duopoly supergames with product differentiation abstract when goods are complements or very close substitutes more tacit collusion is supported by trigger strategies in price setting supergames than in quantity setting supergames for moderate or poor substitutes the situation is reversed this contrasts with the static situation where price setting strategies always lead to higher welfare

price versus quantity in a mixed duopoly abstract we revisit the classic discussion of the endogenous choice of a price or a quantity contract but in a mixed duopoly we find that choosing the price contract is a dominant strategy for both firms whether the goods are substitutes or complements

effects of indirect taxation in a mixed oligopoly abstract in a mixed oligopoly an increase in tax ad valorem or specific does not change total output but increases the output of the public firm and the tax revenue also privatization may increase both tax revenue and welfare

trade policy and mixed enterprises this paper demonstrates that the degree of state ownership affects neither the level of socially optimal activities nor welfare if the government chooses optimal trade policy instruments in the case of rivalry in the home market the optimal import tariff is independent of the degree of state ownership and the optimal production subsidy decreases with state ownership if the optimal tariff is positive for the case of cournot rivalry in a third market the optimal export subsidy increases with state ownership while in the case of bertrand rivalry with differentiated products the optimal export tax increases

on competitive price adjustment for a storable good and abstention from trade the public good aspect of information is used to account for periods in which the aggregate level of trade is low it is shown that abstention from trade may occur when the uncertainty with respect to the market clearing price there is no auctioneer gets large relative to the cost of getting information about it and relative to the cost of postponing transactions in this case all agents are aware of bilateral pareto improving trading opportunities but these opportunities are not exploited

reform of the coal sector in an open economy the case of china cheap abundant and easy to transport and store coal has been produced and consumed to meet people s energy needs the last decade s growth in global coal use has been driven mainly by developing economies like china whose phenomenal economic growth has been powered by coal fired electricity and promoted by the export of manufactured goods a recent reform focus in china s coal sector is on coal taxation the paper develops a game theoretic model tailored to the context of china where coal taxation reform takes place against the background of privatisation of coal firms and an open economy it finds that the adoption of special coal taxes is optimal for social welfare under most circumstances but may induce coal firms to commit opportunistic behaviour in the process of privatisation the paper also cautions about potential resistance to the reform from consumers coal firms and government officials

cournot and bertrand equilibria compared substitutability complementarity and concavity abstract this paper assesses the view that bertrand equilibrium is intrinsically more competitive than cournot equilibrium we consider an oligopoly model with linear demand and a mixture of substitute and complementary products our results provide support for the conventional wisdom and also indicate its limitations we provide counter examples showing that no clear cut comparison of prices and quantities is possible without strategic complementarity in either of the two games however price competition is indeed more competitive according to the following criteria lower mark up output ratios larger average output and lower average price

women s work and economic development using a cross country dataset and microdata from india and thailand we examine how women s work status changes with economic development several clear patterns emerge women s labor force participation first declines and then rises with development women move from work in family enterprises to work as paid employees fertility declines and gender gaps in education narrow women s education levels and those of their spouses appear to be important determinants of women s labor market activities broad welfare indicators such as mortality rates and education levels indicate that women s well being improves on average with development both in absolute terms and relative to men

nutrients impacts and determinants understanding the determinants of nutrient intake and the influence of nutrition on performance is critical in designing policies to alleviate hunger and malnutrition a series of studies undertaken by the authors which are synthesized here analyzes the influence of prices income and women s schooling on the nutrient intake of those in developing countries and the effect of nutrition on health productivity wages and fertility these studies suggest that the impact of food price increases may be strong particularly among those with the lowest incomes that the growth of income may be less likely to improve nutrient intake than has been suggested by others and that womzen s schooling is important in improving nutrition these studies also indicate that nutrition exerts a positive influence on wages productivity and fertility our limited knowledge of the role and determinants of nutrition is reflected in the finding of unduly strong effects of seasonalitv on price nutrition relations and the lack of a direct association between nutrition and health the nutrition of poor populations is of substantial interest because of the widespread and plausible presumption that better nutrition improves the welfare of individuals in such populations nutrition also is of interest because of the common conjecture that better nutrition improves productivity a series of our studies have analyzed the relations between nutrition and health labor productivity and fertility and the relations between prices income women s schooling and nutrition intake here we synthesize the results of these studies and address some of the puzzles and policy implications that have arisen

understanding the family gap in pay for women with children as the gender gap in pay between women and men has been narrowing the family gap in pay between mothers and nonmothers has been widening one reason may be the institutional structure in the united states which has emphasized equal pay and opportunity policies but not family policies in contrast to other countries that have implemented both the authors now have evidence on the links between one such family policy and women s pay recent research suggests that maternity leave coverage by raising women s retention after childbirth also raises women s levels of work experience job tenure and pay

do state trading exporters distort trade abstract in this paper we analyse the trade distorting effects of state trading enterprises stes which exist in some exporting countries because of these potential effects several countries have raised the issue of state enterprises in the doha round negotiations in the wto the belief is that stes in certain developed countries have trade effects which are equivalent to an export subsidy stes also exist in developing countries though since the aim of government policy may differ from the developed country case the trade distortion may be equivalent to an export tax we present a theoretical model that is sufficiently general to allow us to consider the case of exporting stes in developed and developing economies the model is calibrated with data on two examples of stes one typical of an ste in a developed country the other typical of an ste in a developing economy in each case we allow for differences in the nature of the ste s pay off function the overall conclusion is that stes do distort trade and the trade distortion effect is potentially significant

collusion in differentiated duopolies revisited abstract in a letter previously published in this journal rothschild 1992 rothschild r 1992 on the sustainability of collusion in differentiated duopolies economics letters 40 33 37 claims to obtain results in contrast with those obtained by deneckere 1983 deneckere r 1983 duopoly supergames with product differentiation economics letters 11 37 42 we show however that taking correctly into account non negativity constraints on output rothschild s formulation yields the same conclusions as deneckere s

quality and competition between public and private firms abstract we study a multistage quality then price game between a public firm and a private firm the market consists of a set of consumers who have different quality valuations the public firm aims to maximize social surplus whereas the private firm maximizes profit in the first stage both firms simultaneously choose qualities in the second stage both firms simultaneously choose prices consumers quality valuations are drawn from a general distribution each firm s unit production cost is an increasing and convex function of quality there are multiple equilibria in some the public firm chooses a low quality and the private firm chooses a high quality in others the opposite is true we characterize subgame perfect equilibria equilibrium qualities are often inefficient but under some conditions on consumer valuation distribution equilibrium qualities are first best various policy implications are drawn

mixed oligopoly privatization subsidization and the order of firms moves several types of objectives abstract we show the robustness of results in earlier works for a subsidy in mixed oligopoly these results do not depend upon the fact that each private firm maximizes its own profits

toward a theory of competitive price adjustment in his 1959 essay toward a theory of price adjustment arrow argued that there exists a logical gap in the usual formulations of the theory of perfectly competitive economy namely that there is no place for a rational decision with respect to prices as there is with respect to quantities see also koopmans 1957 this gap is especially felt in macroeconomics where the basic framework is that of perfect competition and many results depend on the existence of some lag in the adjustment of prices here i propose a first step toward a theory of price adjustment in a competitive environment i shall consider here a simple exchange economy with no money the application to the question of the real effects of changes in the money supply is discussed in a separate paper eden 1980 the main cost of adjustment considered here is the cost of information about changes in aggregate excess demand the question is who will gather and pay for the information this public good problem is analysed in a model in which the artificial entity of the auctioneer is replaced by firms sellers who seek information about excess demand and announce the prices of their products the public good aspect of the problem emerges when there is a unique optimal price which would be announced on the basis of old information shared by all participants then if a single firm buys new information and announces a different price all firms which are aware of this revised price will rightly think that it is based on updated information and will therefore follow the lead in this case the announced price transmits all the relevant new information to all firms and the firm that updates the information therefore provides that public good which in the walrasian model is provided by the auctioneer 2 the question is which firm will undertake the function of the auctioneer the solution suggested here is that all firms will adopt a mixed strategy in which they undertake this function with a certain probability it is shown however that there is always a positive probability that the prices advertised in a particular market will not be based on updated information since otherwise there would be no incentive to buy information in the second section i describe the process of advertising prices for the case in which the aggregate demand that sellers in a particular market face is exogenously given and infinitely elastic i then discuss the type of framework required to justify such demand curves and show that in general the walrasian price is not the average of advertised prices

bertrand vs cournot competition in distribution channels with upstream collusion abstract this paper applies repeated game theory to tacit collusion in dynamic distribution channels based on the grim trigger strategy we examine competitors choice of the strategic instruments in distribution channels comprised of two manufacturers distributing through two independent retailers respectively first the paper discusses the upstream manufacturers collusion incentives under different competition modes for downstream retailers and shows that the manufacturers collusion incentives critically depend on the retailers competition modes and the discount factor we then identify the endogenous competition modes in equilibrium we find that upstream collusion is easier to sustain under cournot competition than bertrand competition and it is least likely to be sustained under mixed bertrand cournot competition furthermore in equilibrium retailers can engage in bertrand cournot or mixed bertrand cournot competition depending on the discount factor and the degree of product differentiation this study provides the rationale behind the emergence of various modes of competition in practical dynamic distribution channels especially the recent mixed bertrand cournot competition mode finally the manufacturers collusion incentives and retailers competition modes jointly affect the manufacturers profitability and social welfare we also discuss how the manufacturers profitability and social welfare vary under different competition modes taking upstream collusion into consideration we find that upstream collusion increases decreases social welfare for complements substitutes

r d subsidies spillovers and privatization in mixed markets we examine the use of subsidies to research and development rd however it does not lead to the equalization of per firm output and therefore to an efficient distribution of production costs we also find that privatization of the public firm reduces r d activity and welfare in the duopoly market this result stands even when optimal r d subsidies are provided

opec s oil exporting strategy and macroeconomic in stability aguiar conraria and wen 2008 argued that dependence on foreign oil raises the like lihood of equilibrium indeterminacy economic instability for oil importing countries we argue that this relation is more subtle the endogenous choices of prices and quantities by a cartel of oil exporters such as the opec can aect the directions of the changes in the likelihood of equilibrium indeterminacy we show that uctuations driven by self ful lling expectations under oil shocks are easier to occur if the cartel sets the price of oil but the re sult is reversed if the cartel sets the quantity of production these results oer a potentially interesting explanation for the decline in economic volatility i e the great moderation in oil importing countries since the mid 1980s when the opec cartel changed its market strategies from setting prices to setting quantities despite the fact that oil prices are far more volatile today than they were 30 years ago

mixed oligopoly subsidization and the order of firm s moves the relevance of privatization abstract a series of previous papers demonstrate that there are no consequences from privatization in a mixed oligopoly when the government uses a subsidy to ensure first best this conclusion depends upon the assumption that privatization results in a simultaneous move oligopoly if instead privatization results in a public leader becoming a private leader the optimal subsidy output and welfare are all reduced

privatization neutrality theorem revisited fjell and heywood 2004 show that privatization is not necessarily welfare neutral in mixed oligopolies under a production subsidy if firms move sequentially we find that the neutrality holds for any time structure if instead an output floor is introduced

a note on price and quantity competition in differentiated oligopolies abstract in this note we show that the results developed in n singh and x vives 1984 rand j econ 15 546 554 are sensitive to the duopoly assumption if there are more than two firms prices may be higher under price competition than under quantity competition this will be the case if quality differences are large and goods are complements if goods are substitutes high quality firms may earn higher profits under price competition than under quantity competition hence it is not evident which kind of competition is more efficient journal of economic literature classification numbers d43 l13

r d versus output subsidies in mixed markets we analyse the relative welfare effects of an r d and an output subsidy in a mixed duopoly we show that an r d subsidy is beneficial for society as a whole and socially superior to an output subsidy when spillovers are sufficiently high otherwise an output subsidy is socially superior

the economic consequences of unwed motherhood using twin births as a natural experiment social scientists have long concluded that premarital childbearing exacerbates problems of both poverty and family instability out of wedlock and adolescent childbearing may reduce a mothers educational attainment lower the probability of her eventual marriage increase her probability of welfare recipiency and decrease family income the authors use an exogenous fertility event the birth of twins to estimate the economic effects of unplanned births the approach compares the economic outcomes of women experiencing premarital twin first births to those experiencing premarital single first births in the attempt to identify the consequences of an unplanned birth upon womens future fertility and marital decisions education labor force participation labor earnings welfare receipt and poverty status 1970 and 1980 us census micro data are used to identify twin births to unmarried women analysis found large short term effects of unplanned births on labor force participation poverty and welfare recipiency among unwed mothers but not among married mothers furthermore most adverse economic effects of unplanned motherhood dissipate over time for whites but larger and more persistent negative effects weigh upon black unwed mothers

competitive price adjustment to changes in the money supply in a competitive environment in which ex ante identical sellers set prices the market price cannot always be based on updated information since otherwise there will be no incentive to gather information about changes in demand this result is applied to the case in which changes in the money supply are the only source of uncertainty it is shown that if the possible changes in the money supply are not large the economy will exhibit a positive relationship between money and output but no involuntary unemployment if the possible changes in the money supply are large the economy will exhibit a positive relationship between money and employment allowing for involuntary unemployment

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

on the indeterminacy of equilibrium exchange rates in this paper we consider a particular international economic policy regime the laissez faire regime the distinguishing features of which are unrestricted portfolio choice and floating exchange rates and as we show this regime although favored by many economists is not economically feasible it does not have a determinate equilibrium that is an implication of an overlapping generations model more basically it is an implication of the notion that money is wanted only in order to accomplish trades

fertility and labor supply evidence from the one child policy in china this study provides new evidence on on the causal effect of fertility on maternal labor supply in rural china using the fact that in some parts of rural china couples are allowed to have a second

fecundity fertility and the formation of human capital exploiting a genealogy of english individuals living in the 16th to the 19th centuries this study shows that lower parental reproductive capacity positively affected the socio economic achievements of offspring using the time interval between the date of marriage and the first birth as a measure of reproductive capacity we find that parental fecundity positively affected the number of siblings and that children of parents with lower fecundity were more likely to become literate and employed in skilled and high income professions this suggests there was a trade off between child quantity and quality in england during the industrial revolution supporting leading theories of the origins of modern economic growth

comparing bertrand and cournot in mixed markets abstract we revisit the classic comparison between bertrand and cournot outcomes in a mixed market with private and public firms the results are often strikingly different and opposite to the ones obtained from a similar comparison in the standard setting with all profit maximizing firms

mixed oligopoly cost reducing research and development and privatisation abstract we develop a mixed oligopoly model to examine the role of r d subsidies and evaluate the welfare effects of privatisation in solving the oligopoly model we propose a novel use of aggregative games techniques our analysis reveals that privatisation reduces the optimal r d subsidy furthermore privatisation improves social welfare but only when the number of firms is sufficiently large implementing solely a subsidy to r d does not lead to a privatisation neutrality theorem or irrelevance result

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

price vs quantity competition in oligopoly supergames abstract in a repeated oligopoly with differentiated products and firms following trigger strategies quantity competition leads to a less efficient outcome than price competition this result contrasts with the repeated duopoly result where price competition is less efficient under certain conditions

equilibrium prices in the bertrand and cournot oligopolies abstract the equilibrium prices for the bertrand and cournot oligopolies with product differentiation are compared if all firms have linear demand and cost functions and if in addition the jacobian matrix of the demand functions has a dominant negative diagonal the cournot equilibrium prices are not lower than the bertrand ones the general condition for the comparison of the bertrand and cournot equilibrium prices can be derived even if the nonlinearity is involved in the cost and or demand functions

can women have children and a career iv evidence from ivf treatments this paper introduces a new iv strategy based on ivf in vitro fertilization induced fertility variation among childless women to estimate the causal effect of having children on their career for this purpose we use administrative data on ivf treated women in denmark because observed chances of ivf success do not depend on labor market histories ivf treatment success provides a plausible instrument for childbearing our iv estimates indicate that fertility effects on earnings are i negative large and long lasting ii driven by fertility effects on hourly earnings and not so much on labor supply and iii much stronger at the extensive margin than at the intensive margin

on the dynamic efficiency of bertrand and cournot equilibria abstract this paper compares bertrand and cournot equilibria in a differentiated duopoly with r d research and development competition it shows that cournot competition induces more r d effort than bertrand competition however the price is lower and output is larger in bertrand than in cournot competition furthermore the bertrand equilibrium is more efficient than the cournot equilibrium if either r d productivity is low or spillovers are weak or products are very different if r d productivity is high spillovers are strong and goods are close substitutes then the bertrand equilibrium islessefficient than the cournot equilibrium journal of economic literatureclassification number l13

oligopoly games and the cournot bertrand model a survey traditional oligopoly models hold that firms compete in the same strategic variable output cournot or price bertrand alternatively a hybrid model allows some firms to compete in output and other firms to compete in price also known as the cournot bertrand model when the choice of strategic variable is endogenous the established dominant strategy is output competition a growing body of work demonstrates however that the cournot bertrand outcome can be a subgame perfect nash equilibrium in the presence of market asymmetries observations of real world markets consistent with cournot bertrand behavior bolster justification for the model and have stimulated an impressive and evolving literature on advances and applications we lay out the roots of the cournot bertrand model and explore a number of model developments we categorize 12 primary models in the literature based on alternative assumptions in particular some authors consider when the timing of play as well as the choice of strategic variable are endogenous altogether this research identifies when cournot bertrand behavior can emerge in a dynamic setting and under alternative market conditions we also review the cournot bertrand model applications in the fields of international economics industrial organization labor and public economics we expect the literature to continue to expand in the future

price vs quantity in oligopoly games abstract price setting and quantity setting oligopoly games lead to extremely different outcomes in the market one natural way to address this problem is to formulate a model in which some firms use price while the remaining firms use quantity as their decision variable we introduce a mixed oligopoly game of this type and determine its equilibria in addition we consider an extension of this mixed oligopoly game through which the choice of the decision variables can be endogenized we prove the emergence of the cournot game

welfare consequence of an asymmetric regulation in a mixed bertrand duopoly abstract i investigate an asymmetric duopoly where a public enterprise must supply the demand it faces while a private enterprise has no such obligation i show that such an asymmetric regulation yields the first best outcome walrasian equilibrium

motherhood and female labor supply in the developing world evidence from infertility shocks abstract we introduce a new instrument for family size infertility to investigate the causal relationship between children and female labor force participation infertility mimics an experiment where nature assigns an upper bound for family size independent of a woman s background this new instrument allows us to investigate the differential labor supply without restrictions on initial family size using the demographic and health surveys from 26 developing countries we show that ols estimates are biased upward we find that the presence of children affects neither the likelihood of work nor its intensity but impacts the type of work a woman pursues

the effect of a first child on female labor supply evidence from women seeking fertility services estimating the causal effect of a first child on female labor supply is complicated by the endogeneity of fertility this paper addresses this problem by focusing on a sample of women from the national survey of family growth nsfg who sought help to become pregnant after a certain period only some of these women gave birth results using this strategy show that having a first child younger than one year old reduces female employment by 26 percentage points these estimates are close to ols estimates from census data and to those from ols and fixed effects models on nsfg data

internal decision making rules and collusion we study the impact of internal decision making structures on the stability of collusive agreements to this end we use a three firm spatial competition model where two firms belong to the same holding company the holding company can decide to set prices itself or to delegate this decision to its local units it is shown that when transportation costs are high collusion is more stable under delegation furthermore collusion with maximum prices is more profitable if price setting is delegated to the local units profitability is reversed for low discount factors

children and their parents a review of fertility and causality childbearing decisions are not made in isolation they are taken in concert with decisions regarding work marriage health investments and stocks as well as many other observable and non observable considerations drawing causal inferences regarding the effect of additional children on family outcomes is complicated by these endogenous factors this paper lays out the issues involved in estimating the effect of additional child births on family outcomes and the assumptions underlying the range of estimators and methodologies proposed in the economic literature the common pitfalls of these estimators are discussed as well as their potential to bias our interpretation of the effect additional births have on children and parents both in the existing literature and in future work in the face of changing patterns of childbearing and child rearing

on the efficiency of bertrand and cournot equilibria with product differentation in a differentiated products setting with n varieties it is shown under certain regularity conditions that if the demand structure is symmetric and bertrand and cournot equilibria are unique then prices and profits are larger and quantities smaller in cournot than in bertrand competition and as n grows both equilibria converge to the efficient outcome at a rate of at least 1n if bertrand reaction functions slope upwards and are continuous then even with an asymmetric demand structure given any cournot equilibrium price vector one can find a bertrand equilibrium with lower prices in particular if the bertrand equilibrium is unique then it has lower prices than any cournot equilibrium

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

the effects of child bearing on married women s labor supply and earnings using twin births as a natural experiment we use exogenous variations in fertility due to twin births to measure the impact of an unplanned child on married women s labor supply and earnings although the overall effects of an unplanned birth on labor supply are small we find significant effects in the years immediately following the unplanned birth especially in 1970 we estimate that declining fertility explains between 6 and 13 percent of the increase in married women s labor supply between 1970 and 1980 twin births are also associated with a substantial short run loss in earnings this effect persists longer than the labor supply effects though it does eventually disappear

fertility at work children and women s labor market outcomes in urban ghana abstract while it is commonly assumed that fertility decreases female labor supply i show theoretically that fertility can increase female labor supply if returns to financial inputs in children are sufficiently high compared to returns to time investments using six rounds of a panel survey from urban ghana i find evidence of countervailing effects behind a net zero effect of young children on women s hours of work labor supply on the extensive margin drops but women who remain in the labor force increase their hours in response to a child women s labor supply particularly increases in response to a young child if there are older siblings or other adults in the household by contrast men s labor supply does not change in response to young children

price or quantity the strategic choice of subsidized firms in a mixed duopoly this paper investigates the endogenous choice of the strategic variable price or quantity taken in a mixed duopoly by a public and a private firm prior to market competition while matsumura and ogawa 2012 in a standard mixed duopoly find that price is the unique equilibrium we show that by introducing firm subsidization in the same setting quantity can constitute a dominant strategy equilibrium

on the sustainability of collusion in differentiated duopolies abstract we consider a rule designed to maintain collusion in a duopoly made up of firms producing differentiated products we analyse both price setting and quantity setting models and show that product differentiation plays a crucial role in determining the effectiveness of this rule our results contrast with those obtained by earlier writers

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

prisoners dilemma in duopoly super games abstract the choice between quantity and price in order to stabilize collusion is modeled here it is shown that this relocates the prisoners dilemma backward from the market stage to the stage where the market variable is chosen in order to sustain collusion and where discount rates appear as the payoffs likewise a prisoners dilemma arises also when both the market variable and the type of behavior cooperative or non cooperative are simultaneously chosen journal of economic literature classification numbers c72 d43 l13

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

welfare reducing licensing abstract in this paper we characterize situations where licensing a cost reducing innovation to a rival firm using two part tariff contracts a fixed fee plus a linear per unit of output royalty reduces social welfare we show that it occurs if i the firms compete in prices ii the innovation is large enough but not drastic and iii the goods are close enough substitutes moreover we show that regardless of the type of competition first the optimal contract always includes a positive royalty and second even drastic innovations are licensed whenever the goods are not homogeneous

children and their parents labor supply evidence from exogenous variation in family size although theoretical models of labor supply and the family are well developed there are few credible estimates of key empirical relationships in the work family nexus this study uses a new instrumental variable the sex composition of the first two births in families with at least two children to estimate the effect of additional children on parents labor supply in the united states instrumental variables estimates using the sex mix are substantial but smaller than the corresponding ordinary least squares ols estimates moreover unlike the ols estimates the female labor supply effects estimated using sex mix instruments appear to be absent among more educated women and women with high wage husbands we also find that married women who have a third child reduce their labor supply by as much as women in the full sample while there is no relationship between wives child bearing and husbands labor supply excerpt

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

cross border travellers and parallel trade implications for asian economies this paper explores the impact of parallel trade in an export market by cross border travellers on welfare of the home country in a model with heterogeneous consumers perceptions we show that such parallel trade when it is organised trading always hurts the home country welfare however when parallel trade is unorganised trading it might benefit the home country welfare provided that the size of the export market is relatively small along these lines we suggest optimal policy responses in the home country to parallel trade by cross border travellers the results of the paper yield insightful policy implications for asian economies

how to compete cournot versus bertrand in a vertical structure with an integrated input supplier we study whether a quantity or a price contract is chosen at equilibrium by one integrated firm and its retail competitor in a differentiated duopoly using a similar vertical structure arya et al 2008 show that bertrand competition is more profitable than cournot competition which contrasts with conventional wisdom in this article we first demonstrate that such a result is robust to the endogenous determination of the type of contract second by introducing managerial incentives in the model we find that delegation to managers may lead each firm to choose a quantity contract and as long as products are sufficiently differentiated entails conflicting choices causing nonexistence of equilibrium in pure strategies significantly high product substitutability reconciles firms objectives under delegation leading unique or multiple equilibria with symmetric types of contracts to arise

imported inputs and privatization in downstream mixed oligopoly with foreign ownership this paper examines welfare implications of privatization in a mixed oligopoly with vertically related markets where an upstream foreign monopolist sells an essential input to public and private firms located downstream in the domestic country the impact on domestic welfare of privatizing the downstream public firm is shown to contain three effects the first is an output distortion effect which negatively affects welfare since privatization decreases the production of final good for consumption the second is an input price lowering effect resulting from a decrease in derived demand for the input when the level of privatization increases a decrease in final good production lowers input demand causing input price to decline and domestic welfare to increase the third is a rent leaking effect associated with foreign ownership in the downstream private firm the rival domestic firm strategically increases its final good production causing profits accrued to foreign investors to increase and domestic welfare to decline without foreign ownership in the downstream private firm the optimal policy toward the public firm is complete privatization as the output distortion effect is dominated by the input price lowering effect with foreign ownership however complete privatization can never be socially optimal due to the additional negative impact on domestic welfare of the rent leaking effect we further discuss implications for domestic welfare under different privatization schemes e g selling the privatization shares to the upstream foreign monopolist or to the rival domestic firm

dynamic exchange rate equilibria with uncertain government policy in this paper we link two exchange rate literatures by showing how threats of asset controls yields determinate exchange rates in general equilibrium models with otherwise perfect capital markets and by showing how for certain sequences of threats exchange rate determination may be well explained by monetary variables we find that in general there exists no natural exchange rate and market rates may be sensitive to changed perceptions about future exchange rate intervention

the implicit costs of motherhood over the lifecycle cross cohort evidence from administrative longitudinal data it is well known that the explicit costs of raising a child have grown over the past several decades less well understood are the implicit costs of having a child and how they have changed over time in this article we are the first to examine the evolution of the implicit costs of motherhood over the lifecycle and across generations using high quality administrative data we estimate that the lifetime labor market income gap between mothers and women who never have children never mothers decreases from around 350 000 to 280 000 between women born in the late 1940s and late 1960s gaps tend to increase monotonically over the lifecycle and decrease monotonically between cohorts our evidence suggests that changes in the gaps are caused by changing labor force participation rates

should civil servants be restricted in wage bargaining a mixed duopoly approach abstract should civil servants employees in the public sector be allowed to bargain collectively to answer this question we construct a model of unionized mixed duopoly and examine the regulatory framework of public institutions especially focusing on a wage regulation imposed on the public firm the wage regulation turns out to yield critical welfare implications as it gives rise to two opposing strategic effects the wage regulation intensifies downstream market competition while it loosens upstream market competition the overall welfare effect is ambiguous depending crucially on the degree of product differentiation between the firms we also show that in contrast to the popular belief granting the right to bargain collectively to civil servants would not necessarily help them because they tend to demand excessively high wages when they are allowed to bargain collectively finally we briefly discuss a new perspective on the role of profit motives in public institutions when the wages are determined endogenously

motherhood and female labor force participation evidence from infertility shocks women are underrepresented in the paid labor force in both developed and developing countries recent scholarship has argued that labor force differentials are not due to gender per se but can be attributed to the fact that women disproportionately face the responsibilities associated with bearing and raising children while the negative relationship between the presence of children and participation in the labor force is well established interpretation of this relationship is complicated by the endogeneity of fertility the number of children a woman has is a choice variable which could be influenced by her labor force participation additionally there are likely to be omitted factors that influence both fertility and labor force participation for instance women with high career based unobservables such as ambition or talent may choose to have fewer or no children and these women may be overrepresented in the labor force thus the observed negative relationship between children and labor force participation could be spurious several studies have exploited exogenous changes in family size in order to identify the

mixed oligopoly privatization and subsidization abstract this paper demonstrates three effects of domestic production subsidies in a mixed oligopoly industry regarding privatization and efficiency first if subsidies are used before and after privatization welfare is unchanged by privatization second if subsidies are used only before privatization then privatization always lowers welfare regardless of the number of private firms in the industry third the subsidy contributes to overall efficiency in a mixed oligopoly due to cost distribution effects

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

intrahousehold bargaining female autonomy and labor supply theory and evidence from india standard models of labor supply predict that unearned income decreases labor supply we propose an alternative noncooperative household model in which a woman s unearned income improves her autonomy within the household which raises her gains from working and can increase her labor supply we find empirical support for this model using women s exposure to the hindu succession act in india as a source of exogenous variation in their unearned income exposure to the hindu succession act increases a woman s labor supply by between 3 8 and 6 1 percentage points particularly into high paying jobs autonomy increased by 0 17 standard deviations suggesting that control of income is a potential channel for these effects thus policies that empower women can have an additional impact on the labor market which can further reinforce autonomy increases

when is the local average treatment close to the average evidence from fertility and labor supply the local average treatment effect late may differ from the average treatment effect ate when those influenced by the instrument are not representative of the overall population heterogeneity in treatment effects may imply that parameter estimates from 2sls are uninformative regarding the average treatment effect motivating a search for instruments that affect a larger share of the population in this paper i present and estimate a model of home production with heterogeneous costs and benefits to fertility the results indicate that a sex preference instrument in taiwan produces iv estimates closer to the estimated ate than in the united states where sex preference is weaker

comparing cournot and bertrand in a homogeneous product market abstract this paper examines some general notions relating to the comparison of cournot and bertrand equilibrium outcomes results obtained by vives in this connection are reconsidered in a homogeneous product market and it is shown that these results are sensitive to the market sharing rules it is found that the results are always true under those market sharing rules which have the property of including the competitive equilibrium in the set of bertrand equilibria for example the capacity sharing rule if however the sharing rule does not have this property for example the equal sharing rule then the results referred to above may not hold when costs are asymmetric journal of economic literatureclassification numbers l13

price or quantity in tacit collusion abstract we investigate the choice of market variable price or quantity of an optimal implicit cartel if the discount factor is high the cartel can realize the monopoly profit in both cases otherwise it is optimal for the cartel to rely on quantities in the collusive phase if goods are substitutes and prices if goods are complements the reason is that this minimizes the gains from deviations from collusive play

mixed oligopoly public firm behavior and free private entry we analyze a mixed oligopoly with free entry by private firms assuming that a public firm maximizes an increasing function of output subject to a break even constraint we establish an irrelevance result whenever a mixed oligopoly is viable then aggregate output aggregate costs and welfare are the same with and without the public firm however replacing a viable mixed oligopoly with a public monopoly yields higher net welfare implications for privatization policy are suggested

distribution channel strategies in a mixed market abstract this paper studies equilibrium channel strategies in a mixed market with a public firm and a private firm the public firm is concerned with social welfare while the private firm aims to maximize its own profit each firm decides whether to adopt an integrated or a decentralized channel we examine two standard market competition modes bertrand and cournot within each competition mode we consider two typical vertical contracts wholesale price and two part tariff contracts our results suggest that equilibrium channel structures depend on the market competition mode the vertical contract form and the level of product substitutability specifically the channel strategy of the private firm depends mainly on the vertical contract form under a two part tariff contract the private firm always chooses decentralization under a wholesale price contract the private firm chooses integration for most scenarios except for highly substitutable products under bertrand competition i e under very intense competition the channel strategy of the public firm depends mainly on the competition mode under bertrand competition the public firm always chooses decentralization under cournot competition the public firm always chooses the opposite of the private firm s strategy