a mixed oligopoly in the presence of foreign private firms in this paper a mixed oligopoly model is considered in which a state owned public firm competes with both domestic and foreign private firms previous articles on mixed oligopoly did not include foreign private firms the effect on the equilibrium involves a lower price and a different allocation of production relative to the case when all private firms are domestically owned in addition issues such as the effects of an open door policy allowing foreign firms to enter and the effects of foreign acquisition of domestic firms are discussed

innovation and imitation in a duopoly in a duopoly where one firm has the idea for a non patentable innovation the expected profits from the innovation will not be a monotonic function of the cost of innovating furthermore a costly innovation may be undertaken where an inexpensive one would not have been all other things being equal

incentives and barriers for wind power expansion and system integration in denmark in denmark expansion of on shore near shore and off shore wind power is planned to increase the wind power share to 50 of electricity consumption by 2020 in this situation a continuation of past policies will not suffice and a dual track incentive system that both establishes incentives for investing in wind power and integration infrastructure with integration between the electricity heating and transportation sectors is required the current danish taxation system discourages electricity use and works against this integration likewise the current day ahead electricity spot market is not appropriate for a high wind future as wind reduces price levels but integration across sectors can partly assist in increasing demand and prices the european emission trading system does not suffice in providing a level playing field for wind power and thus needs a revision another barrier for on shore and near shore wind power expansion is a growing citizens resistance due to an unequal distribution of benefits and burdens ownership should be open for more types of investors especially local investors in order to ensure public support and local acceptance of wind power projects the danish political system needs to address these issues in order to promote further expansion of wind power in denmark

consumption based approach to res e quantification insights from a pan european case study abstract the nexus between renewable electricity res e generation and interconnection is likely to play a large part in future de carbonised power systems this paper examines whether res e shares should be measured based on consumption rather than production with a european case study presented for the year 2030 the case study demonstrates the volume and scale of res e transfers and shows how countries have differing res e shares when comparing those derived based on the traditional production based approach to the alternative the proposed consumption based approach accounts for res e being imported and exported on an hourly basis across 30 european countries and highlights concerns regarding uncoordinated support mechanisms price distortions and cost inequality these concerns are caused by cross border subsidisation of electricity and this work proposes that an agency be appointed to administer regional res e affairs this agency would accurately quantify res e shares and remunerate producers from the country that consumed their electricity instead of where it has been produced policy would be enhanced by enabling more equitable and optimal electricity decarbonisation

cournot duopoly with two production periods and cost differentials abstract saloner 1987 analyzes a cournot model with two production periods before the market clears if costs do not vary across periods any point on the outer envelope of the reaction functions between the firms stackelberg outputs is attainable with a subgame perfect nash equilibrium spne saloner s analysis is generalized by allowing for cost differences across periods the continuum of equilibria vanishes for any cost differential if costs fall slightly over time there are multiple leader follower equilibria otherwise the model generates a unique spne where both firms produce their single period cournot outputs in the period when production is cheaper

unravelling of dynamic sorting we consider a two sided finite horizon search and matching model with heterogeneous types and complementarity between types the quality of the pool of potential partners deteriorates as agents who have found mutually agreeable matches exit the market when search is costless and all agents participate in each matching round the market performs a sorting function in that high types of agents have multiple chances to match with their peers however this sorting function is lost if agents incur an arbitrarily small cost in order to participate in each round with a sufficiently rich type space the market unravels as almost all agents rush to participate in the first round and match and exit with anyone they meet copyright 2005 wiley blackwell

stackelberg and marshall this paper advocates a generalized n firm stackelberg model as a plausible testable alternative description of oligopoly a pure strategy equilibrium must exist for this model the main result is that efficiency obtains in the limit as the scale of each firm is shrunk relative to demand this is demonstrated for the case of u shaped average cost and also for that of natural monopoly copyright 1990 by american economic association

strategic investment and timing of entry the authors introduce competition over entry time into a sequential output choice model to show how profit differences will be dissipated this resolves a problem in the standard stackelberg model that the order of moves is exogenously specified yet an earlier position in the order is usually preferred to a later one if capacity costs are not too low the authors solution applies even if firms cannot commit to sell their entire output introducing positive capacity costs slightly modifies the static stackelberg results since endogenous cost asymmetries arise the framework therefore partially rehabilitates the stackelberg model copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

endogenous timing in duopoly games stackelberg or cournot equilibria abstract simultaneous versus sequential play is studied in an extended game in a preplay stage players decide whether to select actions in the basic game at the first opportunity or to wait until observing their rivals first period actions in one extended game players first decide when to select actions without committing to actions in the basic game the equilibrium has a simultaneous play subgame unless payoffs in a sequential play subgame pareto dominate those payoffs in another extended game deciding to select at the first turn requires committing to an action both sequential play outcomes are the equilibria only in undominated strategies

technology diffusion and public policy a useful typology of technological change is provided by the schumpeterian trilogy invention the generation of new ideas innovation the development of those ideas through to the first marketing or use of a technology and diffusion the spread of new technology across its potential market until recently policy schemes in most oecd countries have tended to focus predominantly on the invention and innovation or science and r d end of this technology spectrum see e g limpens et al i 992 although it is generally realised that it is the process of diffusion or use of technology that creates productive potential and competitiveness policy initiatives have largely bypassed opportunities to improve the diffusion process if this may seem misplaced emphasis it does in fact reflect the state of the academic literature which is wide ranging and extensive as it relates to policies on r d but small and fragmented as regards policies on diffusion currently a gradual reorientation of policy direction toward diffusion seems to be taking place the us and uk governments for example have recently proposed major technology policy initiatives that despite differences in emphasis both stress the importance of creating an infrastructure conducive to a rapid spread of awareness and knowledge of innovations we argue that although sensible in themselves such policies may be too limited in scope and that a broader policy stance may be needed this paper has two main objectives the first is to provide an overview of why policy intervention in the diffusion process may be desirable and what form it might take this discussion is rather long since to the best of our knowledge there is no published systematic synthesis of the diffusion policy literature though see stoneman i987 for an earlier attempt the second aim is to look at actual diffusion policies and their impacts to make the task manageable we are restricting this paper to a discussion of the diffusion of new process technologies although similar issues apply to new consumer technologies these are not explicitly addressed we also consider diffusion policy only within the context of a given institutional and macroeconomic environment although it may well be that the supply of skilled manpower the nature of the capital market animal spirits and entrepreneurship fiscal and monetary policies will all impact upon the diffusion path improvements in these areas will also impact upon a whole host of other aspects of the economy s performance to use a plea for diffusion policy as a rationale for changes in such areas would be equivalent to the tail wagging the dog and thus they fall outside the remit of this paper

strategic investment under uncertainty a synthesis abstract investment is a central theme in economics finance and operational research traditionally the focus of analysis has been either on assessing the value of flexibility investment under uncertainty or on describing commitment effects in competitive settings industrial organization research contributions addressing the intersection of investment under uncertainty and industrial organization have become numerous in recent years in this paper we provide an overview aimed at categorizing and relating these research streams we highlight managerial insights concerning the nature of competitive advantage first versus second mover advantage the manner in which information is revealed firm heterogeneity capital increment size and the number of competing firms

marketplaces markets and market design marketplaces are often small parts of large markets and both markets and marketplaces come in many varieties market design seeks to understand what marketplaces must accomplish to enable different kinds of markets marketplaces can have varying degrees of success and there can be marketplace failures i ll discuss labor markets like the market for new economists and also markets for new lawyers and doctors that have suffered from the unraveling of appointment dates to well before employment begins markets work best if they enjoy social support but some markets are repugnant in the sense that some people think they should be banned even though others want to participate in them laws banning such markets often contribute to the design of illegal black markets and this raises new issues for market designers i ll briefly discuss markets and black markets for narcotics marijuana sex and surrogacy and the design of markets for kidney transplants in the face of widespread laws against and broader repugnance for compensating organ donors i conclude with open questions and engineering challenges

strategic timing of adoption of new technologies under uncertainty abstract in this paper we introduce experience effects into a duopoly game of timing of adoption of new technologies which exhibit exogenous technological progress departing from the existing literature with this model we obtain continuous and downward sloping reaction functions we find that a higher level of uncertainty increases the extent of dispersion between the equilibrium timings of adoption furthermore we find that the equilibrium timings are even more dispersed when the leader takes the follower s reaction into account when firm roles are made endogenous we find that if there is an incentive to lead follow the equilibrium timings are more less dispersed finally we show that it is possible for collusive adoption to improve welfare

learning and payoff externalities in an investment game abstract this paper examines the interplay of informational and payoff externalities in a two player irreversible investment game each player learns about the quality of his project by observing a private signal and the action of his opponent i characterize the unique symmetric equilibrium in a timing game that features a second mover advantage allowing for arbitrary correlation in project qualities despite private learning the game reduces to a stochastic war of attrition in contrast to the case of purely informational externalities all investments happen at the same real time instant irrespective of the sign of the correlation and beliefs never get trapped in a no learning region provided that the second mover advantage is sufficiently high

first versus second mover advantage with information asymmetry about the profitability of new markets is it better to move first or second to innovate or to imitate we show that if one player s information about the profitability of new markets is only modestly superior the possibility of foreclosing the market can lead to a first mover advantage on the other hand more extreme information superiority can reverse this leading to a second mover advantage knowing more surely what is the best choice the better informed player wants to delay to keep his information private and the less informed player wants to delay to learn because of this more accurate information can actually lead to inefficiency by increasing the incentive to delay and exogenous costs of delay can aid efficiency by neutralizing that strategic incentive in fact in some circumstances a player may purposely coarsen his information to deter imitation

modeling the dynamics of strategic fit a normative approach to strategic change this study develops and tests a dynamic perspective on strategic fit drawing from contingency and resource based arguments in the strategy and organizational theory literatures we propose a distinctive analytical approach to identify environmental and organizational contingencies that should predict changes in a firm s strategy and the performance implications of such changes we test our model using extensive longitudinal data from over 4000 u s savings and loan institutions during a period when many s ls considered changing strategic direction the findings support our model of dynamic strategic fit specifically we find that 1 the timing direction and magnitude of strategic changes can be logically predicted based on differences in specific environmental forces and organizational resources and 2 organizations that deviated from our model s prediction of dynamic strategic fit i e changed more or changed less than our model prescribed experienced negative performance consequences we conclude by discussing the implications of our approach and findings for future research on strategic fit and strategic change copyright 2000 john wiley sons ltd

strategic intrafirm innovation adoption and diffusion 1 introduction this paper addresses two empirical observations that are common in the extensive literature on innovation diffusion first a firm usually adopts an innovation over time not instantaneously that is there are intrafirm diffusions mansfield 1968 nasbeth and ray 1974 romeo 1975 stoneman 1981 1983 second the time path of an intrafirm diffusion has a predictable shape diffusion curves plot the extent of adoption against time and are generally s shaped that is they are initially convex reach an inflection point and then are concave thereafter often they are also skewed in that they are initially convex for less than half of the length of the diffusion this skewing can be so severe that the diffusion curve is essentially concave davies 1979 stoneman 1983 given the voluminous literature on innovation diffusion it is surprising that intrafirm diffusions have not received more attention with few exceptions noted below the theoretical literature assumes adoption is a discrete choice variable and so occurs instantaneously moreover empirical studies typically assume adoption occurs at the date of first use of the innovation by the firm to the extent intrafirm diffusions occur these studies clearly overestimate the speed at which the innovation is put into use and thus the speed at which its benefits accrue to the firm and society intrafirm diffusions are especially common in the case of capital embodied new process innovations because adoption involves adjustment costs as well as acquisition costs in a seminal study mansfield 1968 found that the time interval between 10 and 90 usage of diesel locomotives ranged from three to more than 14 years for firms in the u s railroad industry more recent examples abound most readers have undoubtedly experienced at least once the adoption of new computer equipment in their workplace from my own experience not all users are upgraded to the new equipment within a day a week or even a month hence in this paper i analyze the intrafirm diffusion of a new process innovation in a differential game model of an oligopoly the model s predictions are consistent with the empirical regularities noted above first an intrafirm diffusion occurs in equilibrium because the marginal cost of adoption is increasing in the rate of adoption it is not optimal to adopt instantaneously just as it is not optimal to adjust to the desired level of a stock instantaneously when adjustment costs are increasing at the margin second the equilibrium intrafirm diffusion curve is either s shaped or concave moreover this diffusion curve is more likely to be sshaped the more competitive the industry the larger the marginal cost of adoption or the preinnovation unit cost of production or the smaller the demand the analysis also shows a firm s diffusion is longer and so the extent of its adoption at any date is lower the more competitive the industry the larger the marginal cost of adoption or the pre innovation unit cost of production or the smaller the demand that is a diffusion is longer the smaller the incentive to adopt whether due to lower flow profit or higher adoption flow cost one surprising result is that an increase in the unit cost reduction from the innovation has an ambiguous effect on the intrafirm diffusion the reason is that there are two conflicting effects first as is obvious a larger cost reduction allows each firm to earn a larger flow profit at every date from the same rate of adoption however a more subtle effect is that it also allows the firm to earn the same flow of profit with a slower rate of adoption and so lower adoption costs that is the firms also have an incentive to spread out the diffusion over a longer period of time to save on adoption costs these results are important for two reasons first they show that diffusion curves are more likely to have an s shape for longer diffusions

adoption and diffusion of an innovation of uncertain profitability the argument has frequently been made that the pattern of diffusion associated with most new innovations will typically have certain characteristics a diffusion curve for an innovation is usually defined as the proportion of its potential users who have already adopted as a function of time measured from the first adoption many empirical studies by both economists and other social scientists have shown that diffusion curves nearly always have two distinct characteristics i they are s shaped the proportion adopted is an increasing function of time which is initially convex but eventually becomes concave and ii they tend to be right hand skewed the inflection point occurs at a time corresponding to a proportion adopted which is less than one half so that the function is concave over the greatest amount of time in fact this skewing is occasionally severe enough to make the diffusion curve appear concave everywhere the focus of most empirical studies of innovation diffusion has centered on identification of either the major determinants of the speed of diffusion or the characteristics of firms which determine how long they delay adoption the seminal contributions are griliches 6 study of hybrid corn and mansfield s 121 study of 12 industrial innovations these studies and most of the similar ones following conclude that diffusion is faster for innovations with higher profitability and that large firms tend to be the earliest adopters some studies e g mansfield 121 herregat 71 have attempted to ascertain

long term payoffs of near term low carbon deployment policies abstract recent climate change negotiations indicate that near term policies to address climate change are likely to vary across countries with countries employing a range of different policy options one option frequently mooted at the national level is to promote via policy the deployment of low carbon technologies promoting the deployment of low carbon technologies can involve a near term cost if such technologies are more expensive overall or require more upfront capital than emitting alternatives however it lowers future costs of emissions abatement by reducing emissions in the near term and potentially accelerating rates of improvement in targeted low carbon technologies we derive a globally cost effective near term international technology investment strategy to achieve a long term climate goal and show that it employs a diversified international technology investment portfolio across countries we also explore the degree to which independent national technology deployment policies align with collaboratively determined regimes we show that conditions exist under which there are substantial gains to international cooperation in the deployment of diverse low carbon technologies and also circumstances in which domestic outcomes align with the global outcome

regulation and preemptive technology adoption two rival firms must decide if and when to adopt a new technology knowing how adoption costs decline over time and how profit flows vary with adoption patterns in many cases price and entry regulations beneficially slow technology adoption by making preemption strategies less attractive in some cases these regulations can so discourage a firm from preemption as to change the order in which firms adopt new technologies speeding one firm s adoption date and slowing the other s in the context of a particular scenario for cable and telephone companies adoption of new fiber optic technologies the case for lifting the cross ownership ban depends on the extent to which telephone companies are able to implement a superior technology reregulation of cable companies strengthens this case

first movers non movers and social gains from subsidising entry in markets for nature based recreational goods abstract the importance of ecosystem services for mankind stresses the issue of identifying different institutional solutions to effectively secure their adequate provision much focus has been on services of the public good type and instruments like payments for environmental services we extend this work to consider the possible social gains from supporting development of new markets for nature based recreational goods which may alleviate negative externalities caused by congestion problems our three main questions are i why is there a lack of market development ii can there be social gains from intervention and supporting the development of such markets and iii if so then how could such intervention be best performed we use a two stage non cooperative bayesian simultaneous move game model and show that in spite of apparent potential first mover advantages in a developing market demand uncertainty and sunk costs may equally well result in widespread presence of non movers on the supplier side we show that social gains can be made from offering a subsidy towards the sunk costs analysing three possible subsidy schemes we show a that fixed costs may make rationing optimal b that sequential rationing does not necessarily dominate strict rationing because c the more subsidies are offered the larger each subsidy must be to induce participation and that d the longer a single agent on the market may keep market information to himself the better a non rationing scheme will perform relative to rationing schemes finally e subsidies for second mover entry may be optimal in some cases

supergrid or smartgrid competing strategies for large scale integration of intermittent renewables this paper defines and compares two strategies for integrating intermittent renewables supergrid and smartgrid while conventional energy policy suggests that these strategies may be implemented alongside each other the paper identifies significant technological and socio economic conflicts of interest between the two the article identifies differences between a domestic strategy for the integration of intermittent renewables vis a vis the smartgrid and a cross system strategy vis a vis the supergrid policy makers and transmission system operators must understand the need for both strategies to evolve in parallel but in different territories or with strategic integration avoiding for one strategy to undermine the feasibility of the other a strategic zoning strategy is introduced from which attentive societies as well as the global community stand to benefit the analysis includes a paradigmatic case study from west denmark which supports the hypothesis that these strategies are mutually exclusive the case study shows that increasing cross system transmission capacity jeopardizes the feasibility of smartgrid technology investments a political effort is required for establishing dedicated smartgrid innovation zones while also redefining infrastructure to avoid the narrow focus on grids and cables smartgrid investment trusts could be supported from reallocation of planned transmission grid investments to provide for the equitable development of smartgrid strategies

unraveling reduces mobility in a labor market gastroenterology with and without a centralized match the entry level market for american gastroenterologists was organized by a centralized clearinghouse from 1986 to 1996 before and since it has been conducted via a decentralized market in which appointment dates have unraveled to well over a year before the start of employment we find that both before and after the years in which the centralized clearinghouse was used gastroenterologists are less mobile and more likely to be employed at the same hospital in which they were internal medicine residents than when the clearinghouse was in use this suggests that the clearinghouse not only coordinates the timing of appointments but also increases the scope of the market compared to a decentralized market with early appointments

international expansion of emerging market enterprises a springboard perspective in this article we present a springboard perspective to describe the internationalization of emerging market multinational corporations em mnes em mnes use international expansion as a springboard to acquire strategic resources and reduce their institutional and market constraints at home in so doing they overcome their latecomer disadvantage in the global stage via a series of aggressive risk taking measures by aggressively acquiring or buying critical assets from mature mnes to compensate for their competitive weaknesses we discuss unique traits that characterize the international expansion of em mnes and the unique motivations that steer them toward internationalization we further delineate peculiar strategies and activities undertaken by these firms in pursuit of international expansion as well as internal and external forces that might compel or facilitate their propulsion into the global scene we finally explain the risks and remedies associated with this international springboarding strategy and highlight major issues meriting further investigation

mixed duopoly privatization and subsidization with excess burden of taxation we investigate optimal tax subsidy policies in mixed and private oligopolies with excess burden of taxation we compare the optimal subsidies and the resulting welfare levels among four regimes mixed and private cournot duopolies and stackelberg competition with public and private leaderships we show that in contrast to the existing works on the privatization neutrality theorem privatization affects resulting welfare duopole mixte privatisation et subsidisation en presence de fardeau fiscal excedentaire on examine les politiques optimales de taxes et de subventions dans le cas d oligopoles mixtes et prives en presence de fardeau fiscal excedentaire on compare les subsides optimaux et les effets sur le niveau de bien etre dans quatre regimes les duopoles de cournot mixte et prive et la concurrence a la stackelberg avec leadership public et prive on montre que contrairement a ce que suggeraient les travaux anterieurs sur le theoreme de la neutralite de la privatisation la privatisation affecte les niveaux de bien etre

looking into the danish energy system lesson to be learned by other communities abstract industrialization development and social transformation has brought together issues of over exploitation of limited energy resource base e g fossil fuel accelerated threats of energy insecurity and liberation of greenhouse gas emissions across the continents the global challenge for the 21st century and way ahead is to find other means of satisfying energy needs diversifying the energy supply up scaling the make up of renewable energy to a greater extent optimization of energy consumption and supply system denmark has been continuously moving towards optimization of energy production usage and its overall management during and even after the first global oil crisis the country has been delivering its priority in the development of renewable energy and standing the country an energy self sufficient from last three decades country s overall consumption of energy has decreased than that of the decades of 1980 and 1990s with wider range of energy mix and saving options the danish government has strategized to make the country fossil fuel free by 2050 where special attention and interventions is required to boost up its development of renewable energy in the country the past efforts of the danish government in the energy development has helped not only making the country energy self sufficient but also lowering the level of carbon dioxide in the atmosphere danish energy policy and strategies have been found more conducive and reflective of the joint eu priorities on the matter of dealing with climate change and energy security all the past progress and its allied policies seem to be quite supportive in fulfilling its strategies for greener future this review paper will discuss on the past efforts of danish government in energy management and highlights on some political initiatives which have been realised to support the country moving towards clean and green energy future

a theory of dynamic oligopoly ii price competition kinked demand curves and edgeworth cycles we provide game theoretic foundations for the classic kinked demand curve equilibrium and edgeworth cycle we analyze a model in which firms take turns choosing prices the model is intended to capture the idea of reactions based on short run commitment in a markov perfect equilibrium mpe a firm s move in any period depends only on the other firm s current price there are multiple mpe s consisting of both kinked demand curve equilibria and edgeworth cycles in any mpe profit is bounded away from the bertrand equilibrium level we show that a kinked demand curve at the monopoly price is the unique symmetric renegotiation proof equilibrium when there is little discounting we then endogenize the timing by allowing firms to move at any time subject to short run commitments we find that firms end up alternating thus vindicating the ad hoc timing assumption of our simpler model we also discuss how the model can be enriched to provide explanations for excess capacity and market sharing keiiwords tacit collusion markov perfect equilibrium kinked demand curve edgeworth cycle excess capacity market sharing endogenous timing

conceptualizing the acceptance of wind and solar electricity drawing from research interviews and the academic literature this article conceptualizes the conditions that promote investor confidence and the social acceptance of wind and solar sources of electricity it explores the factors influencing the acceptance of commercial wind turbines in denmark and india and residential solar panels in germany and the united states the article begins by justifying its selection of case studies and explaining the methodology behind its research interviews and field visits it then summarizes some of the key findings in recent surveys of public attitudes and market acceptance concerning renewable energy with a focus on why some investors and communities reject wind and solar systems whereas others rapidly approve and adopt them the article proposes that acceptance has multiple dimensions socio political community and market that must be met holistically in order for investors and users to embrace renewable energy the article argues that acceptance hinges upon the prevalence of nine factors the lack of such factors creates environments where they are rejected the theory is tested against four case studies that explore the forces driving renewable energy in denmark germany india and the united states

irreversible investment and r d spillovers in a dynamic duopoly investments in new production processes usually involve a significant amount of rd an increase in uncertainty delaying the equilibrium calls for higher subsidization rates third numerical simulations show that the spillover reduces the difference between the leader s and the follower s maximum value functions accordingly our model can help generate realistic market betas

innovation adoption and welfare under uncertainty the incentives of firms to adopt a new process need not coincide with maximum expected consumer surplus or social welfare if there is uncertainty before the process is adopted and if the only loss from failure is a fixed cost in some cases no firm will adopt an innovation likely to fail although expected welfare is maximized if one adopts in other cases both firms will adopt an innovation likely to succeed although expected welfare is maximized if one firm adopts this occurs because rivalry between firms leads them to adopt together when total expected profits are higher if one firm adopts copyright 1992 by blackwell publishing ltd

reputations in the adoption of a new technology abstract this paper studies the effects of uncertainty on the timing of adoption of a new technology in a duopoly firms are uncertain of the innovative capabilities of their rivals and about the profitability of adoption these features lead to a richer and in some respects more plausible theory of adoption in which rents from delayed adoption are always realized and returns are not equalized across adoption times

self fulfilling early contracting rush in markets for entry level professionals the insurance motive drives some participants to sign early contracts the rush to early contracting can be self fulfilling as both its effect on expectations about demand supply balance in the subsequent spot market and the effect on it from changes in the demand supply balance can be nonmonotone matching markets with more risk averse participants a greater uncertainty regarding relative supply of positions or a more polarized distribution of applicant qualities are more vulnerable to self fulfilling early contracting rushes employers can have a collective interest in preventing early offers to a few promising applicants from starting the rushes

von stackelberg and cournot duopoly choosing roles under what circumstances will firms agree on the choice of roles of leader and follower in the von stackelberg duopoly model a key determinant is the slope of the firms reaction function in either price or quantity space the duopolists will disagree over the choice of roles if they have downward sloping reaction functions each will prefer to be the leader they will also disagree if they have upward sloping reaction functions and similar profit functions each will prefer that the other be the leader preferences between von stackelberg and cournot outcomes are also considered

technological diffusion with social learning this paper attributes the slow diffusion of innovations to an informational externality in the adoption process the profitability of new technologies is uncertain but firing can learn progressively through observing the adoption experience of others given this prospect of social learning every firm would prefer that other firms adopt before it does in the absence of explicit coordination the firms could end up in a sequence of waiting contests this results in staggered adoptions even when all firms are ex ante identical the pace of diffusion is determined endogenously and shown to depend on the characteristics of the innovation copyright 1995 by blackwell publishing ltd

timing of investment under technological and revenue related uncertainties the effects of two forms of uncertainty on the timing of irreversible investment are considered technological uncertainty is modeled as a poisson arrival process that reduces the cost of investment while revenue uncertainty is modeled as a diffusion process technological uncertainty has no effect on the optimal investment policy when revenue uncertainty is absent however when combined with revenue uncertainty increased technological uncertainty makes investment less attractive relative to waiting the paper also makes a more general point in clarifying the difference in how diffusion type of uncertainty and unidirectional stochastic progress affect investment timing

privatization and efficiency in a differentiated industry we consider a market in which a public firm competes against private ones and ask what happens when the public firm is privatized in the short run privatization is harmful because prices rise the disciplinary role of the public firm is lost in the long run privatization leads to further entry the net effect is beneficial if consumer preference for variety is not too weak a sufficient statistic for the social surplus to be higher in the long run is that the public firm makes a loss this suggests that profitable firms should not necessarily be privatized

timing of investment and international expansion performance in china this study examines the multivariate and univariate performance effects of timing of fdi in an emerging economy at the business unit level a longitudinal analysis of industry wide firm specific data on fdi timing and foreign venture performance in china reveals that timing has a significant influence on overall as well as on individual aspects of venture performance it is observed that early entrants outperform late movers in terms of local market expansion and asset turnover whereas late movers are superior to early entrants with regard to risk reduction and accounting return during the initial period of international expansion factor analysis confirms that the importance of timing in affecting fdi decisions is as significant as that of internalization ownership or location factors

investment uncertainty and pre emption this paper examines irreversible investment in a project with uncertain returns when there is an advantage to being the first to invest and externalities to investing when others also do so we show that the possibility of pre emption can have significant qualitative and quantitative effects on the relationship between uncertainty and investment in a single agent real options model the trigger threshold for investment increases without bound as uncertainty grows in contrast the investment trigger of a leader faced with pre emption is bounded above as uncertainty increases in fact we show that under certain parameter values greater uncertainty can lead the leader to invest earlier these findings reinforce the importance of extending real options analysis to include strategic interactions between players applications to industry situations are also discussed

endogenous role in mixed markets a two production period model in this paper i investigate endogenous roles in a mixed duopoly where private and state owned public firms compete by allowing two production periods i find that many equilibria exist including the cournot type equilibrium and one stackelberg type equilibrium where the public firm becomes the follower however another stackelberg type equilibrium where the public firm becomes the leader does not exist if small inventory costs are introduced the unique equilibrium outcome becomes the stackelberg type where the public firm is the follower

a competitive theory of equilibrium and disequilibrium unravelling in two sided matching i offer a competitive explanation for the rush toward early contracting in matching markets the explanation does not rely on market power strategic motives or instability of the assignment mechanism uncertainty about workers ability will produce inefficient matching if contracts are formed early however the insurance gain from early contracting may outweigh the loss from inefficient matching if firms are risk neutral it is the mediocre firms that will have the greatest incentive to offer early contracts opening up a market for early contracting will generally benefit the firms and hurt the workers if firms are sufficiently risk averse even the lowest quality firms may want to offer early contracts and a competitive equilibrium may not exist

unraveling over time abstract unraveling the excessively early matching of future workers to employers leads to hiring decisions based on severely incomplete information we provide a model of unraveling in a one to one matching market without transfers its distinguishing feature is the gradual arrival of information about students that occurs over an extended period of time during which matches can be made in equilibrium the market spreads thinly over that period and employers attractiveness to students is uncorrelated with their worker s productivity our model connects previous seemingly unrelated models of unraveling and it highlights the implications of the two period assumption on which they rely our setting permits the analysis of information timing policies these are effective only if they provide a sudden and sufficiently large surge in information our main application is in the market for clerks to u s federal appellate courts a significant input into the efficiency of the justice system

second mover advantage and entry timing we describe a model of entry timing assuming that a second mover can benefit from observing the experience of a first mover we focus on how market attractiveness characteristics such as size and cost affect the time until first entry the effects depend on whether the number of participants is exogenous or endogenous in the former case a more attractive market leads to earlier entry in the latter case it leads to later entry treating the number of firms as an integer free entry leads to non monotone but testable effects of market attractiveness on entry timing

the collapse of a medical labor clearinghouse and why such failures are rare the collapse of the clearinghouse for the entry level gastroenterology labor market offers a unique opportunity to study the failures that sometimes afflict such markets to explore the reasons for the failure of the clearinghouse we conduct an experimental investigation of demand shocks of the kind that occurred in the gastroenterology market we find that a reduction in demand for positions leads to the collapse of the match only when it is detectable by firms before being detected by workers as in the unexpected shock that took place in 1996 which could be seen by firms in their reduced applicant pools simple demand and supply imbalances do not seem to interfere with the operation of the centralized match our results suggest that the market failed when applicants lost their ability to discern when they should reject an early exploding offer this suggests that the failure of the gastroenterology clearinghouse is related to the unraveling also seen in a number of decentralized markets

r d rivalry with licensing or imitation the authors study the rivalry between two firms to develop an innovation in a dynamic setting that allows for post development dissemination of the innovation such as licensing or imitation this dissemination may cause the noninnovating firm to benefit from the discovery when this occurs conventional results in the economics of r d no longer need apply they find that industry leaders will tend to develop minor innovations but will develop major innovations only if imitation is difficult copyright 1987 by american economic association

quantity setting oligopoly with endogenous sequencing abstract this paper investigates endogenous sequencing in a quantity setting oligopoly i formulate an n firm m period model where each firm chooses both how much to produce and when to produce it i find that at least n 1 firms simultaneously produce in the first period in every pure strategy equilibrium this result shows that the generalized stackelberg type outcome never appears in equilibrium except in a duopoly

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

preemptive patenting and the persistence of monopoly this article takes a different tack and inquires whether institutions such as the patent system create opportunities for firms with monopoly power to maintain their monopoly power the results apply to other situations such as brand identification spatial location and capacity expansion which share the characteristic that early or preemptive actions may lower the returns to potential competitors

game theoretic models of mixed oligopoly abstract in this paper we review various models that have been proposed for the study of mixed oligopoly that is markets in which private and public firm compete on equal basis using only market instruments

centralisation and decentralisation in strategic municipal energy planning in denmark denmark s future energy system is to be entirely based on renewable energy sources municipalities will play an important role as local energy planning authorities in terms of adopting and refining this vision in different local contexts based on a review of 11 municipal energy plans this paper examines to what extent municipal energy planning matches national 100 renewable energy strategies the results indicate a willingness among danish municipalities to actively carry out energy planning and the plans reveal a large diversity of new activities at the same time however there is a strong need for better coordination of municipal energy planning activities at the central level it is suggested that the role of municipalities as energy planning authorities needs to be outlined more clearly in e g strategic energy planning which integrates savings efficiency and renewable energy in all energy sectors this requires the state to provide municipalities with the necessary planning instruments and establish a corresponding planning framework consequently there is a need for a simultaneous centralisation and decentralisation during the implementation of the 100 renewable energy vision the paper outlines a basic division of tasks between the central and the local level within such a strategic energy planning system

corporate social responsibility or payoff asymmetry a study of an endogenous timing game we revisit an endogenous timing game by introducing corporate social responsibility into firms payoffs previous research investigates an endogenous timing game in a mixed oligopoly wherein one welfare maximizing public firm competes against profit maximizing private firms it shows that the outcome is completely different from that of private oligopoly in contrast to its result we find that this change in payoff does not matter as long as the payoffs are symmetric our result indicates that asymmetry and not welfare concerning objectives yields specific results in the literature on mixed oligopoly

clustering in n player preemption games we study a complete information preemption game in continuous time a finite number of firms decide when to make an irreversible observable investment upon investment a firm receives flow profits which decrease in the number of firms that have invested the cost of investment declines over time exogenously we characterize the subgame perfect equilibrium outcome which is unique up to a permutation of players when the preemption race among late investors is sufficiently intense the preemption incentive for earlier investors disappears and two or more investments occur at the same time we identify a sufficient condition in terms of model parameters clustering of investments occurs if the flow profits from consecutive investments are sufficiently close this shows how clustering can occur in the absence of coordination failures informational spillovers or positive payoff externalities

defending against rival innovation we analyze how an incumbent defends its competitive advantage with a focus on the under examined methods of actively defending against the threats posed by rival innovation we describe delineate and analyze the set of such defenses and their likely effects the set of such defenses differs substantially from many standard defenses such as those aimed at defeating the threat of imitation the further study of these pre emptive innovation defenses is important because these defenses are different and because they can substantially affect the sustainability of firm profits and the pace of different of types of innovation

do national level policies to promote low carbon technology deployment pay off for the investor countries abstract national level policies to promote deployment of low carbon technologies have been suggested and used as a means to reduce greenhouse gas emissions in the context of international climate change mitigation the long term benefits of such policies in the context of international climate change mitigation depend on their effects on near term emissions abatement and resultant long term technological change that will reduce abatement costs of achieving global mitigation goals there is also an argument that these policies might foster early mover advantages in international low carbon technology markets we first review the factors that could influence such benefits and use a global integrated assessment model to present an illustrative example to understand the potential magnitude of these benefits we find that reductions in long term abatement costs might not provide sufficient incentives to justify policies to promote the deployment of low carbon technologies in particular the emerging higher risk and currently expensive alternatives we also find that early mover advantages can potentially provide substantial benefits but only if these advantages are both strong and persistent our results suggest a role for international cooperation in low carbon technology deployment to address the existence of free riding opportunities in the context of global climate change mitigation

second mover advantages in the strategic adoption of new technology under uncertainty abstract this paper introduces technological uncertainty into a timing game of new technology adoption it is shown that the timing neither necessarily involves first mover advantages in precommitment equilibria reinganum review of economic studies xlviii 1981 395 405 nor rent equalization due to the threat of preemption fudenberg and tirole review of economic studies lii 1985 383 401 rather there may be second mover advantages because of informational spillovers furthermore the model predicts that the equilibrium payoffs will typically be discontinuous and non monotonic in the probability that the new technology is profitable a welfare analysis reveals several market failures and suggests that policy intervention should adequately depend on the nature of uncertainty and the rate of technological progress

mixed oligopoly privatization and strategic trade policy this paper investigates the effects of privatization in the presence of strategic trade policies within an international mixed oligopoly serving a single market if the government uses a domestic production subsidy then welfare is always increased with privatization while the optimal subsidy falls if the government uses an import tariff privatization increases welfare over much of the parameter space the optimal tariff however may rise or fall in recent years many countries around the world are privatizing their state owned industries at the same time many of these countries are also showing remarkable changes in their economic policies toward international trade on many occasions tariffs are significantly altered and domestic production subsidies are substantially reduced for example russia has privatized its aircraft industry and doubled its tariff on imported aircraft colombia has privatized its stateowned automobile maker colombia automotriz and reduced the import tariffs on foreign made cars in argentina the government is pursuing a policy of selective privatization and subsequent reduction of subsidies in western europe countries such as germany and spain have privatized their major airlines lufthansa and iberia respectively and significantly reduced subsidies what is the connection between privatization and strategic trade policies does privatization require a welfare maximizing government to alter trade barriers the objective of this paper is to answer these questions by investigating the interaction between privatization and strategic trade policies the effects of privatization are typically analyzed in the context of mixed oligopoly models where state owned welfare maximizing public firms interact with profit maximizing private firms 1 we investigate the interaction between privatization and strategic trade policies by incorporating strategic trade instruments in an international mixed oligopoly model specifically we consider two strategic trade instruments an import tariff and a domestic production subsidy the government chooses the optimal level of tariff or subsidy to maximize domestic welfare for each trade instrument we primarily focus on two questions first does privatization increase

flexible vs dedicated technology adoption in the presence of a public firm author affiliation maria jose gil molto department of economics university of leicester university road leicester le1 7rh england united kingdom m j gil molto le ac uk corresponding authorjoanna poyago theotoky dagger department of economics loughborough university sir richard morris building loughborough le11 3tu england united kingdom j poyago theotoky lboro ac uk acknowledgment we thank john beath nikolaos georgantzis rafael moner colonques vicente octs and two anonymous referees for their helpful comments all remaining errors are our own we also thank for financial support the spanish ministry sej2005 08764 econ and the british academy joint activities scheme 1 introductionin the recent past many firms all over the world have substituted their traditional production processes with more flexible systems some of these flexible technologies allow for greater capacity process flexibility which can increase the ability of firms to adapt to fluctuations in demand boyer and moreaux 1997 boyer jacques and moreaux 2002 in other cases the advantage of a flexible manufacturing system fms over dedicated equipment de is that the former allows a firm to supply several products and consequently to participate in different markets in other words to become a multiproduct or multimarket firm1 without having to invest in separated manufacturing processes this is called product flexibility and is the main focus of our paper apart from benefits flexible technologies also report higher set up costs mainly in the form of development or adjustment costs jaikumar 1986 the study of the adoption of fms by private firms was first introduced by roller and tombak 1990 and kim roller and tombak 1992 in the context of oligopolistic competition their findings indicate that the adoption of flexible technologies requires a sufficiently low adoption cost sufficiently high product differentiation and large enough markets while consumers benefit from the use of fms due to the increase in competition 2 in addition roller and tombak 1993 validate these results with an empirical study dixon 1994 evaluates the welfare effects of using fms when the marginal cost of production is increasing in the number of goods produced and when the markets are unrelated as a result adopting fms might lead to welfare losses due to the inefficiency in production on the other hand eaton and schmitt 1994 point out that the adoption of fms may correspond to preemptive strategies leading to higher levels of concentration in the context of horizontal product differentiation to the best of our knowledge the issue of technology choice as exemplified by the adoption of fms versus de technologies has not been studied in the context of a mixed market where private profit maximizing firms coexist with public not for profit ones such mixed markets are quite prevalent in transition economies but not exclusively so telecommunications health services and the postal sector in many countries are organized as mixed markets although many public firms have been privatized in recent years it is worth pointing out that the behavior of these recently privatized firms remains subject to public regulation our analysis is motivated by a large number of industries in which multiproduct and single product firms coexist and the presence of public or newly privatized but still regulated firms is common this is the case for industries such as energy supply transport telecommunications or health care first consider the case of telecommunications traditionally the provision of internet access telephone and tv services required the use of different technologies and separate production processes for each one of them at present however cable technology can be used by firms to provide these three different services using the same production process thereby enabling firms to be present in all three markets and to exploit economies of scope

on the diffusion of new technology a game theoretic approach this paper is an attempt at a rigorous albeit not exceedingly general analysis of the diffusion of new technology in particular consider an industry composed of two firms each using the current best practice technology the firms are assumed to be operating at nash equilibrium output levels generating a market price given demand and profit allocations when a cost reducing innovation is announced each firm must determine when if ever to adopt it based in part upon the discounted cost of implementing the new technology and in part upon the behavior of the rival firm if either firm adopts before the other it can expect to make substantial profits at the expense of the other firm on the other hand the discounted sum of purchase price and adjustment costs may decline with the lengthening of the adjustment period as various quasi fixed factors become more easily variable therefore although waiting costs the firm more in terms of foregone profits it may save money on the cost of purchasing the new technology thus the firm must weigh the costs and benefits of delaying adoption as well as take account of its rival s strategic behavior

dynamic patent licensing abstract this paper shows one way a fixed fee can dominate an auction if no one knows whether the innovation will succeed or not when it appears and if its life exceeds the life of the patent then selling one licence by fixed fee maximizes inventor profit for some probabilities of success the reason is a nonlicensee is better off when a rival buys a license because this reveals the nature of the innovation if it succeeds the nonlicensee can adopt in the future after the patent has expired this expected future gain can outweigh the expected loss during the life of the patent

impact of bayesian learning and externalities on strategic investment we investigate the interplay between learning effects and externalities in the problem of competitive investments with uncertain returns we examine a game theoretic duopoly investment model in which i a firm can learn about the profitability of the investment by observing the performance of the first mover and ii externalities exist between the investments of two firms we find a region of a war of attrition between the two firms in which the interplay between externalities and learning gives rise to counterintuitive effects on investment strategies and payoffs in particular we find that contrary to the conventional war of attrition where an increase in benefits for the follower generally delays the first move an increase in the rate of learning which tends to benefit the follower can hasten the first investment this paper was accepted by james smith decision analysis

preemption and rent equalization in the adoption of new technology we study the adoption of a new technology to illustrate the effects of preemption in games of timing we show that the threat of preemption equalizes rents in a duopoly but that this result does not extend to the general oligopoly game if the gain to preemption is sufficiently small then the optimal symmetric outcome which involves late adoption is an equilibrium this contrasts with reinganum s result that in precommitment equilibria there must be diffusion we develop a new and richer formalism for modeling games of timing which permits a continuoustime representation of the limit of discrete time mixed strategy equilibria

dynamic competition and intellectual property rights in a model of product development we study innovation timing and socially optimal intellectual property rights iprs when firms facing market uncertainty invest strategically in product development if demand growth and volatility are high attrition occurs and iprs should ensure the cost of imitation attains a lower bound we identify if demand growth and volatility are low then provided that the private imitation incentive is socially excessive iprs should set the cost of imitation high enough to induce preemption and possibly winner take all preemption moreover the welfare achieved with optimal iprs is then greater with endogenous innovation than if firm roles are predetermined illustrating the importance of fostering dynamic competition in extensions we show how firms benefit from open standards takeovers have ambiguous welfare effects and simple licensing schemes are welfare improving

stackelberg competition with endogenous entry i characterise endogenous market structures where leaders have a first mover advantage and entry is endogenous leaders are always more aggressive than the followers independently from strategic substitutability or complementarity under quantity competition leaders produce more than any follower and i determine the conditions for entry deterrence high substitutability and non increasing marginal costs under price competition leaders set lower prices than the followers the opposite than with an exogenous number of firms in contests leaders invest more than each follower in all these cases a leadership improves the allocation of resources compared to the nash equilibrium with endogenous entry this article studies endogenous market structures where a firm has a first mover advantage in the sense of stackelberg 1934 on the other firms and entry in the market is endogenous the article characterises the equilibrium of these endo genous market structures and provides welfare analysis for some of the applications these market structures emerge in many sectors which are substantially competitive a fringe of firms is ready to enter whenever there is a profitable opportunity but where some incumbent firms have a competitive advantage over the followers because of technological historical or legal reasons or just because entry was not possible at an earlier stage and choose their strategies before them 1 while symmetric models of strategic interactions have been widely studied in the presence of endogenous entry in a marshallian tradition 2 traditional models with incumbent firms facing a competitive fringe of entrants have been mostly limited to the analysis of markets with homogeneous goods and entry deterrence for instance in the theories of limit pricing and of contestable markets baumol et al 1982 more recently vives 1988 has analysed games with sequential entry of multiple firms but without endogenising the entry process see also anderson and engers 1992 1994

strategic investment in technological innovations abstract the aim of this paper is to determine the optimal timing of technology investment of a single firm in a duopoly framework as time passes different technologies are invented which after sometime become available for the firm to adopt the question here is not only when a firm should invest but also which technology should be adopted for different scenarios the optimal technology investment decision is determined outcomes range from pre emption equilibria to equilibria with second mover advantages

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

endogenous timing in a mixed oligopoly abstract endogenous order of moves is analyzed in a mixed oligopoly where the firms first choose the timing for choosing their quantities the results are strikingly different from those obtained in a corresponding oligopoly with all profit maximizing firms

patent litigation as an information transmission mechanism patent litigation reveals important information about the validity of the contested patent to other potential entrants this paper explores the implications of such informational externalities for entry dynamics in the presence of multiple potential entrants the nature of the entry game can be one of either waiting or preemption depending on the degree of patent protection therefore the payoffs for the patentee and the initial imitator are discontinuous in the degree of patent protection furthermore strengthening intellectual property rights is not necessarily desirable for the patentee the analysis may also help explain the apparently puzzling practice of delaying patent suits copyright 1998 by american economic association

a dynamic game of r and d patent protection and competitive behavior a theory of dynamic optimal resource allocation to r and d in an n firm industry is developed using differential games this technique represents a synthesis of the analytic methods previously applied to the problem static game theory and optimal control the use of particular functional forms allows the computation and detailed discussion of the nash equilibrium in investment rules this paper addresses the problem of resource allocation to research and development among the important issues that a firm engaging in r and d must evaluate are uncertainty regarding the feasibility and profitability of a particular innovation the possibility of a protracted development period the possibility that a rival firm may innovate first capturing either a patent or a significant share of the new market the possibility that a rival firm may imitate the innovation and appropriate some of the profits in the new market in what follows we will develop a theory of optimal resource allocation to research and development which incorporates the aspects of r and d enumerated above we will use a dynamic game theoretic analysis determining the nash equilibrium strategies for n identical firms the availability of perfect patent protection is shown to accelerate development of the innovation and the effect of increasing rivalry is addressed the impact of increasing rivalry on nash equilibrium investment in r and d depends upon the degree of appropriability of rewards if patent protection is perfect then increasing the number of nash rivals results in increased r and d effort however when imitation is rewarded the opposite may be true finally some notions of competitive and perfectly competitive equilibrium are examined in the context of the model developed below

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

endogenous leadership in a new market in this article i analyze strategic investment under uncertainty in a new market where firms face a tradeoff between commitment and flexibility the model predicts asymmetric equilibria under fairly general conditions even though firms are ex ante identical and have symmetric opportunities to enter the market in equilibrium one firm commits to early investment and the other firm follows a wait and see strategy in the ex post outcome firms end up with asymmetric sizes if the market profitability turns out close to or lower than expected firms end up in symmetric position if the market turns out highly profitable if uncertainty is small the model yields approximately stackelberg outcomes