advertising and prices as signals of quality in a regime of price rivalry abstract this paper addresses the issue of whether firms use price or advertising to signal quality and whether advertising has pro or anti competitive effects we show that when there is price rivalry advertising may be necessary to signal quality in contrast to single firm models signaling through price alone prevails for sufficient inter brand quality differentials joint price advertising signals prevail when the quality differential is small finally advertising in the form of variable rather than fixed costs is shown to increase the feasibility of signaling quality

can poorly informed regulators hinder competition this paper considers an entry deterrence game in which environmental policy is set without perfectly observing the incumbent firm s costs we investigate if regulators who can have an informational advantage relative to the potential entrant support entry deterring practices the paper demonstrates that while entry deterring equilibria only emerge under restrictive conditions when the regulator is perfectly informed these equilibria arise under larger settings as he becomes uninformed furthermore we show that the regulator is willing to support the incumbent s entry deterring practices regardless of his degree of information if entry costs are sufficiently high however when entry costs are lower the regulator only sustains this type of practices if he is poorly informed

imports of technology and the technological effort of indian enterprises abstract an important policy oriented question currently asked in some of the newly industrializing countries is whether their enterprises imports of technology discourage or enhance their own technological effort and whether the private benefits of the imported technologies differ from the social benefits this paper examines the question with reference to the experience of indian enterprises using multiple regression analysis it was found that these enterprises technological efforts are favorably affected in cases where the imports are intended to complement their technological effort rather than merely to produce new products but are discouraged if those enterprises have obtained an exclusive right of sale in the home market increases in the number of collaboration agreements and in enterprise size induce only an equiproportionate increase in the level of technological effort the evidence from the empirical analyses is then used to argue that the social benefits of the imported technologies are likely to be less than the private benefits

credible spatial preemption it is often argued that incumbent firms may deter entry by preemptive investment in new goods we show that these conclusions are reversed when multiproduct incumbentfirms may exit in response to entry once entrants are in an industry an incumbent will often want to withdraw some goods to prevent competition with the entrant from reducing profits on other goods such a reaction makes entry more attractive to a potential entrant the equilibrium industry structure is less likely to be monopolistic as the goods are better substitutes as exit costs are low and as the competition between producers of the same good is more intense

managing technological development lessons from the newly industrializing countries this survey looks at the technological development of the newly industrializing countries to draw some important lessons for firms and governments in other developing countries first inventing products and processes is not at the center of the technological development needed for successful industrialization it is at the fringe what is at the center is acquiring the capabilities needed for efficient production and investment second some countries have overemphasized the drive for technological self sufficiency and paid a high price in poor productivity what makes the best economic sense is to combine foreign and local technological elements and to do this in a way that progressively develops local capabilities in areas where they can be more efficient third the acquisition of technological capability does not come merely from experience though experience is important fourth the economic environment through its influence on the technological efforts of firms is very important in determining the productivity of a country s resources

technology imports and r d efforts of korean manufacturing firms abstract this paper analyzes the relationship between technology imports and r d efforts of korean manufacturing firms by a two stage method in the first stage using a sample representing the whole population of firms the paper shows that firms importing technology tend to commit themselves to r d efforts through having formal r d institutes in the second stage it shows that among firms with formal r d institutes technology imports have non complementary relationship with r d efforts moreover when technology imports are considered interactively with international inventive activity they turn out to have rather a substitutive relationship with r d efforts

location choice product proliferation and entry deterrence within a slightly modified version of hotelling s model we reconsider the claim that the threat of entry induces existing firms to produce a larger number of products than they would otherwise we show that entry deterrence although optimal need not be achieved through product proliferation in some cases the incumbent monopolist resorts to an entry deterring strategy based on location choice rather than product proliferation we also show that in some cases the number of products chosen by the incumbent facing the threat of entry is strictly greater than the minimum number required to deter entry

agglomeration advantages and capability building in industrial clusters the missing link accumulation of technological capability is crucial for industrial growth and competitiveness of firms particularly in the context of liberalisation and increasing international economic integration the article sheds new light on the forces driving capability building by complementing the micro economic perspective on learning with a meso economic perspective that takes account of interaction effects arising from firms embeddedness in regional networks the missing link at the interface between the two levels is explored by means of a taxonomy linking various agglomeration advantages to investments in technological effort the framework results in new policy relevant insights about the factors underpinning the acquisition of capabilities in comparison to conventional studies a case study about farm equipment manufacturing in pakistan s punjab province is used as an empirical illustration

technological effort and disembodied technology exports an econometric analysis of inter industry variations in india abstract this paper attempts a preliminary test of the determinants of indian technological capability as measured by disembodied technology exports by a sample of the largest private sector quoted companies in india after placing the study in the context of research on the nature of technological activity in developing countries the authors describe the variables which they have used to explain inter industry variation in technology exports the results of a preliminary statistical investigation are presented despite acknowledged limitations of data the authors are able to suggest some interesting tendencies which could be the subject of further investigation a formal rd b skill and scale requirements appear to promote technological development rather than retard it c the presence of foreign ownership does not seem to inhibit technological development or technology exports

the size distribution of innovating firms in the uk 1945 1983 a survey of 4 378 significant innovations shows that firms with fewer than 1 000 employees commercialized a much larger share than is indicated by their share of r and d expenditures innovations per employee have been consistently above average in firms with more than 10 000 employees and have become so in firms with fewer than 1 000 intersectoral variation in the size distribution of innovating firms can be explained as a function of r and d based technological opportunities and of technological ease of entry by user firms with principal activities outside the sector copyright 1987 by blackwell publishing ltd

oligopoly limit pricing we expand milgrom and roberts 1982 limit pricing model to allow for multiple incumbents each incumbent is informed as to the level of an industry cost parameter and selects a preentry price while a single entrant observes each incumbent s preentry price we find that incumbents are unable to coordinate deception which results in a separating equilibrium in which preentry prices are not distorted further introducing the refinement of unprejudiced beliefs we show that the no distortion equilibrium is the only refined separating equilibrium plausible pooling equilibria fail to exist or involve downward distortions in preentry prices

the importance of international business to the strategic agenda of u s ceos the growth of international business ib and concerns about the relevance of ib research indicate the need for managerial input on the topic a survey of 108 u s ceos reveals that ib issues are an important part of their strategic agenda four types of ib issues are identified which reveal that american ceos appear to be taking a proactive stance regarding the international arena the ceos were also found to hold diverse perceptions of ib issues the implications of these findings are discussed

the innovative performance of in house and contracted r d in terms of patents and utility models abstract the standard empirical framework for analysing the r d patents relationship is widened both by examining the different role of in house and contracted r d in the innovative performance of firms and by considering patents and utility models counts as measures of innovation output patents and utility models are considered to approximate for significant and incremental innovations respectively applying count data econometrics to a panel data set of spanish manufacturing firms surveyed in the period 1990 1996 a transcendental production function is estimated which allows for non constant elasticities of the r d inputs the results indicate that significant innovations are mainly gestated in house whereas contracted r d seems more orientated towards innovations of incremental nature

limit pricing when incumbents have conflicting interests abstract this paper considers entry into a market with two incumbents where one prefers entry and one dislikes it unlike the entrant incumbents know market demand in separating equilibria incumbents play full information nash equilibrium strategies when beliefs are unprejudiced separating equilibria only exist if entry is relatively unimportant for an incumbent in growing markets this condition will tend to be violated so that only pooling equilibria may exist

promoting technological capability in the capital goods sector the case of singapore abstract this paper contributes to the new interest in technological change in semi industrial countries by examining technological capability in the machine producing sector in singapore the difficulties involved in conceptualizing and measuring technological capability in less developed countries are discussed and the case study material is then presented particular attention is paid to the role of government promotion in the development of technological capability in this connection the present study provides a useful contrast with the position in hong kong studied in an earlier paper while both singapore and hong kong have instituted a near free trade regime there is a far greater degree of government intervention in the former than in the latter case by contrast the governments of both south korea and taiwan have granted selective protection in order to encourage some kinds of domestic machine production the paper ends with some critical comments regarding the singapore government s policy towards the machine producing sector

entry deterrence and the free rider problem the public good aspect of entry prevention is examined in an industry characterized by an established oligopoly facing a potential entrant although incumbent firms act noncooperatively underinvestment in entry deterrence does not occur and in fact incumbents may find themselves in a pareto dominated arrangement in terms of profits by preventing entry

international experience in the executive suite the path to prosperity attention is increasingly focused on the potential individual career and firm level benefits of international experience for upper level executives this research examines the relationships between ceo international experience ceo tenure firm internationalization succession events and corporate financial performance results indicate a significant interactive effect between ceo tenure and outside succession on ceo international experience in addition to a relationship with ceo international experience there are two additional interactive effects in the examination of corporate financial performance 1 ceo international experience and the degree of firm internationalization and 2 ceo international experience and ceo succession these interactive effects are evident in accounting and market indicators of corporate financial performance copyright 2000 john wiley sons ltd

the insurance is the lemon failing to index contracts we model the widespread failure of contracts to share risk using available indices a borrower and lender can share risk by conditioning repayments on an index the lender has private information about the ability of this index to measure the true state that the borrower would like to hedge the lender is risk averse and thus requires a premium to insure the borrower the borrower however might be paying something for nothing if the index is a poor measure of the true state we provide sufficient conditions for this effect to cause the borrower to choose a nonindexed contract instead

the impact of strategy on conflict a cross national comparative study of u s and japanese firms an empirical test of 290 u s and 653 japanese managers using the miles and snow typology provides a cross national examination of strategy s impact on conflict results substantially support the study s predictions and indicate that firms should 1 monitor their conflict handling mechanisms 2 emphasize integrative approaches and 3 appropriately use formalization for conflict handling despite a convergence of management practices globally findings indicate that considerable differences still exist between u s and japanese firms

signalling and entry deterrence a multidimensional analysis i consider whether a privately informed incumbent can use limit pricing and upward distortions in advertising to deter profitable entry profitable entry is not deterred when the incumbent is privately informed only about its cost type profitable entry may be deterred however if the incumbent is privately informed about its cost type and its patience level an equilibrium foundation is thus provided for the traditional hypothesis that limit pricing and aggressive advertising by an incumbent may deter profitable entry at a methodological level the article contributes by characterizing the refined equilibria of a signalling model with multiple dimensions of private information and multiple signals

capital as a commitment strategic investment to deter mobility abstract this paper analyzes how an early entrant in a market can exploit its head start by strategic investment the analysis is based on spence s paper investment strategy and growth in a new market bell j econ 10 1979 1 19 we frist study the investment game in the no discounting case which embodies the key features of mobility deterrence we establish the existence of a set of perfect equilibria and suggest that one particular equilibrium is most reasonable this equilibrium also valid with discounting involves the follower firm being forever deterred from investing to its steady state reaction curve in contrast to spence s proposed solution

almost efficient information transmission in elections abstract we study a model in which two parties compete by announcing their policies after receiving conditionally independent private signals about the true state of the world parties are both office and policy motivated our model can explain radically different policy positions even when parties receive identical signals and have unbiased preferences this holds in an asymmetric equilibrium in which both parties reveal their private information to the voters and the implemented policy is almost first best for all possible realizations of parties signals in this equilibrium one party adopts extreme and the other one moderate policy positions

monetary policy delegation and polarisation there is by now a comprehensive literature beginning with rogoff 1985 arguing that a government should delegate monetary policy to a central banker who is independent and more conservative than the government itself this will reduce the inflationary bias typically at the cost of stabilisation for a democratic society this result would suggest that the median voter should prefer that monetary policy is delegated to an independent central banker who is more conservative than herself typically the central banker is chosen by the government and the government is chosen by the electorate thus there is some albeit perhaps a weak link between the preferences of the electorate and the central banker although the central banker presumably should be chosen for a long period of time waller and walsh 1996 he has to be chosen at some point in time this paper contains a political economy model where the central issue in politics is the choice of central banker and

a theory of market structure with sequential entry this article sets out a theory of market structure with sequential entry we characterize the perfect nash equilibrium to the entry game in several propositions first equilibria never involve excess capacity second a sufficient statistic for the entry of any firm is that its profits are positive when computed myopically i e with no further entry third the equilibrium number of firms is the smallest number that can deter entry fourth aggregate output in equilibrium is no smaller than the limit output we calculate some explicit solutions to the model and examine comparative static properties

noncooperative entry deterrence uncertainty and the free rider problem previous authors who have considered the issue of noncooperative entry deterrence have not found the free rider problem to be a significant factor these authors however have only considered models in which the exact investment needed to deter entry is known with certainty in this paper i add uncertainty to the models investigated by these previous authors and demonstrate that the free rider problem can be significant but is not so in all cases that is for certain types of entry deterring investments the introduction of uncertainty causes the oligopoly to underinvest in entry deterrence however for other types no underinvestment result arises

oligopoly limit pricing strategic substitutes strategic complements abstract conditions are outlined under which it is a sequential equilibrium for firms to forgo current profit to reduce the likelihood of entry if firms are uncertain about rivals costs the assumptions about out of equilibrium beliefs that sustain such equilibria are more plausible if firms produce strategic substitutes than if firms produce strategic complements

learning and the capital goods sector under free trade the case of hongkong abstract attention is focused on technological change and attendant learning processes in the more industrialized third world countries the importance of relatively simple learning processes is stressed and the conditions necessary for facilitating more complex forms of learning particularly protection and promotion are examined here it is shown that the capital goods sector is of central importance the case study material deals with the machine producing sector in hong kong chosen as the representative case of free trade and minimal government intervention and comparison is made with learning processes in a number of other more industrialized third world countries including india argentina and taiwan in the final section the implications of the discussion of learning for theories and techniques of investment allocation including social cost benefit analysis the effective rate of protection and the related domestic cost of foreign exchange are examined

demand signalling and screening in channels of distribution this paper examines two ways channel members at the manufacturing and retail ends deal with asymmetric information in the context of new product introduction a manufacturer who has private information that demand for a new product will be high can differentiate itself from a manufacturer less confident of demand by undertaking high levels of pre launch advertising and offering a high wholesale price a retailer for its part can screen potentially high demand from potentially low demand products by stipulating a take it or leave it slotting allowance the assumption being that the offer will be accepted only by manufacturers confident of sufficient demand to recover the high initial cost of slotting allowances it is shown that manufacturers prefer to signal demand through advance advertising and wholesale price retailers to screen demand through slotting allowances it is shown that unless advance advertising is sufficiently effective slotting allowances yield higher total channel profits and higher social welfare

fostering the capital goods sector in ldcs abstract the conventional arguments in favour of the production of capital goods by ldcs are based on comparative advantage the possibility of designs appropriate to indigenous factor proportions and the externalities conferred on other sectors these and other arguments are inducing the governments of many middle income countries to more intensively foster the development of the machinery sector this paper examines the analytic and empirical bases of the conventional arguments and finds a considerably more complex picture than that contained in earlier studies

sequential entry industry structure and welfare in this paper we reexamine the relationship between potential competition industry structure and welfare in a market subject to a sequential entry threat where firms can make quantity commitments and have access to a constant returns technology it is shown that provided entry is not blockaded the incumbent s will either prevent entry or allow all the potential entrants in furthermore actual entry may decrease but social welfare never goes down with more potential entrants nevertheless with a finite number of potential entrants policies which lower the cost of entry need not be beneficial in welfare terms

optimal export policy in the presence of informational barriers to entry and imperfect competition abstract this paper examines government intervention to help exporters overcome informational barriers to entry into foreign markets foreign consumers know the quality of a local good but not that of the imported substitute an exporter who chooses high quality needs to signal this choice to foreign consumers via a high introductory price export policy affects both the signaling distortion and competition between exporter and incumbent the signaling distortion may call for an export subsidy competition for an export tax which policy is adopted in equilibrium depends on industry characteristics over time the export tax tends to rise as the signaling distortion disappears

relevance in international business research a need for more linkages the bi annual presentation by the outgoing aib president has become traditional it is not only an honor but also an unusual opportunity to address an audience composed of international experts in all areas relating to international business it is also a perplexing challenge to choose a topic that should be of general interest without departing too much from one s own field of specialized interest fortunately the aib officers agreed on a theme for this year s meeting relevance in international business research which presented me a topic to discuss

elections with privately informed parties and voters this paper studies a situation in which parties are betterinformed than voters about the optimal policies for voters weshow that voters are able to infer the parties information byobserving their electoral positions even if parties have policypreferences which differ substantially from the median voter s unlike previous work that reach opposite conclusions we assumethat voters have some private information of their own if theinformation available to voters is biased parties attempts toinfluence voters beliefs will result in less than fullconvergence even if parties know with certainty the optimalpolicy for the median voter

acquisition of technological capability in development a quantitative case study of pakistan s capital goods sector there is by now a substantial body of literature that points to the importance of technological capability acquisition for industrial development this literature however is almost exclusively based on qualitative case studies this paper addresses the lack of objective quantitative measurement and testing using data from a survey among capital goods manufacturers in pakistan it develops quantitative proxies for technological capability and various learning mechanisms that are believed to contribute to its emergence these are used in a regression analysis aimed at finding statistical support for the contention in the literature that capability results from an effortful learning process and at analyzing the main dimensions of that process

host country environment and subsidiary competence extending the diamond network model we extend the centers of excellence concept to address the diversity and multidimensionality of subsidiary competence using rugman and verbeke s diamond network model we hypothesize the contingencies influencing the links between host country environments and subsidiary competence configuration and provide evidence from more than 2000 subsidiaries in seven european countries our results provide new insights into how multinational enterprises can overcome unbalanced national diamonds by acquiring complementary capabilities across borders

pricing strategy quality signaling and entry deterrence abstract i investigate a pricing strategy that is aimed at deterring entry by applying a two period model of a durable goods monopolist there exists an incumbent that is of two types that is high and low quality types they differ in terms of their r d capabilities and the incumbent s type is assumed to be unknown to an entrant if the entrant decided to enter the market nash bertrand price competition ensues between the incumbent and the entrant i show that not only limit pricing but also prestige pricing signals the incumbent s quality type which serves to discourage entry in the prestige pricing the high quality type sells the products at an intentionally higher price i also show that although limit pricing is more desirable than prestige pricing from a social welfare viewpoint the incumbent can still choose prestige pricing

industry structure with sequential technology choice abstract noncooperative entry deterrence arises in a market where firms enter sequentially and irreversibly choose a technology in the case of delegated entry deterrence the earliest firms enter with a normal technology and pass on entry deterrence responsibilities to subsequent entrants in the case of partial entry deterrence the earlliest firms choose an inferior technology that allows some but not full entry of later firms with a normal technology in both cases entry is deterred in that the equilibrium number of firms is smaller than would prevail if all firms were to choose a normal technology

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

technology production and technology purchase in indian industry an econometric analysis an econometric analysis of the decisions of indian firms to invest in their own r d and to purchase technology through licensing agreements is undertaken these decisions are treated as being jointly determined by characteristics of indian industries indian prices and the supply of purchasable foreign technology the study finds that industrial structure firm size and public and private ownership influence the mix of own r d and technology purchase the pool of purchasable foreign technology indices both increased adaptive r d and technology purchase by indian firms copyright 1989 by mit press

the entry deterring effects of inflexible regulation this paper investigates the signalling role of tax policy in promoting or hindering the ability of a monopolist to practise entry deterrence we show that environmental policy can facilitate the incumbent firm s concealment of information from potential entrants thus deterring entry and yet entail welfare improvements furthermore we demonstrate that entry deterrence is more likely to arise when environmental regulation cannot be rapidly revised across time if market conditions change inflexible regimes than when regulatory agencies can adjust environmental policy over time les effets de dissuasion de l entree d une reglementation inflexible ce texte examine le role de signalisation d une politique fiscale qui promeut ou reduit l habilete d un monopole a pratiquer la dissuasion de l entree de concurrents on montre qu une politique environnementale peut faciliter la dissimulation d information par la firme en place vis a vis les concurrents potentiels et donc les dissuader d entrer et pourtant engendrer des ameliorations de bien etre de plus on montre que la dissuasion de l entree est davantage susceptible d emerger quand la reglementation environnementale ne peut pas etre revisee rapidement dans le temps si les conditions de marche se modifient regimes inflexibles que quand les agences de reglementation environnementales peuvent ajuster la politiques dans le temps

choosing among alternative technological strategies an empirical analysis of formal sources of innovation abstract this work aims to offer a detailed conceptual and empirical analysis of the inter firm differences in deciding the composition of their technological efforts using data for spanish firms in the period 1990 1996 the study begins with the standard analysis of the determinants of innovative investment then moves on to the less analysed question of the determinants of the generate versus import alternative and ends with a novel analysis of the characteristics which lead firms to organise research internally as compared to the possibility of contracting r d services externally in contrast to standard practice the econometric approach takes into account the existence of non linearities in the used data the results obtained support the conceptual ideas on which they are based

securitization and lending competition we study the eects of securitization on interbank lending competition when banks see private signals of local applicants repayment chances if banks cannot securitize the outcome is e cient they lend to their most creditworthy local applicants with securitization banks lend also to remote applicants with strong observables in order to lessen the lemons problem they face in selling their securities this reliance on observables is ine cient raises the mean default risk and may lead to a deceptive rise in credit scores

competition and confidentiality signaling quality in a duopoly when there is universal private information abstract we model non cooperative signaling by two firms that compete over a continuum of consumers assuming each consumer has private information about the intensity of her preferences for the firms respective products and each firm has private information about its own product s quality we characterize a symmetric separating equilibrium in which each firm s price reveals its respective product quality we show that the equilibrium prices the difference between those prices the associated outputs and profits are all increasing functions of the ex ante probability of high safety if horizontal product differentiation is sufficiently great then equilibrium prices and profits are higher under incomplete information about quality than if quality were commonly known thus while signaling imposes a distortionary loss on a monopolist using price to signal quality duopolists may benefit from the distortion as it can reduce competition finally average quality is lower since signaling quality redistributes demand towards low quality firms

when does environmental regulation facilitate entry deterring practices abstract this paper evaluates the welfare benefits of introducing environmental regulation in a market that is subject to the threat of entry we consider complete and incomplete information settings where potential entrants use the regulator s tax policy and the incumbent s output decisions in order to infer the incumbent s cost structure when the regulator is absent we show that firms entry deterring practices increase pollution relative to complete information hence under certain conditions environmental regulation becomes more beneficial in incomplete than in complete information contexts our results therefore identify under which cases an under or over estimation of the welfare benefits of environmental regulation arises from ignoring the information setting in which firms interact we also examine how this estimation error increases as firms become more symmetric in their production costs

entry deterrence and signaling in markets for search goods abstract this paper studies entry in markets for search goods signaling through prices is studied both when an entrant s quality is private information and when it is common knowledge to the entrant and incumbent when consumers visit a store they are assumed to observe quality and have the option of continuing to search but at a cost when search costs are low an entrant can signal high quality by setting a sufficiently high price so that consumers who find out that its quality is low visit the incumbent entry may be facilitated when search costs are sufficiently low or when the incumbent knows the quality of the entrant s product

the views of american multinational ceos on internationalized business education for prospective employees for some time a number of industry leaders have been exhorting american business schools to train their students in the aspects of international business as late as 1987 a group of prominent leaders from business labor academia and government issued a report that stated that business schools must internationalize the entire course of study and should include comparative business practices foreign languages and analyses of other countries and cultures

competition between insurers with superior information abstract we analyze markets where insurers are better informed about risk than consumers we show that even competitive markets may result in insufficient information revelation and inefficient insurance coverage this explains why certain risky consumers remain uninsured and why certain market segments are persistently profitable we also show robustness to competition in menus or mechanisms our analysis of the contrary of adverse selection competition between principals with common value and exclusivity is suitable for other markets lawyers doctors mechanics etc

oligopoly limit pricing in the lab we examine the behavior of senders and receivers in the context of oligopoly limit pricing experiments in which high prices chosen by two privately informed incumbents may signal to a potential entrant that the industry wide costs are high and that entry is unprofitable the results provide strong support for the theoretical prediction that the incumbents can credibly deter unprofitable entry without having to distort their prices away from their full information levels yet in a large number of cases asymmetric information induces incumbents to raise prices when costs are low the results also show that the entrants behavior is by and large bi polar entrants tend to enter when the incumbents prices are low but tend to stay out when the incumbents prices are high

strategic wholesale pricing in a supply chain with a potential entrant this paper develops an adverse selection model for a two stage supply chain with one supplier one retailer and a potential outside entrant supplier who makes a partially substitutable product the work is different from most research on entry deterrence that only considers a single stage model our main interest is to investigate how the incumbent supplier can strategically maximize her profit by a wholesale pricing policy when facing the potential entrant we focus on a model where the entrant supplier will sell her product through the same incumbent retailer we derive the optimal decisions for each player and study the comparative statics of the equilibrium to investigate how the supply chain structure may affect the deterrence strategy of the incumbent supplier we also consider three alternative models with different channel structures when both suppliers sell their products directly when the entrant has another independent retailer and when the entrant sells her product directly through the comparison we find that the existence of the common downstream retailer often enhances the deterring motivation of the incumbent supplier

search bargaining and signalling in the market for legal services over the last eight centuries lawyers in common law countries have generally been precluded from buying their clients cases recently a number of economists and lawyers have argued that sale should be allowed so as to eliminate moral hazard particularly when contingent fees are used this argument is based on full information reasoning however if the lawyer has private information about the case value then compensation demands potentially signal this value when the client can search over lawyers we provide a formal model and a family of computational examples that show that allowing possibly partial purchase can reduce expected social efficiency

international business education a corporate view as a preliminary step in the internationalization of business school curricula 122 major canadian corporations were surveyed for their views on the importance of various management skills and international courses as well as their opinion on the mechanisms institutions and academics for delivering them this article reports on the responses obtained and suggests methods for improving the overall effectiveness of international business education

advertising and limit pricing we enrich milgrom and roberts 1982 limit pricing model to allow an incumbent to signal his costs with both price and advertisements our fundamental result is that a cost reducing distortion occurs in that the incumbent behaves as if there were complete information but his costs were lower than they are preentry price is therefore distorted downward and demand enhancing advertising is distorted upward as a consequence of signalling if advertising is a purely dissipative signal it is not used nor therefore distorted recent refinements of the sequential equilibrium concept are featured

international business and trade in the next decade report from a delphi study the globalization of business causes major changes in the business environment and in business practices forecasting such changes is crucial for the preparation of responses to them this article reports on a delphi study conducted with a global set of experts drawn from the policy business and academic communities over three rounds of mailings these experts analyzed and debated the likelihood of changes in the international business environment over the next decade and the impact of these changes on corporate practices the findings identify key geographic areas of business growth major sectoral transformations shifts in the trade framework and its institution and strategies for corporate adjustment