market performance with multiproduct firms we revisit the fundamental issue of market provision of variety associated with chamberlin spence and dixit stiglitz when firms sell multiple products both products and firms are horizontally differentiated we propose a general nested demand framework where consumers first decide upon a firm then which variant to buy and how much the nested ces is a special case we use it to determine the market s biases when firms compete in product ranges and prices the market system attracts too many firms with too few products per firm firms restrain product ranges to relax price competition but this exacerbates over entry

fixed costs efficient resource management and conservation this article develops a framework to analyze the impacts on resource development of efficient management practices that account for possible resource conserving technological changes compared with the traditional management practice ignoring these changes efficient management may not delay or reduce resource development depending on the level of the changes under efficient management a higher probability of resource conserving technologies may not delay or reduce resource development these ambiguities are due to the existence of fixed and increasing marginal costs in resource development

why voluntary export restraints are voluntary the paper presents an analysis of the effect upon an oligopolistic equilibrium of introducing a voluntary export restraint ver upon an importing firm a ver set at the free trade level of imports is shown to raise the profits of all firms within the industry the result follows as the imposition of a ver upon a free trade nash price competition forces the domestic firm to become an industry price leader the ver raises industry prices by facilitating collusion and lowers consumer welfare pourquoi les restrictions volontaires d 1 exportation sont volontaires ce memoire presente une analyse des effets de l introduction de restrictions volontaires a l exportation rve sur une entreprise qui importe dans un monde en equilibre oligopolistique on montre que l introduction de rve approximant le niveau des importations en regime de libre echange devrait augmenter les profits de toutes les entreprises dans l industrie cela decoule du fait que l imposition de rve sur un univers de concurrence par les prix a la nash en regime de libre echange force l entreprise domestique a devenir le leader en prix l introduction de rve augmente le niveau des prix de l industrie en facilitant la collusion et de ce fait reduit le niveau de bien etre des consomrnateurs

liberalization quality and welfare removing the italian ver on japanese car exports the empirical evidence that evaluates ex post the effects of trade policy confirms the presumption well known in theory that quantitative barriers to trade have an impact on the average quality of exports yet in evaluating ex ante the effects of trade policy reform very few studies take into account the role of the induced change in quality the paper evaluates the effects of liberalization in the italian car market through a calibrated model where the choice of the quality of exports is made endogenous simulating the removal of the ver on japanese exports there are substantial gains from liberalization when only quantity effects are considered results change dramatically if quality effects are taken into account the downgrading in japanese exports entails a strong reduction in consumers gains

social networks and new product choice to successfully market new products in a social network it is essential to identify influential individuals whose product recommendations influence the consumption choices of their peers in this study we use spatial econometric methods to determine how individuals revise their preferences for product attributes when exposed to product recommendations from peers and how different individuals who vary in their degree of network connectedness exert influence on the product choices of others we find evidence that consumers look to others for guidance from peers in their preference for subjective taste specific parameters but tend not to respond to peer price choices our spatial methods allow us to empirically determine the influence exerted by individual members on the consumption choices of other members of the social network we find that connected members of the social network are not always the most influential in revising the consumption choices of others our estimates reveal that network proximity explains only 8 8 of influence

estimating demand for spatially differentiated firms with unobserved quantities and limited price data extending the circular city model i derive a pricing equation that identifies key structural parameters from one firm s data simulations indicate demand shifters and rotators can be distinguished cost parameters are imprecise and the likeliest specification error biases estimates toward zero

estimating markups and market conduct with multidimensional product attributes we demonstrate how to estimate a model of oligopoly pricing when products are multi dimensionally differentiated we provide an empirical counterpart to recent theoretical work on product differentiation using specifications informed by economic theory we estimate price cost margins for products differentiated in many dimensions

price competition under mixed multinomial logit demand functions in this paper we postulate a general class of price competition models with mixed multinomial logit demand functions under affine cost functions in these models the market is partitioned into a finite set of market segments we characterize the equilibrium behavior of this class of models in the case where each product in the market is sold by a separate independent firm we identify a simple and very broadly satisfied condition under which a pure nash equilibrium exists and the set of nash equilibria coincides with the solutions of the system of first order condition equations a property of essential importance to empirical studies this condition specifies that in every market segment each firm captures less than 50 of the potential customer population when pricing at a specific level that under the condition is an upper bound for a rational price choice for the firm irrespective of the competitors prices we show that under a somewhat stronger but still broadly satisfied version of the abov

assisting domestic industries under international oligopoly the relevance of the nature of competition to optimal policies optimal trade and industrial policies are derived for a home market that is supplied by a domestic firm and a foreign firm the optimal policy combination can be quite sensitive to the nature of the duopoly s competition for example for some cost and demand s tructures the optimal policy under cournot competition consists of a domestic production tax and a tariff but that under bertrand compet ition consists of a production subsidy and free trade copyright 1988 by american economic association

competitive pricing behavior in the auto market a structural analysis in a competitive marketplace the effectiveness of any element of the marketing mix is determined not only by its absolute value but also by its relative value with respect to the competition for example the effectiveness of a price cut in increasing demand is critically related to competitors reaction to the price change managers therefore need to know the nature of competitive interactions among firms in this paper we take a theory driven empirical approach to gain a deeper understanding of the competitive pricing behavior in the u s auto market the ability motivation paradigm posits that a firm needs both the ability and the motivation to succeed in implementing a strategy boulding and staelin 1995 we use arguments from the game theoretic literature to understand firm motivation and abilities in different segments of the auto market we then combine these insights from the game theoretic literature and the ability motivation paradigm to develop hypotheses about competition in different segments of the u s auto market to test our hypotheses of competitive behavior we estimate a structural model that disentangles the competition effect from the demand and cost effects on prices the theory of repeated games predicts that firms with a long run profitability objective will try to sustain cooperative pricing behavior as a stable equilibrium when conditions permit for example markets with high concentration and stable market environments are favorable for sustaining cooperative behavior and therefore provide firms with the ability to cooperate the theory of switching costs suggests that in markets in which a firm s current customers tend to be loyal firms have a motivation to compete very aggressively for new customers recognizing the positive benefits of loyalty from the customer base in the long run as consumer loyalty in the market increases the gains from increasing market share by means of aggressive competitive behavior are more than offset by losses in profit margins firms therefore have the motivation to price cooperatively empirically we find aggressive behavior in the minicom pact and subcompact segments cooperative behavior in the compact and midsize segments and bertrand behavior in the full size segment these findings are consistent with our theory based hypotheses about competition in different segments in estimating a structural model of the auto market we address several methodological issues a particular difficulty is the large number of car models in the u s auto market existing studies have inferred competitive behavior only in markets with two to four products they also use relatively simple functional forms of demand to facilitate easy estimation functional forms of demand however impose structure on cross elasticities between products such structure when inappropriate can bias the estimates of competitive interaction we therefore use the random coefficients logit demand model to allow flexibility in cross elasticities we also use recent advances in new empirical industrial organization neio to extend structural estimation of competitive behavior to markets with a large number of products we use the simulation based estimation approach developed by berry et al 1995 to estimate our model a frequent criticism of the neio approach is that its focus on industry specific studies limits the generalizability of its findings in this study we retain the advantages of neio methods but partially address the issue of generalizability by analyzing competitive behavior in multiple segments within the auto industry to see whether there is a consistent pattern that can be explained by theory theoretical modelers can use our results to judge the appropriateness of their models in predicting competitive outcomes for the markets that they analyze a by product of our analysis is that we also get estimates of demand and cost apart from competitive interactions for the market managers can use these estimates to perform what if analysis they can answer questions about what prices to charge when a new product is introduced or when an existing product s characteristics are changed

fundamental irreversibilities in stock externalities abstract this paper concerns the irreversibility effect in stock externalities in an environment of uncertainty with learning taking place one may wish to under emit today to avoid potential environmental irreversibilities alternatively one may wish to under invest in pollution control capital avoiding investments in sunk capital that turn out to be wasted the paper develops theoretical results on the tension between these two effects and separates risk aversion from the irreversibility effect the paper also presents a simple example in climate change policy

voluntary export restraints on automobiles evaluating a trade policy the authors evaluate the voluntary export restraint that was initially placed on exports of automobiles from japan in 1981 they evaluate the impact this policy had on u s consumer welfare firm profits and foregone tariff revenue from its initiation through 1990

spatial multiproduct pricing empirical evidence on intra european duopoly airline markets this paper estimates a model of spatial multiproduct duopoly pricing when the location patterns differ across markets the theoretical model suggests that the neighbouring configuration yields less competitive nash prices than the interlaced configuration i apply this model to data for intra european duopoly airline markets the empirical results support the theoretical model since i find that fares are higher on intra european markets that exhibit neighbouring configurations in the time domain this result suggests that price competition is reduced when each airline operates on a specific segment of the timetable e g the first 12 hours of the day clearly this result has several implications for policy makers and or airport authorities in charge of awarding slots

estimating network effects in two sided markets without data on prices and quantities abstract i develop a semi structural approach to identify network effects on two sided monopoly platforms without data on prices and quantities when total revenue data is available the test is sufficient when separate revenue data is available on the two sides the test is both necessary and sufficient

rivalry in price and location by differentiated product manufacturers in this article we estimate a model of strategic rivalry between food manufacturers in product design and pricing we derive a spatial structural model in which food manufacturers jointly select prices and the optimal attribute composition of their product lines we find that manufacturers have an incentive to locate yogurt products nearby others in attribute space and that products with the most similar attribute compositions enjoy the widest price cost margins our findings explain the observation that most consumer package goods tend to be very similar yet manufacturers appear to earn above normal profits copyright 2013 oxford university press

market power and joint dominance in u k brewing market power and joint dominance are examined in u k brewing i assess unilateral and coordinated effects where the latter is equated with joint dominance and show how one can distinguish between the two econometrically the application makes use of two demand equations the nested logit of mcfadden 1978a and the distance metric of pinkse slade and brett 2002 the two equations yield very different predictions concerning elasticities and markups nevertheless although there is evidence of market power using either demand model that power is due entirely to unilateral effects in other words neither model uncovers evidence of coordinated effects tacit collusion

spatial competition with heterogeneous firms i model endogenous horizontal and vertical product differentiation with arbitrarily many heterogeneous firms firms are asymmetric in that they differ in their marginal costs i prove that under an equilibrium refinement all economically relevant firm outcomes are uniquely determined across all strict subgame perfect nash equilibria there are two central results first a firm s price market share and profit are independent of its neighbors marginal costs conditional on the average marginal cost in the market second more productive firms are more isolated all else equal in particular the distance between two firms is strictly decreasing in their average marginal cost

dumping and dynamic competition abstract when the current output level affects future production costs domestic and foreign profit maximizing firms may set prices below current costs to gain experience antidumping enforcement which poses a barrier to below cost sales by foreign rivals changes the payoff structure of competition and alters the equilibrium decisions of both foreign and domestic firms a comparison of the nash equilibria with and without antidumping rules shows that these rules change market outcomes even when they do not appear to be binding ex post this positive analysis of antidumping enforcement complements previous studies that have considered the motivation for dumping

limited knowledge of demand and oligopoly equilibria abstract in a standard model of oligopoly with differentiated products the existence of an equilibrium at which the first order conditions for profit maximisation are simultaneously satisfied for all firms is proved and this is done without imposing any restrictions on the demand functions this is an equilibrium in the following sense although some firms may not necessarily be maximising their profits nevertheless if each firm s knowledge of demand is limited to the linear approximation of its own demand curve then it will believe that it is indeed maximising its profits

brands in motion how frictions shape multinational production following the 2016 leave vote in the referendum on uk membership in the eu and the election of donald trump trade agreements have entered a period of great instability to predict the impact of possible disruptions to existing arrangements requires counterfactual analysis that takes into account the complex set of factors influencing the production and marketing strategies of multinational corporations we estimate a model of multinational decision making in the car industry this model predicts the production reallocation and consumer surplus consequences of changes in tariffs and non tariff barriers induced by nafta termination brexit trans pacific and trans atlantic integration agreements

product line rivalry and market segmentation with an application to automobile optional engine pricing this paper addresses the questions whether and when the pricing practices on base products may differ from those of premium products sold with options or add ons various alternative models are considered a monopoly model a model of brand rivalry with full consumer information and a model of rivalry in which consumers are only well informed about base product prices only the brand rivalry model with limited consumer information predicts that premium products have larger percentage markups than base products provided that brand rivalry is sufficiently intense empirical evidence on base and premium product pricing in the automobile market is consistent with the limited information model and inconsistent with the other two models

the differentiation triangle the paper formalizes the observation that submarkets for high quality and low quality variants are markedly different from each other we study a simple model where variants of low quality cannot be horizontally differentiated whereas customers disagree about the value of variants in the high quality range we determine the outcome under price competition in the differentiation triangle with sequential entry when each firm can develop the vertical product line or decide to follow a niche strategy i e to develop only one variant

partial ownership arrangements and collusion in the automobile industry this paper develops a conjectural variation model that allows for partial ownership arrangements and foreign trade this model is applied to the japanese and us automobile industries although collusion is found to occur in the japanese automobile industry it is found to be more competitive than the us automobile industry the effect imports have on firms price cost margins in both countries is also found to be different

the effect of ownership structure on prices in geographically differentiated industries i analyze how ownership structure and market geography jointly influence fast food prices i estimate a model of demand and supply that accounts for the market geography and run counterfactual experiments that demonstrate how mergers affect prices i find that the impact of mergers can be large that this impact decreases as the merging outlets are farther apart that mergers among market leaders generally increase prices more than mergers among weaker firms and that mergers can increase prices even if the outlets are so far apart that neither outleti s presence affects prices at the other before the merger

flexibility learning and irreversibility in environmental decisions a bayesian approach the bayes decision is characterized and studied for a two period decision problem involving a proposed resource development project it is assumed that development is irreversible and that expectations about benefits and costs during the second period vary with experiences resulting from the first period action the amount and types of learning achieved depend upon the particular action taken during the first period flexible sequential decision procedures are compared with fixed once and for all decisions it is shown that under this specification optimal development decisions are not necessarily more conservative when a sequential procedure is used the possibility of reneging on a fixed decision is formally specified and studied

variety pass through an examination of the ready to eat breakfast cereal market abstract we examine variety pass through effects that occur when multiproduct retailers adjust the length of their product lines in response to changes in wholesale prices studying variety pass through is essential to understanding how wholesale price changes transmit into retail prices when variety is endogenous using data from the ready to eat breakfast cereal category we find that retailers jointly adjust retail prices and the length of their product lines in response to changes in wholesale prices we show the importance of controlling for the endogeneity of retailers product line decisions when calculating price pass through rates

mergers brand competition and the price of a pint abstract mergers in the uk brewing industry have reduced the number of national brewers from six to four the number of brands in contrast has remained relatively constant we analyze the effects of mergers on brand competition and pricing brand level demand equations are estimated from a panel of draft beers to model brand substitution possibilities we estimate the matrix of cross price elasticities semiparametrically our structural model is used to assess the strength of brand competition along various dimensions and to evaluate the mergers in particular we compute equilibria of pricing games with different numbers of players

market structure and pricing strategy of china s automobile industry in this study using market level data on quantities prices and automobile characteristics from 1995 to 2001 we conduct a market analysis of the chinese automobile industry under imperfect competition on the demand side we apply a nested multinomial logit model to the national market share data in order to ascertain the demand features of china s automobile market on the supply side we assume bertrand behavior to uncover the markups set by automobile manufacturers our empirical results suggest that some large automobile manufacturers set high markups indicating their strong market power in china s automobile market however their declining markups in the late 1990 s imply a reduction in market control by the major producers

technology adoption in the presence of an exhaustible resource the case of groundwater extraction in this paper we integrate technology diffusion within hotelling s exhaustible resource model the modern technology is a conservation technology such as drip irrigation used with groundwater resource quality heterogeneity and rising water prices are responsible for the gradual adoption of the modern technology and under reasonable conditions the diffusion curve is an s shaped function of time without intervention the diffusion process will be slower than is socially optimal and optimal resource use tax will accelerate the diffusion of the conservation technology and slow down excessive resource depletion caused by market failure due to open access conditions

the evolution of price dispersion in the european car market car prices in europe are characterized by large and persistent differences across countries the purpose of this paper is to document and explain this price dispersion using a panel data set extending from 1980 to 1993 we first demonstrate two main facts concerning car prices in europe i the existence of significant differences in quality adjusted prices across countries with italy and the u k systematically representing the most expensive markets 2 substantial year to year volatility that is to a large extent accounted for by exchange rate fluctuations and the incomplete response of local currency prices to these fluctuations these facts are analysed within the framework of a multiproduct oligopoly model with product differentiation the model identifies three potential sources for the international price differences price elasticities generating differences in markups costs and import quota constraints local currency price stability can be attributed either to the presence of a local component in marginal costs or to markup adjustment that is correlated with exchange rate volatility the latter requires that the perceived elasticity of demand is increasing in price we find that the primary reason for the higher prices in italy is the existence of a strong bias for domestic brancs that generates high markups for the domestic firm fiat in the u k higher prices are mainly attributed to better equipped cars and or differences in the dealer discount practices the import quota constraints are found to have a significant impact on japanese car prices in italy france and the u k with respect to local currency price stability a large percentage of the documented price inertia can be attributed to local costs and a smaller fraction to markup adjustment that is indicative of price discrimination based on these results we conjecture that the emu will substantially reduce the year to year volatility observed in the car price data but without further measures to increase european integration it will not completely eliminate existing cross country price differences

supermarket choice and supermarket competition in market equilibrium multi store firms are common in the retailing industry theory suggests that cross elasticities between stores of the same firm enhance market power to evaluate the importance of this effect in the u k supermarket industry we estimate a model of consumer choice and expenditure using three data sources profit margins for each chain a survey of consumer choices and a data set of store characteristics to permit plausible substitution patterns the utility model interacts consumer and store characteristics we measure market power by calculating the effect of merger and demerger on nash equilibrium prices demerger reduces the prices of the largest firms by between 2 and 3 8 depending on local concentration mergers between the largest firms lead to price increases up to 7 4

to harvest or not to harvest an analysis of cutting behavior on federal timber sales contracts economists have studied the environmental consequences and competitiveness of alternative sales techniques for publicly owned na tural resources little attention has been paid however to fluctuat ions in revenues resulting from the option nature of public resourc e sales this paper analyzes how the contract structure of public res ource sales leads to defaults and thereby revenue instability data on u s forest service timber sales contracts which were modified i n the early 1980s in response to default problems suggest that reduc ed contract lengths and more stringent requirements for extensions in crease harvest rates but that price adjustment clauses are unlikely to have similar effects copyright 1988 by mit press

testing dynamic oligopolistic interaction evidence from the semiconductor industry abstract the objective of this paper is to test whether firms in the dynamic random access memory dram industry take the intertemporal strategic effect of their contemporaneous output decision on their rivals future output decision into account or whether they precommit themselves to a production plan learning by doing and spillovers are present in this industry and introduce an intertemporal component to firms strategies a simplified version of jarmin s rand j econ 250 1994 441 dynamic oligopolistic model is applied to firm level data demand and pricing relations for five dram generations are estimated the empirical results show that firms behave strategically and price cost margins are likely overestimated in a precommitment specification

the ambiguous consequences of anti dumping laws the anti dumping law is most often applied in oligopolistic industries while most analyses focus on the monopoly model i analyze a duopoly model where a foreign firm engages in price based dumping under cournot behavior the anti dumping law has ambiguous price and welfare effects when the home firm is a stackleberg leader two disquieting effects emerge first the home firm can use the anti dumping law to curtail competition even when the foreign firm does not initially engage in dumping second the anti dumping law can increase profits of both firms at the expense of domestic consumers

anti dumping and countervailing duties under oligopoly abstract this paper constructs a conjectural variations model of international oligopoly in which the home country s optimal policy responses to the foreign government s subsidies and foreign firms dumping can be calculated some theoretical support is found for tariffs that countervail part of the foreign export subsidy the optimal fraction depends on the size of own and cross effects in demand and on the extent of market competition however no normative case is found for anti dumping duties

measuring multi product banks market power using the lerner index abstract the aggregate lerner index is a popular composite measure of multi product banks market power based on total assets as the single aggregate output factor we show that the aggregate lerner index only qualifies as a consistently aggregated lerner index if three conditions hold under these conditions the aggregate lerner index reduces to a weighted average of the product specific lerner indices we test the three conditions for a sample of u s banks covering the years 2011 2017 all three conditions are rejected and we show that they may cause an economically relevant bias to the aggregate lerner index depending on the economic context as a general solution we propose using the always consistently aggregated weighted average lerner index whenever a composite lerner index is needed

spatial price competition a semiparametric approach we investigate the nature of price competition among firms that produce differentiated products and compete in markets that are limited in extent we propose an instrumental variables series estimator for the matrix of cross price response coefficients demonstrate that our estimator is consistent and derive its asymptotic distribution our semiparametric approach allows us to discriminate among models of global competition in which all products compete with all others and local competition in which products compete only with their neighbors we apply our semiparametric estimator to data from u s wholesale gasoline markets and find that in this market competition is highly localized

restoring wetlands through wetlands mitigation banks this paper offers the first economic analysis of wetlands mitigation banks the banks are a new alternative for restoration of wetlands by developers before receiving regulatory approval for future development of wetlands in the same watershed a stochastic optimal control model is developed which incorporates ecological uncertainty of wetlands restoration the model helps in examining the decisions of how much to invest in a wetlands mitigation bank the model is calibrated with data from california bioeconomic parameters numerical simulation of the model provides a sensitivity analysis of how model parameters of restoration costs stochastic biological growth interest rate and the market value of credits affect the trajectory of investment and the optimal stopping state of wetlands quality when the investment ends the analysis reveals that restoration of the whole site will occur when there is a reduction in restoration costs an increase in biological uncertainty or an increase in the value of wetlands credits continued restoration is harder to justify with a higher interest rate

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

transactions costs and the efficient organization of production a study of timber harvesting contracts a transaction costs framework is developed to explain the choice between lump sum and per unit payment provisions in private timber harvesting contracts predictions about which contract type minimizes the transaction costs of presale measurement and contract enforcement and monitoring are derived and tested using private timber sales contracts from north carolina the empirical results provide strong support for the transaction costs approach and also reject several predictions from a risk based model the transaction costs framework also provides insights into the choice between negotiated and competitive sales procedures

technology as an agricultural pollution control policy in this paper we consider the market level impacts of factor augmenting innovations designed to reduce the use of fertilizers and pesticides first within the context of a simple two factor model and then through a simulation model of the u s corn market in both models the impacts depend on the output demand elasticity and input substitution elasticities the principal conclusion of the simulation analysis is that the potential for new techniques to reduce the use of agricultural chemicals is limited capital augmenting innovations would actually raise fertilizer and pesticide usage land augmenting innovations would also tend to increase pesticide usage

centrality and pricing in spatially differentiated markets the case of gasoline we highlight the importance of centrality for pricing firms characterized by a more central position in a spatial network are more powerful in terms of having a stronger impact on their competitors prices and on equilibrium prices these propositions are derived from a simple theoretical model and investigated empirically for the retail gasoline market of vienna austria we compute a measure of network centrality based on the locations of gasoline stations in the road network results from a spatial autoregressive model show that prices of gasoline stations are more strongly correlated with prices of central competitors

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

identification and estimation of preference distributions when voters are ideological this article studies the non parametric identification and estimation of voters preferences when voters are ideological we establish that voter preference distributions and other parameters of interest can be identified from aggregate electoral data we also show that these objects can be consistently estimated and illustrate our analysis by performing an actual estimation using data from the 1999 european parliament elections

product differentiation and oligopoly in international markets the case of the u s automobile industry this paper develops and estimates a model of the u s automobile industry on the demand side a discrete choice model is adopted that is estimated using micro data from the consumer expenditure survey the estimation results are used in conjunction with population weights to derive aggregate demand on the supply side the automobile industry is modelled as an oligopoly with product differentiation equilibrium is characterized by the first order conditions of the profit maximizing firms the estimation results are used in counterfactual simulations to investigate two trade policy issues the effects of the ver and exchange rate pass through

optimal departures from marginal cost pricing focuses on departures from marginal cost pricing optimal allocation or resources level of tax revenue that will be collected by the government theorems developed for resource allocation ebsco

localized competition multimarket operation and collusive behavior this paper studies collusive behavior in a repeated oligopoly model with localized competition also reinterpreted as a model of multimarket operation private information about the rivals past actions naturally arises from these product market structures the resulting communication problems imply that firms should not adopt strategies with too severe punishments infinite grim punishments may be too severe for large discount factors the standard stick and carrot punishments from the perfect public information model are always too severe for all discount factors modified stick and carrot punishments can still be used though for a smaller range of discount factors than the standard stick and carrot punishments