expanding demand through price advertisement abstract retail stores frequently advertise prices when consumer search is costly advertising low prices expands the number of consumers who visit and buy we show that this demand enhancement may offset a retailer s loss in margins from the low price making advertisement desirable we further show that a multi product monopolist may choose to advertise low prices only for select products even when advertised and non advertised products are substitutes for duopolist retailers at a common location an equilibrium exists in which for some range of advertising costs one store advertises and the other free rides on its competitor

differential games with nonconvexities and positive spillovers abstract this paper deals with differential games characterized by nonconvexities and increasing returns the objective function of the players is convex in the control variables and nonconvex in the state variables we employ the open loop nash equilibrium solution concept this framework enables us to handle games characterized by positive spillovers and strategic complementarities e g capital accumulation differential games with learning by doing where the knowledge available to a firm is given by the knowledge accumulated by the economy as a whole

tourism demand forecasting models choice of appropriate variable to represent tourists cost of living abstract price is generally regarded as a major determinant of demand tourism has two price elements the cost of travel to the destination and the cost of living for tourists in the destination previous studies where econometric forecasting models have been developed for international tourism demand usually take the consumer price index in a country to be a proxy for the cost of tourism in that country owing to lack of appropriate data this article attempts to evaluate the performance of proxy variables compared with a specific tourists cost of living variable within the context of tourism demand forecasting models

multinomial logit market share models equilibrium characteristics and strategic implications we specify and analyze the conditions under which the mnl market share models are appropriate for equilibrium analysis our results show that a linear price response function as is often used in empirical research in conjunction with the typical concavity assumed in a large range of marketing response functions would yield an interior equilibrium solution we then consider the optimal reactions on pricing and marketing spending to entry and potential market expansion in the context of the mnl models we demonstrate that the entry of a new brand evokes a decrease in the equilibrium prices of the existing brands as a defensive reaction this is true in both an expanding market as well as a fixed market however while new entry into a fixed market would trigger the incumbents to lower the marketing expenditure we show that firms tend to raise marketing activities as they experience market expansion consequently there exist distinct possibilities that marketing efforts for the existing brands increase in view of entry in an expanding market further managerial and marketing implications for endogeneity of the number of firms are explored

plant closings and exit behaviour in declining industries the plant closing and exit strategies of firms operating in a declining industry are examined a dynamic game theoretic model is utilized the perfectness criterion is used to restrict the set of nash equilibria there are two key equilibrium results first when firms have the same number of plants high cost plants close before lower cost plants second a larger firm i e a firm operating more plants begins closing plants before a smaller firm as long as cost differences are not large copyright 1988 by the london school of economics and political science

investment incentives in procurement auctions this paper investigates firms incentives to invest in cost reduction in the first price sealed bid auction a format largely used for procurement two central features of the model are that we allow firms to be heterogeneous and that investment is observable we find that firms will tend to underinvest in cost reduction because they anticipate fiercer head on competition using the second price auction as a benchmark we also find that the first price auction will elicit less investment from market participants and that this is socially inefficient these results have implications for market design when investment is important different market institutions provide different incentives for firms to reduce costs acquire information expand and so on in short to undertake any activity that affects their competitive positions accordingly the performance of these market institutions should be judged not only from a static perspective taking firms competitive positions as given but also from a dynamic perspective auction markets are a natural competitive environment to study because there is a clear sense in which we can design such markets by choosing appropriate rules for competition in this paper we study how the first price auction fpa a format commonly used for procurement affects firms incentives to invest in cost reduction many procurement markets are characterized by a small number of participants heterogeneity among firms and low rates of turnover therefore it is interesting to investigate to what extent the format used for the auction contributes to these characteristics the basic ingredients of our model are as follows there are n firms and one of them has the opportunity prior to the auction to make an investment we model this investment as an improvement in the ex ante distribution of costs for this firm the main question we ask is what are the firm s incentives to invest given that this investment is observed by its competitors clearly the benefits of such investment depend on how the firm s competitors react in other words to determine the firm s incentive to invest we need to compare the equilibrium at the procurement stage if it makes this investment and if it does not in section 3 we derive new comparative statics results for the fpa we find that after the investment the investor s opponents will bid collectively more aggressively this result holds generally when there are only two bidders or when the investor s opponents are symmetric proposition 1 otherwise a sufficient condition is that investment changes market leadership proposition 2 in the language of industrial organization investment has a negative strategic effect in the fpa this erodes 1

efficiency and surplus bounds in cournot competition we derive bounds on the ratios of deadweight loss and consumer surplus to producer surplus under cournot competition to do so we introduce a parameterization of the degree of curvature of market demand using the parallel concepts of concavity and convexity the more concave is demand the larger the share of producer surplus in overall surplus the smaller is consumer surplus relative to producer surplus and the lower the ratio of deadweight loss to producer surplus deadweight loss over total potential surplus is at rst increasing with demand concavity then eventually

the principle of minimum differentiation holds under sufficient heterogeneity the so called principle of minimum differentiation stated by hotelling has been challenged by many authors this paper restores the principle by showing that n firms locate at the center of the market and charge prices higher than the marginal cost of production when heterogeneity in consumers tastes is large enough

industrial loans and market structure abstract based on the observation that financing is one of the main obstacles to create new firms this paper deals with the interactions between the market structure of both the banking sector and the borrowing industries we consider that firms installation costs are financed by means of industrial loans from specialized banks with endogenous entry in banking activity as well as in the borrowing industry we find that a natural oligopoly emerges in both sectors if the entry cost in the industrial sector is small enough relative to the banks entry cost

on the analysis of asymmetric first price auctions we provide a new set of tools for studying asymmetric rst price auctions connecting their equilibria to the concavity of the underlying type distributions and showing how one can use surplus expressions related to symmetric auctions to bound equilibrium behavior in asymmetric auctions we apply these tools to studying procurement auctions in which as is common in practice one seller is given an advantage re ecting for example better reliability or quality we show conditions under which for any given rst price handicap auction there is a second price auction with bonuses that outperforms it with most of our results involving ex post dominance

goodwill and market shares in oligopoly economic literature treats price as the traditional competition variable however schmalensee 1976 p 493 argued that prices change infrequently and that firms compete mainly through non price variables the most important non price competition variables are advertising and product variation although there are many works dealing with non price competition they have not devoted much attention to the multi period effect of these variables and the models have been mainly static or a sequence of static models further discussion of this argument can be found in kydland 1977 in which dynamic dominant player models are discussed in an earlier paper arrow and nerlove 1962 pointed out that advertising expenditure should be treated in the same way as investment in a durable good they assumed that there is a stock of goodwill that determines the current demand this stock of goodwill summarizes the advertising in the past and like capital stock depreciates over time arrow and nerlove analysed the optimal advertising strategy for the monopolistic firm in this paper we extend the arrow nerlove model to oligopolistic competition in which the firms compete among themselves via goodwill the game we describe takes place over time and discounted profit is used as a criterion the current advertising of any player affects future demand and therefore the model has an intertemporal dependence structure extending an assumption by schmalensee 1978 in section i we allow market shares to depend on the firm s goodwill and not merely on current advertising using this definition of market share we discuss in section ii the optimal advertising policy for a single firm in section iii we prove the existence of a unique stationary equilibrium point for oligopolistic competition since we allow firms to have different cost functions the equilibrium point is not a symmetric one i e different firms have different market shares and different goodwill at the equilibrium point in section iv we discuss this asymmetric solution by explaining the relation between production cost and market shares the impact of the number of firms on the advertising expenditure is discussed in section v we prove that the firms advertising expenses tend to decline as the number of firms increases however if one of the firms is a leading firm in the industry and has a market share above one half we show that this firm might increase its advertising as other firms enter into the industry as an example we discuss in section vi the duopoly case and offer an explicit statement of the market shares at the equilibrium point in section vii we analyse an industry consisting of identical firms and explore the influence of the interest rate and the depreciation rate on the firms goodwill and advertising policy

aggregation and social choice a mean voter theorem a celebrated result of black 1948a demonstrates the existence of a simple majority winner when preferences are single peaked the social choice follows the preferences of the median voter the median voter s most preferred outcome beats any alternative however this conclusion does not extend to elections in which candidates differ in more than one dimension this paper provides a multi dimensional analog of the median voter result we provide conditions under which the mean voter s most preferred outcome is unbeatable according to a 64 majority rule the conditions supporting this result represent a significant generalization of caplin and nalebuff 1988 the proof of our mean voter result uses a mathematical aggregation theorem due to prekopa 1971 1973 and borell 1975 this theorem has broad applications in economics an application to the distribution of income is described at the end of this paper results on imperfect competition are presented in the companion paper caplin and nalebuff 1991

entry and industry evolution the uk car industry 1958 83 this paper models entry and the subsequent changes in market structure in three segments of the uk car industry 1958 83 the entry equation emerges from a dynamic optimization model which allows for the costs of acquiring market share the model is used to explore the hypothesis that the market penetration of entrants in this industry was facilitated by a post entry advertising war which the incumbent firms lost the basic hypothesis under examination is that advertising both facilitates and restricts entry but that it does so in a way that varies systematically over time the data are consistent with this view showing that high advertising shares readily translate into high market shares but that the escalation of industry advertising caused by entry can make high advertising entry strategies increasingly costly over time

identification in differentiated products markets using market level data we present new identification results for nonparametric models of differentiated products markets using only market level observables we specify a nonparametric random utility discrete choice model of demand allowing rich preference heterogeneity product market unobservables and endogenous prices our supply model posits nonparametric cost functions allows latent cost shocks and nests a range of standard oligopoly models we consider identification of demand identification of changes in aggregate consumer welfare identification of marginal costs identification of firms marginal cost functions and discrimination between alternative models of firm conduct we explore two complementary approaches the first demonstrates identification under the same nonparametric instrumental variables conditions required for identification of regression models the second treats demand and supply in a system of nonparametric simultaneous equations leading to constructive proofs exploiting exogenous variation in demand shifters and cost shifters we also derive testable restrictions that provide the first general formalization of bresnahan s 1982 intuition for empirically distinguishing between alternative models of oligopoly competition from a practical perspective our results clarify the types of instrumental variables needed with market level data including tradeoffs between functional form and exclusion restrictions

monopoly price discrimination and demand curvature this paper presents a general analysis of the eects of monopolistic third degree price discrimination on welfare and output when all markets are served su cient conditions involving straightforward comparisons of the curvatures of the direct and inverse demand functions in the dierent mar kets are presented for discrimination to have negative or positive eects on

product differentiation and location decisions under demand uncertainty we investigate hotelling s duopoly game of location then price choices with quadratic transportation costs and uniformly distributed consumers under the assumption that firms are uncertain about the exact location of demand we characterize the unique equilibrium and the socially optimal locations contrary to the individual level random utility models location uncertainty is a differentiation force in equilibrium increases in the variance of the uncertainty lead to greater differentiation higher expected equilibrium prices and profits and a greater welfare loss

a continuous model for multistore competitive location this paper presents a simple model to determine the location strategies of two retail firms planning to open a number of stores in a geographical market firms try to maximize their profit under a leader follower type competition in which the number of stores is made endogenous by the introduction of fixed costs a novel methodology is developed in which firms strategies are defined in terms of their location densities this methodology leads to a model that is solvable analytically and to several results on competitive location strategies first it is shown that if the follower decides to enter a market he enters at least as strongly as the leader second the leader can effectively deter entry even if she is severely cost disadvantaged however in some cases the leader is better off by allowing the follower to enter the market third the leader may also let the follower enter the market in some situations where she has a cost advantage it is also shown that in situations where both firms enter the market their location strategies are quite insensitive to model parameters

a meta analysis of multibrand multioutlet channel systems in today s multibrand multichannel marketplace optimal channel design involves issues such as distribution intensity channel exclusivity vertical and horizontal coordination and online offline mixed structures we investigate how a firm s choice in these design issues affects its profitability under varying levels of brand and outlet differentiation our spatial model explicitly captures heterogeneous consumer preference for brand position store location and outlet type under various consumer behavior assumptions we apply this same underlying model to 10 different channel structures deriving associated demand functions and equilibrium solutions we perform a meta analysis over the entire set of results to estimate a general model that summarizes the linkages among the factors shaping optimal channel structure decisions in a multibrand multioutlet market this general model efficiently describes the complex interactions of channel characteristics with industry structure and consumer characteristics providing new findings as well as greater clarity to some results in the literature a predictive analysis applied to additional channel structures exhibits strong generalizability in qualitative findings

sustaining cooperation in a differential game of advertising goodwill accumulation abstract the paper suggests a differential game of advertising competition among three symmetric firms played over an infinite horizon the objective of the research is to see if a cooperative agreement among the firms can be sustained over time for this purpose the paper determines the characteristic functions value functions of individual players and all possible coalitions we identify an imputation that belongs to the core using this imputation guarantees that in any subgame starting out on the cooperative state trajectory no coalition has an incentive to deviate from what was prescribed by the solution of the grand coalition s optimization problem

a tourism demand function for the okanagan bc abstract this study examines the relative importance of the existing determinants of tourism demand in the okanagan because national coefficients cannot be used intercnageable with regional coefficients it is hypothesized that the values of the okanagan demand elasticities are likely to be lower than that of the province and the nation five major markets for okanagan tourism with identified and separate regressions run to determine the relative importance of the determinants of demand for okanagan tourism with respect to these markets empirical results indicate that national coefficient will tend to overestimate the regional coefficient values contrary to the results of other studies for the nation as a whole the exchange rate and travel cost did not seem to be significant determinants of okanagan tourism receipts

second mover advantage and price leadership in bertrand duopoly we consider the issue of first versus second mover advantage in differentiated product bertrand duopoly with general demand and asymmetric linear costs we generalize existing results for all possible combinations where prices are either strategic substitutes and or complements dispensing with common extraneous and restrictive assumptions we show that a firm with a sufficiently large cost lead over its rival has a first mover advantage for the linear version of the model we invoke a natural endogenous timing scheme coupled with equilibrium selection according to risk dominance the analysis yields as the unique equilibrium outcome sequential play with the low cost firm as leader

inverted u aggregate investment curves in a dynamic game of advertising abstract we revisit the relationship between market power and firms investment incentives in a noncooperative differential oligopoly game where firms sell differentiated goods and invest in advertising to increase the brand equity of their respective goods the feedback equilibrium obtains under open loop rules and aggregate expenditure on goodwill takes an inverted u shape under both cournot and bertrand behaviour provided product differentiation is sufficiently high total industry expenditure is higher under cournot competition

the demand for tourism in north east england with special reference to northumbria an empirical analysis abstract this paper examines the trends of tourism in north east england in particular we focus on the area of northumbria to show the potential of tourism for economic development in the region within this analysis we concentrate on the demand for tourism in the region and in particular we are concerned with tourism by uk residents in northumbria domestic tourism the long run relationship between domestic tourism demand and a number of economic factors effecting this demand is considered using the johansen and juselius 1990 1992 multivariate cointegration analysis an error correction model is then proposed for short run forecasting of domestic demand for tourism in northumbria

limit theorems for estimating the parameters of differentiated product demand systems we provide an asymptotic distribution theory for a class of generalized method of moments estimators that arise in the study of dierentiated product markets when the number of observations is associated with the number of products within a given market we allow for three sources of error sampling error in estimating market shares simulation error in approximating the shares predicted by the model and the underlying model error it is shown that the estimators are can provided the size of the consumer sample and the number of simulation draws grow at a large enough rate relative to the number of products we consider the implications of the results for berry levinsohn and pakes 1995 random coecient logit model and the pure characteristic model analyzed in berry and pakes 2002 the required rates dier for these two frequently used demand models a small monte carlo study shows that the dierence in asymptotic properties of the two models are reflected in quite a striking way in the models small sample properties moreover the limit distributions provide a good approximation to the actual monte carlo distribution of the parameter estimates the results have important implications for the computational burden of the two models

symmetric equilibrium existence and optimality in differentiated product markets abstract equilibrium existence and optimality are analysed in a market for products differentiated by their variety a game of three stages is analysed firms enter in the first stage choose varieties in the second stage and choose prices in the third stage the existence of subgame perfect equilibria is established at equilibrium products are symmetrically located in the space of characteristics and are offered at equal prices the surplus maximizing solution is characterized and it is shown that surplus maximizing product diversity is lower than the equilibrium one

forecasting turkey s tourism revenues by armax model abstract an appropriate armax model is applied to forecast international tourism revenues for turkey for the post 2001 economic crisis international tourist arrivals were seasonally dependable on earlier arrivals at lagged periods one two and four this implies high levels of repeat visiting through this model the future international tourists arrivals are forecast for the 2002 2007 period to determine possible revenues for that same period international tourism revenues can be explained by the current arrivals a first order autoregressive and a stochastic moving average filter at lag 3 for the 1963 2001 sample period future values of revenues are forecasted based on this model the estimated models and their forecasts may be important for the economy of turkey which is currently recovering from the recent economic crisis once us dollars expenditure per tourist is forecasted the gap between forecasts and needs can be defined more rationally to overcome economic crises in short discrepancy analysis may aid marketing promotion to increase arrivals and tourist expenditures

determinants of demand for international tourist flows to turkey abstract this article describes the development and findings of a set of models used to identify the most important of the following selected variables influencing international tourist flows to turkey per capita income relative prices relative exchange rate promotional expenditure the turkish government has invested a substantial amount in promoting foreign tourism and special events eg political unrest the demand for travel was measured both by the number of tourists and by the total tourist expenditure data were obtained from secondary sources and analysis was by least squares multiple regression income price and exchange rate were found to be important factors but the impact of promotional expenditure was minimal

a note on information revelation in procurement auctions abstract this paper is about a procurement auction setting introduced in gal or gal or and dukes 2007 in which suppliers offer differentiated products and the buyer needs to decide whether to reveal or not to the suppliers the own preferences for the various products we provide some technical remarks and complements to the analysis of gal or gal or and dukes 2007 and an extension to the case of risk averse suppliers

differential game models of advertising competition abstract differential game methodology combines two attractive features that are critical to the study of advertising competition dynamics and multi competitor decision making a focused review of two decades of differential game modeling of advertising competition indicates that insights gained to date while valuable are of a limited nature and research in the area needs to extend beyond present limits four recent studies are offered as examples of possible directions to follow in continued research

bidding for the future signaling in auctions with an aftermarket abstract this paper considers auctions where bidders compete for an advantage in future strategic interactions when bidders wish to exaggerate their private information equilibrium bidding functions are biased upwards as bidders attempt to signal via the winning bid signaling is most prominent in second price auctions where equilibrium bids are above value in english and first price auctions signaling is less extreme since the winner incurs the cost of her signaling choice the opportunity to signal lowers bidders payoffs and raises revenue when bidders understate their private information separating equilibria need not exist and the auction may not be efficient

costly buyer search in a differentiated products model an experimental study this study examines whether the content of buyer information and the timing of its dissemination affects seller market power we construct laboratory markets with differentiated goods and costly buyer search in which sellers simultaneously post prices the experiment varies the information on price or product characteristics that buyers learn under different timing assumptions pre and postsearch generating four information treatments theory predicts that price information lowers the equilibrium price but information about product characteristics increases the equilibrium price that is contrary to intuition the presence of informed buyers may impart a negative externality on other uninformed buyers data support the model s negative externality result when sellers face a large number of robot buyers that are programmed to search optimally observed prices conform to the model s comparative statics and are broadly consistent with predicted levels with human buyers however excessive search instigates increased price competition and sellers post prices that are significantly lower than predicted

competition among institutions abstract economic theory offers two different approaches to the analysis of group formation and the role of institutions general equilibrium approach explores the influence of the economic environment on formation of coalitions game theory explores the influence of institutional rules on equilibrium outcomes we introduce an integrative approach an institution s policy depends on its membership while its membership depends on the policies of all the institutions we present three distinct mathematical approaches to these models highlighting the algebraic nature of the question of existence of equilibrium our apparatus cover many economic and political environments including cases with multiple dimensions and multiple institutions journal of economic literature classification numbers c62 d50 d71 d72 h11 h40 r13 r53

dynamic price competition with network effects i consider a dynamic model of competition between two proprietary networks consumers die and are replaced with a constant hazard rate and firms compete for new consumers to join their network by offering network entry prices i derive a series of results pertaining to a existence and uniqueness of symmetric equilibria b monotonicity of the pricing function e g larger networks set higher prices c network size dynamics increasing dominance vs reversion to the mean and d firm value how it varies with network effects finally i apply my general framework to the study of termination charges in wireless telecommunications i consider various forms of regulation and examine their impact on firm profits and market share dynamics

an empirical analysis of dynamic nonprice competition in an oligopolistic industry this article develops a dynamic model of nonprice competition in an oligopolistic industry and uses it to analyze advertising competition in the u s cigarette industry the model generalizes existing studies by allowing advertising to affect both firm market shares and the total size of the market the model also allows dynamic conjectural variations to arise from the intertemporal links created by the durability of advertising we use these dynamic conjectural variations to distinguish alternative models of competitive interaction we estimate the complete model of firm production demand and advertising choice by using data for u s cigarette producers the results indicate that firm advertising primarily affects the level of market demand with a firm s effect on rival firms market shares arising through variations in the number of brands sold empirical results on firm behavior suggest that firms act as if their advertising choices will alter the future advertising choices of rival firms in both the high tar and low tar cigarette markets

the balance of trade and exchange rates theory and contemporary evidence from tourism abstract the purpose of this study is to investigate the effects of exchange rate depreciations and appreciations on the tourism trade balance specifically we employed linear and nonlinear autoregressive distributed lag ardl cointegration techniques to analyze the extent to which currency depreciations and appreciations affect the united states u s bilateral tourism trade with canada mexico and the united kingdom u k the results showed that the depreciation of the u s dollar subsequently improves the u s trade balance with all three trading partners however while the appreciation of the u s dollar deteriorates the u s bilateral tourism trade balance with canada and the u k it does not ultimately affect the u s bilateral tourism trade with mexico in the long term these results provide evidence contradicting the j curve theory supporting the postulations of the ml condition theoretical and policy implications are discussed within the realms of j curve theory marshall lerner ml condition international trade and tourism

near optimality of second price mechanisms in a class of asymmetric auctions consider a setting with n sellers having i i d costs with log concave density f from cumulative f and a buyer who puts a premiumi on procuring from seller i we show how for any given 1 n a sim ple second price bonus auction can be chosen which comes surprisingly close to giving the auctioneer the same surplus as an optimal mecha nism the bonuses depend only on the magnitude and monotonicity of the slope of virtual costs given f we show that these in turn depend only on fairly coarse information about f we explore how this result generalizes to asymmetrically distributed costs abstract

knowledge development in tourism tourism demand research abstract could tourism demand research be criticized as data hammering with little or no concern for theory development and testing this paper addresses this question by analyzing published studies on tourism demand for their contribution to knowledge building in the field results reveal that tourism demand research remains in its infancy

a system of equations model of uk tourism demand in neighbouring countries this paper uses a system of equations model to examine tourism demand during periods of destination country transition and integration into the wider international community the almost ideal demand system model is applied to the uk demand for tourism in the neighbouring destinations france spain and portugal spain and portugal are interesting cases as during the period under consideration they experienced a process of transition from economies with characteristics typical of developing countries only entering the world bank s industrialized countries classification in the 1980s the paper examines the evolution of tourism demand during these countries transition from developing to developed status consideration of france as a neighbouring destination also allows the behaviour of tourism demand to be compared between relatively rich and poor countries the results show the extent to which the cross country behaviour of demand becomes more or less similar over time with respect to changes in ex

competitive positioning in markets with nonuniform preferences we investigate the nature of competitive equilibrium for brands competing in a multi attribute product space when consumer preferences for product attributes follow nonuniform distributions we establish subgame perfect equilibria in a two stage game where firms choose positions in the first stage and prices in the second stage two types of entry scenarios are investigated in the first the number of brands is given exogenously and all of them choose positions simultaneously in the second scenario firms enter in sequence and the early entrants can choose strategies to deter the entry of later entrants we find the equilibria for two three and four brands for consumer preferences that follow a beta distribution nonuniform distributions result in equilibrium configurations that are substantially different from those obtained for uniform consumer distributions in the two brands case for sufficiently concentrated distributions we find asymmetric position equilibria with one firm at the corner of the market and one firm at an interior position in the case of three brands for sufficiently concentrated preferences we find symmetric equilibria that do not yield maximal differentiation we also establish an equilibrium for the case of four competing brands in addition we characterize entry deterring positioning strategies and examine how they vary with the distribution of consumer preferences

international tourism demand models inclusion of marketing variables abstract national tourist organizations often spend considerable sums in foreign countries on promoting the particular country as a tourist destination only seldom however is marketing activity incorporated as an explanatory variable in models of the demand for international tourism in such cases it should be possible to assess the impact of promotional expenditure in terms of the tourist visits and tourist expenditure generated where marketing is used to explain international tourism demand caution must be exercised in interpreting the empirical results poor results cannot be used to reach sensible conclusions and when good results are obtained the full implications of the estimated coefficients need to be explored

from local to global competition abstract we introduce a framework that has known models of oligopolistic competition with differentiated products the circle the logit and the ces as limit cases this integrative approach incorporates both localized and global competition as well as price sensitive individual demands it is used to explain the impact of major changes over the last two centuries reductions in transport costs increased taste for variety population growth and use of technologies with greater returns to scale we work out the properties of an extended chamberlinian model with applications both in industrial organization and economic geography

demand for differentiated products discrete choice models and the characteristics approach we propose a specific characteristics framework in order to construct linkages between alternative conceptual approaches to modelling product differentiation first it is shown that a demand system which satisfies the gross substitutes property imposes specific requirements on the locations of products in particular the dimension of the characteristics space must be larger than or equal to the number of products minus one we then identify a method for casting a given demand system subject to certain restrictions into our characteristics framework this is illustrated for the logit probit and linear probability models of discrete choice theory finally we find a characteristics representation of the ces representative consumer

optimal joint dynamic pricing advertising and inventory control model for perishable items with psychic stock effect abstract in this study a joint pricing advertising and inventory control problem will be investigated for a firm selling perishable products with psychic stock effect the proposed problem is analyzed in the deterministic multi period setting in which demand at each period depends on not only the amount of inventory displayed and advertising goodwill affected by the firm s current and past advertising efforts but also selling price and freshness index the objective is to determine the optimal pricing advertising and psychic stock strategies maximizing the discount total profit over the infinite planning horizon our theoretical results prove that the firm would adopt a static pricing strategy and then demonstrate that the optimal paths of the advertising goodwill and psychic stock can be determined uniquely we also show that the convergence of the advertising goodwill towards its equilibrium is from above or below depending on the relative location of the initial stock of advertising goodwill with respect to the unique equilibrium stock of advertising goodwill moreover a set of structural properties is developed to explore the relationships among the optimal decisions finally the concluding remarks and suggestions will be provided for future studies

estimation of tourism demand by multivariable regression analysis evidence from kenya abstract between 1963 and 1982 tourism was one of the top three domestic exports of kenya knowledge of the variables which significantly influence kenyan tourism demand could help tourism policy makers in planning growth strategies the results of this study indicate that multivariable regression analysis has limited usefulness in identifying the significant factors which influence tourists decisions data problems and resulting multicollinearity cause unsuitable results in one case while model specification appears to be a problem in another the author concludes that quantitative studies should be supplemented by qualitative analysis in order for kenyan policymakers to make optimal decisions

aggregation and imperfect competition on the existence of equilibrium we present a new approach to the theory of imperfect competition and apply it to study price competition among differentiated products the central result provides general conditions under which there exists a pure strategy price equilibrium for any number of firms producing any set of products this includes products with multi dimen sional attributes in addition to the proof of existence we provide conditions for uniqueness our analysis covers location models the characteristics approach and probabilistic choice together in a unified framework to prove existence we employ aggregation theorems due to prekopa 1971 and borell 1975 our companion paper caplin and nalebuff 1991 introduces these theorems and develops the application to super majority voting rules we present a new approach to the theory of imperfect competition and apply it to study price competition among differentiated products the central result is that there exists a pure strategy price equilibrium for any number of firms producing any set of products in addition to the proof of existence we provide conditions for uniqueness our model both unites diverse strands of the earlier literature and opens up uncharted areas for future analysis in particular we expand the traditional one dimensional framework to allow for multi dimen sional product differentiation our approach involves twin restrictions on consumer preferences one on individuals preferences the other on the distribution of preferences across society these are generalizations of the restrictions supporting 64 majority rule presented in caplin and nalebuff 1988 to prove existence we apply a new technique of aggregation this technique is valuable in a variety of other problems in the companion paper we use the aggregation result to generalize our earlier work on 64 majority rule and to characterize the relationship between the distribution of human capital and the distribution of income caplin and nalebuff 1991 there are additional applications in statistics and in search theory we begin with a brief review of the early literature on imperfect competition describing in more detail the existence problem and previous solutions section 3 presents our twin assumptions and shows that they cover many standard cases in section 4 we introduce the aggregation theorem and use it in the analysis of demand functions the proof of existence of equilibrium is in section

recent developments in dynamic advertising research a variety of continuous time differential functions have been developed to investigate dynamic advertising problems in business and economics fields since major dynamic models appearing before 1995 have been reviewed by a few survey papers we provide a comprehensive review of the dynamic advertising models published after 1995 which are classified into six categories i nerlove arrow model and its extensions ii vidale wolfe model and its extensions iii lanchester model and its extensions iv the diffusion models v dynamic advertising competition models with other attributes and vi empirical studies for dynamic advertising problems for each category we first briefly summarize major relevant before 1995 models and then discuss major after 1995 models in details we find that the dynamic models reviewed in this paper have been extensively used to analyze various advertising problems in the monopoly duopoly oligopoly and supply chain systems our review reveals that the diffusion models have not been used to analyze advertising problems in supply chain operations which may be a research direction in the future moreover we learn from our review that very few publications regarding dynamic advertising problems have considered the supply chain competition we also find that very few researchers have used the diffusion model to investigate the dynamic advertising problems with product quality as a decision variable and the pricing decision has not been incorporated into any extant lanchester model the paper ends with a summary of our review and suggestions on possible research directions in the future