unintentionally maximize it is shown that the area under the input demands is equal to the change in a function for which critical points coincide with the equilibria of the downstream game a particular case of these functions is the exact potential function afin d analyser les effets de bien etre des changements de prix dans le marche des intrants a la suite par exemple d une conspiration pour fixer les prix les economistes ont etudie la relation entre le surplus mesure dans les marches des intrants et le surplus dans les marches des produits les derniers resultats dependent de postulats simplificateurs qu on relaxe ici en reliant la question du surplus dans les marches des intrants avec un autre courant de la litterature specialisee qui caracterise les fonctions que les oligopoleurs collectivement mais sans en faire leur but avoue maximisent on montre que l espace sous les courbes de demandes des intrants est egal au changement dans une fonction pour laquelle les points critiques coincident avec les equilibres dans le jeu de marche en aval un cas particulier de ces fonctions est la fonction potentielle exacte

a note on cost arrangement and market performance in a multi product cournot oligopoly abstract model invariances have been used extensively to understand welfare and conduct consequences of firm heterogeneity in a one product cournot oligopoly nothing is known about the richer and more realistic context of firm heterogeneity in multi product cournot oligopoly in this note welfare in a two product cournot oligopoly is shown to increase decrease with an increase in correlation between unit costs when the outputs complement substitute in demand a more qualified correlation structure is required for the result to apply in a three product cournot oligopoly when products complement in demand

comparative statics for integrable nash equilibria abstract this paper derives comparative statics results for stable nash equilibria in integrable concave orthogonal games application of these results to cost curve shifts in the asymmetric cournot oligopoly immediately uncovers some apparently new comparative statics results

the determinants of nonfarm activities and incomes of rural households in mexico with emphasis on education abstract this paper presents the main results of a study of the effects of education as well as other household assets on the choice of activities and incomes of rural mexican households our study examines the various income sources as well as the education of the household s head and its members implications are drawn for rural education and development policies to promote rural nonfarm incomes and employment

a theory of oil igopoly cournot equilibrium in exhaustible resource markets with fixed supplies the emergence of an effective and powerful cartel in the international petroleum market has stimulated considerable effort among economists to develop models of pricing and supply behavior for this industry 2 this modeling task poses two basic difficulties first as in the standard oligopoly problem one must characterize the behavior of several sellers in a market aware of each other and of their effect on market price second there is here the added difficulty of treating the explicitly intertemporal nature of suppliers decision wherein a limited stock must be optimally allocated over time this paper studies the implications of the simplest non trivial postulates about these two aspects of the problem it is assumed that suppliers are non cooperative cournot nash players each of whom is imagined to select an optimal supply strategy taking as given the strategies of the others moreover it is hypothesized that the feasible strategies are limited to open loop paths chosen at the initial date to maximize the present value of profits in light of the paths of supply which the others have chosen 3 these basic postulates together with a few technical assumptions concerning the structure of resource demand permit one to demonstrate the existence of at least one non cooperative equilibrium concerning thisequilibrium we show that 1 the average and marginal return on resource stocks is inversely related to the size of a player s initial endowment 2 aggregate production decreases over time until all stocks are exhausted while firms with smaller stocks exhaust their supplies no later than firms with larger stocks do 3 the present value of price net of extraction cost declines over time 4 industry production maximizes a weighted average of intertemporal consumer s surplus and producers profits

market competition r d and firm profits in asymmetric oligopoly we investigate a cournot model with strategic r d investments wherein efficient low cost firms compete against less efficient high cost firms we findthat an increase in the number of high cost firms can stimulate r d by the low cost firms while it always reduces r d by the high cost firms more importantly this force can be strong enough to compensate for the loss that arises from more intense market competition the low cost firms profits may indeed increase with the number of high cost firms an implication of this result is far reaching as it gives low cost firms an incentive to help rather than harm high cost competitors we relate this implication to a practice known as open knowledge disclosure especially ford s strategy of disclosing its know how publicly and extensively at the beginning of the 20th century

welfare maximizing and revenue maximizing tariffs with a few domestic firms in this paper we compare the orthodox optimal tariff formula with the appropriate welfare maximizing tariff when there are a few producing or importing firms the welfare maximizing tariff can be very low voire negative in some cases while in others it can even exceed the maximum revenue tariff the relationship between the welfare maximizing tariff and the number of firms need not be monotonically increasing because the tariff is not strictly used to internalize terms of trade externality it is also used to manipulate cost asym metries between producing and importing firms welfare maximizing specific tariffs are never worse than their ad valorem counterparts jel classification f13 l13

the effects of the minimum wage on the employment and earnings of youth the employment and earnings effects of the minimum wage are estimated by parameterizing a hypothesized relationship between underlying market employment and wage relationships versus observed wage

quality heterogeneity and welfare abstract in a differentiated product oligopoly with linear demand an increase in the degree of quality heterogeneity across firms increases both aggregate profit and consumer surplus this result is robust to whether firms set prices or quantities

an analysis of cooperative research and development i analyze the effects of cooperative research whereby member firms agree to share the costs andfruits of a research project before they undertake it in this model industrywide agreements tend to have socially beneficial effects when the degree ofproduct market competition is low when there are r d spillovers in the absence of cooperation when a high degree of sharing is technologically feasible and when the agreement concerns basic research rather than development activities i show that a royalty free cross licensing agreement among any number offirms lowers the equilibrium level of innovation even though it increases the efficiency of r d through sharing

discontinuous distributions and missing persons the minimum wage and unemployed youth the employment and earnings effects of the minimum wage on youth are analyzed by parameterizing the relationship between the distribution of market wage rates individuals would receive in the absence of the minimum and the observed distribution with the minimum estimates are based on individual data most econometric analysis rests on the assumption that random variables have continuous distributions but government programs and legislation often impose constraints on individual choice so that empirically observed distributions are discontinuous the minimum wage has such an effect on the distribution of observed wage rates most analysis of the effect on the minimum however is based on inferences from aggregate employment data and disregards these effects to evaluate the results of the minimum wage it is necessary to take account if its effect on employment and its effect on wage rates our analysis accounts explicitly for the effects of the minimum on observed distributions of employment and wage rates and makes these effects an integral part of the process by which the employment and wage impacts of the minimum are estimated the effect of the minimum is commonly presumed to be greater the higher it is relative to the distribution of wages that would be paid in absence of a minimum indeed most time series and cross section analysis of the effects of the minimum are based on relationships between employment and the ratio of the minimum wage to an average or median wage often an average adult wage but sometimes the average wage paid to employed youth 2 our analysis differs from these approaches in at least two respects first it is based on individual wage and

pharmaceutical patents prices and welfare losses policy options for india under the wto trips agreement c oncerns on the effect of product patents on the prices of medicines have been acute in many developing countries which up to the entry into force of the world trade organisation wto agreement on trade related aspects of intellectual property rights trips in 1995 could and did disallow such patenting in their national patent laws with trips all members of and those seeking accession to the wto have to make available with limited exceptions both product and process patents in every sector including pharmaceuticals more specifically trips provides that all wto members have to receive product patent applications for pharmaceuticals from the date of establishment of the wto i e january 1995 it is important to note that even under the trips regime patents are to be granted only on applications received from 1995 onwards for new patentable pharmaceutical inventions thus prices of existing pharmaceuticals already on the market or even those covered by patent

how does india s rural roads program affect the grassroots findings from a survey in orissa this paper analyzes the effects of all weather rural roads on households net output prices education and health in a poor drought prone region of india of 30 villages originally surveyed in 2001 02 when two had such roads a further nine received them between january 2007 and december 2009 under the program pradhan mantri gram sadak yojana cross section comparisons involving all villages and before and after comparisons in the nine yielded these findings i net output prices were 5 per cent or more higher ii substantially fewer days of schooling were lost due to bad weather largely because teachers had fewer absences iii the acutely sick received more timely treatment and were more likely to be treated in a hospital than in the nearest primary health clinic and iv the respondents ranked the resulting benefits in the domains of health and education at least as highly as the commercial ones

quantitative restrictions and tariffs with endogenous firm behavior abstract this paper considers a foreign oligopoly which dominates an importing country s market with its exports of differentiated products it constructs a model where firm behavior is endogenously determined in an infinitely repeated game and it analyzes the impact of trade policies on market conduct and welfare optimal tariffs optimal quotas and optimal tariff quotas are characterized and compared one result is that quotas can enhance competition and increase welfare another result is that quotas can be superior to tariffs finally optimal tariff quotas are welfare superior to either tariffs or quotas alone

dominant firms price leadership and the measurement of monopoly welfare losses abstract the possible welfare losses associated with monopoly power have been the subject of numerous studies over a number of decades recent estimates seem to confirm the earliest estimates which suggested that such losses were relatively trivial this paper suggests that the basis of such estimates is questionable in particular it is argued that the familiar dominant firm price leadership model is not well suited to the task of estimating monopoly welfare losses more appropriate assumptions are identified and their implications for assessing the magnitude of potential welfare losses are illustrated

a comment on farmer education and farm efficiency a survey in a widely acknowledged study marlaine e lockheed dean t jamison and lawrence j lau presented a meticulous survey of studies investigating the effect of farmer education on farm efficiency in less developed countries in summarizing 18 different studies in 13 countries they concluded that education has a positive effect on efficiency and that on average 4 years of education results in a 7 4 improvement in output generally lockheed et al s study confirms a widely accepted view that education has a positive effect on farm productivity however a careful analysis of the empirical foundation of their study suggests the need for some skepticism about the conclusions drawn the estimated coefficients for the education variables in the production functions presented often are not statistically significant and in some cases show that education has a negative effect on farm efficiency for example if statistical significance is calculated at the 05 level only 22 of 39 equations 56 4 reported in lockheed et al s table 2 estimate a positive and statistically significant coefficient for the education variable the remaining 44 are either not significantly different from zero or are negative 2 separating the studies by geographic area reveals another interesting pattern in the studies namely how the expected result varies across regions latin america and asia are well represented in the sample with 13 and 22 studies respectively but only two of the studies are from africa 3 of the 13 latin american studies only three 23 1 are positive and significant at the 05 level for asia on the other hand over 77 3 17 of 22 show the expected result as for the two studies for africa one finds a negative effect of education on productivity and the other finds no significant effect this indicates that while there is evidence supporting the beneficial effect of education on productivity

tax progressivity income distribution and tax non compliance this article examines the determinants of tax non compliance when we recognise the existence of an imperfectly competitive tax advice industry supplying schemes which help taxpayers reduce their tax liability we apply a traditional industrial organisation framework to model the behaviour of this industry this tells us that an important factor determining the equilibrium price and hence the level of noncompliance is the convexity of the demand schedule we show that in this context this convexity is affected by the distribution of pre tax income the progressivity of the tax schedule and the way in which monitoring and penalties vary with income it is shown that lower pre tax income inequality as well as a less progressive tax code may cause more tax minimisation activities therefore the frequently advocated policy of reducing the highest tax rate may fail as a policy directed at improving tax discipline one way of offsetting the possible harm to tax compliance from a less progressive tax could be an adjustment of the penalty and monitoring functions

idiosyncratic shocks in an asymmetric cournot oligopoly abstract several authors have studied the impact of a marginal cost variation in the cournot model on consumers surplus firms profits and social welfare we unify and extend the results when all marginal costs change simultaneously hence we bring together two strands of literature respectively on mean preserving and subgroup common shocks the effect of any shock is decomposed into two parts an average impact ai and a heterogeneity effect he the former improves welfare if the inverse demand function is concave enough and the market is concentrated enough the latter when the diffusion of the shock is negatively correlated with the market share distribution finally we apply our decomposition to various special cases

technology asymmetries group algebra and multiplant cost minimization for a homogeneous good this article studies firm level production activities when the firm controls a plural number of plants through careful construction of cost function technology asymmetries we inquire into the ordinal structure of the production vector for multiplant cost minimizers when schur convexity of a reference pseudo cost technology is the principal functional assumption then ordinal concepts of technical asymmetries map into rank order on the equilibrium production vector under a more generalized characterization of the technical asymmetries a multiplant firm encounters group theory is used to map a cardinal concept of asymmetries into cardinal bounds on the optimum allocation

the degree of monopoly international trade and transnational corporations abstract using a simple model of production the paper focuses upon the impact of intra firm imports on the theoretical specification of the degree of monopoly and thereby on the functional distribution of income in particular it is shown that a rise in an industry s import penetration need not imply a fall in the degree of monopoly data for the united kingdom new motor car industry is used to assess the bias that results from ignoring intra firm imports when estimating the degree of monopoly it is also pointed out that an identical framework can be employed to analyse intra firm exports

option exercise games an application to the equilibrium investment strategies of firms under the standard real options approach to investment under uncertainty agents formulate optimal exercise strategies in isolation and ignore competitive interactions however in many real world asset markets exercise strategies cannot be determined separately but must be formed as part of a strategic equilibrium this article provides a tractable approach for deriving equilibrium investment strategies in a continuous time cournot nash framework the impact of competition on exercise strategies is dramatic for example while standard real options models emphasize that a valuable option to wait leads firms to invest only at large positive net present values the impact of competition drastically erodes the value of the option to wait and leads to investment at very near the zero net present value threshold copyright 2002 oxford university press

pass through in a concentrated industry empirical evidence and regulatory implications we estimate pass through with thirty years of data from a concentrated industry the empirical model accounts for oligopoly interactions yet facilitates estimation with aggregate price data robust statistical evidence supports that industry wide cost changes are more than completely transmitted downstream and that this industry pass through is largely unaected by competitive conditions the industry in question portland cement is a major focus of environmental and antitrust regulators we use our pass through estimates to i evaluate the welfare consequences of marketbased co2 regulation ii predict the magnitude and location of price eects due to a merger under review by antitrust authorities and iii corroborate the simulation based analysis of the epa regarding its impending regulation of local pollutants

demand shifts and market structure in free entry oligopoly equilibria abstract this papers examines the structural implications of demand shifts in free entry oligopoly equilibria the model generalizes the conjectural variations framework to consider asymmetric firm conjectures allows for the possibility of cost differences across firms and endogenizes conditions of entry and exit in the industry in non competitive environments changes in incumbent output and industry profitability are inversely related to changes in the equilibrium price following a demand shift in response to rotations of demand through the equilibrium point changes in profitability are positively related to changes in industry concentration and when marginal costs are non decreasing inversely related to changes in market power

strategic behaviour of incumbent firms in the uk abstract the main purpose of this paper is to examine the incidence of strategic behaviour in the uk by means of a questionnaire study performed across three broad manufacturing industries food electrical engineering and chemicals of the strategies which have received substantial theoretical attention r d and advertising appear widely used patenting pricing and excess capacity much less so vertical instruments such as purchasing policy also stand out as important but possibly only a minority of firms in our sample actively pursue strategic instruments

welfare and non linear pricing in a cournot oligopoly a simple second degree price discrimination model involving nonlinear pricing of packets of a homogeneous product is shown to exhibit a welfare loss compared to the situation when nonlinear pricing is prohibited the result holds for a cournot oligopoly as well as monopoly further analysis considers the welfare loss from the market supplying too large a packet copyright 1991 by royal economic society

access to water women s work and child outcomes abstractpoor rural women in the developing world spend considerable time collecting water do women living in places where more time is needed for water collection tend to participate less in income earning market based activities do the education outcomes of their children tend to be worse we use micro data for nine developing countries to help address these questions our primary aim is to describe the patterns in the data rather than to infer causality although we do treat the household level access to water as endogenous assuming that community level access is exogenous conditional on a wide range of geographic factors better access to water is not found to be associated with greater off farm paid work but is associated with less unpaid work for women in countries where substantial gender gaps in schooling exist both boys and girls enrollments also tend to be better

oligopoly and welfare a unified presentation with applications to trade and development abstract we develop a unified sequence of models to examine the determinants of price output profitability and concentration for different kinds of oligopolistic market we relate various magnitudes of significance to judges of welfare and to policy makers such as consumer surplus profit or added benefits of employment or trade surplus to observable magnitudes such as the size and concentration of the market it emerges that various appropriately formulated herfindahl indices are useful in several of these relations we attempt to present results in a way that is useful for empirical investigations and pay particular attention to applications in trade and development

two remarks on cournot equilibria abstract we describe two simple results in the theory of cournot equilibria the first has to do with the effect of taxation in a cournot industry and the second describes under what conditions a cournot equilibrium will implicity maximize an objective function these results are probably known but are not well known and they seem useful enough to be worth spelling out

on the effects of the distribution of initial endowments in a nonrenewable resource duopoly abstract this paper studies the effects on equilibrium output and profits of modifying the resource endowments in a nonrenewable resource duopoly when the firms equilibrium terminal dates may differ

nontariff trade controls and leader follower relations in international competition a simple duopoly model is constructed in which leader follower relations arise as part of a subgame perfect equilibrium in a game of endogenous timing the author shows that in the absence of policy intervention cost asymmetries between firms can help sustain collusive hierarchical organization of markets on the basis of this model he then analyzes the effects of voluntary export restraints and import quotas in the presence of foreign and international duopolies the author s analysis reveals that in contrast to the existing literature these nontariff trade controls can break the stability of leader follower relations and thereby raise an importing country s welfare copyright 1996 by the london school of economics and political science

the effects of minimum bargained wages on earnings evidence from spain abstract this paper provides an empirical evaluation of the effects of spanish sectoral collective bargaining on wages for this purpose we use a sample of workers for whom bargained wage rates and earnings are available using a variant of the meyer and wise approach we are able to estimate wage gains due to minimum bargained wages and their employment effects the most relevant conclusion is that there is evidence of a sword of justice effect by unions but this is limited by non compliance among unskilled workers and the non binding nature of bargained wages for skilled workers

competition market selection and growth we study the effect of the competitive selection process on the economy s rate of growth in an extension of standard quality ladder models of endogenous growth we allow for the possibility that in each period several asymmetric firms representing an endogenously determined number of past innovators may be simultaneously active in an industry stronger competitive pressure then has conflicting effects on the incentive to innovate lowering prices but also selecting the more efficient firms we show that the market selection effect of competition always increases the incentive to innovate and find circumstances in which it can outweigh the traditional negative effect of lower prices

network effects market structure and industry performance abstract this paper analyzes oligopolistic markets with network externalities exploiting a minimal complementarity structure on the model primitives that allows for pure network goods we prove existence of non trivial fulfilled expectations equilibrium we formalize the concept of industry viability investigate its determinants and show that it improves with more firms in the market and or by technological progress these results enlighten some well known conclusions from case studies in the management strategy literature we also characterize the effects of market structure on industry performance which depart substantially from ordinary markets the approach relies on lattice theoretic methods supplemented with basic insights from nonsmooth analysis

youth labour markets in spain education training and crowding out abstract the stylised facts describing the poor performance of the youth labour market in spain over the last two decades entailing high unemployment rates for both higher and lower educated workers over education and low intensity of on the job training are explained through a simple matching model where higher educated workers crowd out lower educated ones from their traditional entry jobs in this model a combination of rigid labour market institutions and an increase in the relative supply of higher educated workers harms the training prospects of lower educated workers

when are nash equilibria independent of the distribution of agents characteristics author s bergstrom ted varian hal r abstract we present examples of nash equilibria that do not vary with the distribution of a parameter across agents and then offer a general theorem that characterizes this independence

cournot oligopoly with bargaining abstract the generalized nash bargaining solutions is used to model output decisions of rival firms in a cournot oligopoly expressions for price cost margins and the objective function that a cournot equilibrium implicitly maximizes are obtained as compared with the situation where firms maximize profits these are shown to involve additional cost terms

trade liberalization in oligopolistic industries the quota case abstract this paper analyzes the short and long run effects on domestic price and output of partially liberalizing quota restrictions in a general model of oligopolistic interactions it is shown that perverse outcomes are possible in a number of cases including that of rational conjectures a larger quota may result in an increase in domestic output in the short run and a higher price in the long run the relationship between oligopolistic conjectures and the number of firms in the industry is critical in determining the long run outcome