gender wage gaps reconsidered a structural approach using matched employer employee data in this paper we study the extent to which wage differentials between men and women can be explained by differences in productivity disparities in friction patterns segregation and wage discrimination for this purpose we propose an equilibrium search model that features rent splitting on the job search and two sided heterogeneity in productivity the model is estimated using german matched employer employee data overall the results reveal that female workers are less productive and more mobile than males in addition female workers have on average slightly lower bargaining power than their male counterparts

follower payoffs in symmetric duopoly games this paper compares the leader and follower payoff in a duopoly game as they arise in sequential play with the nash payoff in simultaneous play if the game is symmetric has a unique symmetric nash equilibrium and players payoffs are monotonic in the opponent s choice along their own best reply function then the follower payoff is either higher than the leader payoff or even lower than in the simultaneous game this gap for the possible follower payoff had not been observed in earlier duopoly models of endogenous timing

the symbiotic rebound effect in the circular economy abstract the circular economy has emerged as an important approach in addressing how society can use its resources more efficiently theoretical advancements in the circular economy have yielded benefits for both practice and policymaking however if the eco efficiency of resource use is to be improved then certain challenges that face the circular economy must be resolved one of these challenges concerns the rebound effect by investigating resource flow with a circular rather than linear system as well as within a producer producer rather than producer consumer type of relationship we identify a rebound effect that we term symbiotic rebound we differentiate it from other forms of rebound effect on the basis of its main driver opportunity costs drive a higher than expected use of resources in a circular economy rather than the usual driver of demand as found in other types of rebound in identifying describing and illustrating a symbiotic rebound effect we make two contributions first to the rebound literature and second to theory development on the circular economy

entry deterrence externalities and relative firm size most models of entry deterrence through preemptive investment consider either a monopolist or a cartel this suppresses an important question how does threat of entry affect capital choices of several noncolluding incumbents there are two opposing forces expanding capital to deter entry generates a public good to other incumbents but also increases the expanding firm s share of market output we address the trade off in a model of sequential entry with foresight where in the first stage capital choices are made sequentially and in the second stage the output interaction is cournot or competitive under competitive interaction we prove that the first entrant either admits all other potential entrants or deters all it never allows partial entry under cournot we find using simultaneous some rather surprising patterns easier entry can make the first entrant s capital larger or smaller the first entrant can be smaller than the second but is never less profitable the first entrant s profit is always reduced by increased entry threat but profits of other entrants can be increased

missing culture energy efficiency and lost causes abstract largely to the credit of brookes this journal has over the past few years carried a discussion that challenges the complacency of environmentalists and others over the role that improvements in energy efficiency can play as policy tools designed to mitigate the eco social costs of energy production transmission and consumption in this communication i will briefly review the main arguments in this debate with the intention of highlighting their reliance upon a self limiting set of assumptions that make any informed analysis of the relationship between people and energy technologies highly questionable this is particularly the case in the domestic and transport sectors here only a more culturally sensitive investigation of the possibilities and problems afforded by various technologies and of the public s growing awareness of socio environmental problems can support or counter the arguments raised by brookes and his adversaries

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

a search interpretation of male female wage differentials a general equilibrium search framework is used to examine the role of gender differences in labor market behavior patterns e g quit rates for personal reasons in determining gender wage differentials for samples of high school and college graduates from the national longitudinal survey of youth nlsy these behavioral patterns are found to be significantly different across the sexes and account for 20 30 of the wage differentials in particular they play a key role in explaining the male female wage differential that remains after controlling for the gender composition across occupations

challenges of existing in a market as a small low quality producer this paper explores the strategy of a small firm entering a monopolist s market thereby creating a duopoly market the small firm avoids competing with the larger incumbent firm by producing a lower quality product at a lower price the model here establishes an equilibrium under a specific set of assumptions and examines how exogenous factors affect prices qualities and profits although the strategy might allow the firm to enter and earn a profit the market conditions may make this position much less desirable to that of the large firm for several reasons in the case explored here where tastes for the product are uniformly distributed the small firm s profit is about six percent of that of the larger firm the smaller firm is more severely threatened by the entrance of a third firm furthermore even if the smaller firm can cut costs its position is not well suited for exploiting such increases in efficiencies

the effects of immigration in frictional labor markets theory and empirical evidence from eu countries immigrants are new comers in a labor market as a consequence they lack of social networks and other country specific and not directly productive valuable assets affecting their relative bargaining position against employers we introduce this simple observation into a matching model of the labor market and show that immigrants increase employment prospects of competing natives to test the predictions of our model we exploit yearly vari ations between 1998 and 2004 in the share of immigrants within occupations of 12 european countries we identify the causal impact of immigrants on natives employment rate using an instrumental variable strategy based on historical settlement patterns across host countries and occupations by origin countries we find that natives employment rate increases in oc cupations and sectors receiving more immigrants moreover we highlight the heterogeneity of this impact across groups of immigrants and host countries along dimensions that affect immigrants natives relative reservation wages

using latent variable approach to estimate china s economy wide energy rebound effect over 1954 2010 the energy rebound effect has been a significant issue in china which is undergoing economic transition since it reflects the effectiveness of energy saving policy relying on improved energy efficiency based on the ipat equation and brookes explanation of the rebound effect this paper develops an alternative estimation model of the rebound effect by using the estimation model and latent variable approach which is achieved through a time varying coefficient state space model we estimate china s economy wide energy rebound effect over 1954 2010 the results show that the rebound effect evidently exists in china as a result of the annual average of 39 73 over 1954 2010 before and after the implementation of china s reform and opening up policy in 1978 the rebound effects are 47 24 and 37 32 with a strong fluctuation and a circuitously downward trend respectively indicating that a stable political environment and the development of market economy system facilitate the effectiveness of energy saving policy although the energy saving effect of improving energy efficiency has been partly realised there remains a large energy saving potential in china

sequential location when transportation costs are asymmetric abstract in this paper i study sequential location by three firms when it is more costly for a consumer to move in one direction say to the left than to move to the right i provide a limit result for the ease when the difference between left and right transportation costs approaches zero this result resolves an equilibrium selection problem in the case of symmetric transportation costs i also discuss the entry pattern and the presence of a first mover advantage in the asymmetry case

product competition in microprocessors there have been some striking recent developments in the theory of spatial and product competition but relatively few empirical studies see however shaw 1982 a and b this paper is an attempt to assess the empirical usefulness of these developments drawing on the history of product competition in microprocessors over the period 1971 81 in particular our interest centres on attempts to introduce a role for what have been called agglomeration economies 1 that is mutual external economies accruing to two or more producers selling similar products in a recent survey graitson 1982 suggested that this particular development would provide theoretical models of special empirical relevance and the evidence presented here though by no means conclusive tends to support that view the paper is in five parts section i gives a brief review of some of the relevant developments in spatial and product competition theory section ii gives a brief account of how the wide variety of microprocessors will be classified for the purposes of this study section iii describes the history of developments in microprocessors over the period 1971 to 1981 and section iv assesses the theoretical developments in the light of this evidence finally section v summarises the main points of the paper

an empirical equilibrium job search model with search on the job and heterogeneous workers and firms in this article we present and estimate a synthesis of previous equilibrium search models allowing for continuous distributions of workers opportunity costs of employment as well as firms productivities the model allows for on the job search and we assume that job offer arrival rates for workers are independent of their labor market state we derive the theoretical implications of these assumptions we provide simulations and we develop a semiparametric estimation procedure that we apply to a dataset of individual labor market histories

gender discrimination estimation in a search model with matching and bargaining this article develops a search model of the labor market with matching bargaining and employers taste discrimination in which under necessary but standard distributional assumption it is possible to separately identify gender discrimination and unobserved productivity differences the equilibrium shows that both prejudiced and unprejudiced employers wage discriminate maximum likelihood estimates on cps data indicate that half of the employers are prejudiced average female productivity is 6 5 lower and two third of the gender earning differential may be explained by prejudice an affirmative action policy is implemented resulting in a redistribution of welfare from men to women at no cost for employers welfare

being a leader or a follower this paper deals with the analysis of conflicts in duopoly situations in particular with the distribution of roles in the von stackelberg framework which firm will be the leader which firm the follower under what circumstances will firms find a mutually advantageous distribution of roles will they fight for leadership or followship in von stackelberg s analysis of duopoly either firms do not choose their respective roles or they fight for leadership this situation is due to the particular strategy space namely the quantity to produce of an homogeneous good we extend here the strategy space to price quantity pairs we show that if costs are identical or similar then both firms will prefer the role of follower if there is a significant cost differential between the firms then the non cooperative equilibrium can only be of two types either the less efficient firm will act as the leader selling a limited quantity at a low price and the more efficient firm as the follower selling to the residual demand at a higher price or the more efficient firm acting as leader will drive the less efficient firm out of the market by adopting a limit pricing strategy but in so doing that firm makes less profits than if it acts as follower we suggest that it is not unreasonable to expect that firms in a duopoly framework will tend to coordinate on their mutually advantageous role distribution even if they compete in a non cooperative strategic way in terms of both prices and quantities

an equilibrium model of search unemployment this paper develops a simple general equilibrium model with sequential search in which a nondegenerate wage offer distribution is endogenously determined we use this model to analyze the comparati

on the job search and the wage distribution the article structually estimates an on the job search model of job separations given each employer pays observably equivalent workers the same but wages are dispersed across employers an employer s separation flow is the sum of an exogenous outflow unrelated to the wage and a job to job flow that decreases with the employer s wage using data from the danish integrated database for labour market research the empirical results imply as predicted by theory that search effort declines with the wage furthermore the estimates explain the employment effect defined as the horizontal difference between the distribution of wages earned and the wage offer distribution

differences in work conditions between natives and immigrants preferences vs outside employment opportunities abstract immigrants are disproportionately employed in agriculture and construction sectors with relatively high injury rates what pushes immigrants to accept riskier and more strenuous work conditions we propose a circular model and show that differences in average work conditions borne by natives and immigrants are driven by both preferences and unearned income using french data we find that in line with the model s predictions i rigid wages are associated with a larger immigrant native gap in work conditions ii high unearned income individuals benefit on average from better work conditions iii for immigrants and natives with high unearned income differences in demographic characteristics explain part of the immigrant native gap in work conditions in contrast the gap largely persists among low unearned income people even once we have imposed identical demographic composition among them this suggests that there must be other factors that influence preferences over work conditions and that are missing in our empirical analysis

migration and wage setting reassessing the labor market effects of migration in this paper we employ a wage setting approach to analyze the labor market effects of immigration into germany from 1980 to 2004 this enables us to consider labor market rigidities which are prevalent in europe we find that the elasticity of the wage setting curve is particularly high for young workers moreover natives and foreigners are imperfect substitutes the wage and employment effects of immigration depend on the skill structure of the immigrant workforce because the foreign labor supply shift has mainly affected the high skilled labor market segment the 4 percent increase of the workforce through immigration has not increased either aggregate or foreign unemployment

understanding the native immigrant wage gap using matched employer employee data evidence from germany in this article the author proposes a new method for measuring wage discrimination that builds on the methodology first developed by hellerstein and neumark 1999 the author s method has three m

jevons paradox revisited the evidence for backfire from improved energy efficiency beginning with william stanley jevons in 1865 a number of authors have claimed that economically justified energy efficiency improvements will increase rather than reduce energy consumption jevons paradox is extremely difficult to test empirically but could have profound implications for energy and climate policy this paper summarises and critiques the arguments and evidence that have been cited in support of jevons paradox focusing in particular on the work of len brookes and harry saunders it identifies some empirical and theoretical weaknesses in these arguments highlights the questions they raise for economic orthodoxy and points to some interesting parallels between these arguments and those used by the biophysical school of ecological economics while the evidence in favour of jevons paradox is far from conclusive it does suggest that economy wide rebound effects are larger than is conventionally assumed and that energy plays a more important role in driving productivity improvements and economic growth than is conventionally assumed

should germany have built a new wall macroeconomic lessons from the 2015 18 refugee wave abstract in 2015 2016 germany experienced a wave of predominantly low skilled refugee immigration we evaluate its macroeconomic and distributional effects using a quantitative overlapping generations model calibrated using german micro data to replicate education and productivity differentials between foreign born and native workers workers are modelled as imperfect substitutes in aggregate production leading to endogenous wage differentials we simulate the dynamic effects of this refugee wave with specific focus on the welfare impact on low skilled natives our results indicate that the small losses this group suffers can be compensated by welfare gains of other parts of the native population

environmental rebounds backfires macroeconomic implications for the promotion of environmentally friendly products abstract this paper develops a dynamic two good clean and dirty goods two sector model to explore the implications of the macroeconomic environmental rebound backfire effect for environmentally friendly product promotions on not only the demand side a subsidy on the clean good consumption but also the supply side a technology promotion in the clean good production the macroeconomic environmental rebound backfire is decomposed into three effects the substitution wealth and sectoral reallocation effects we show that the steady state pollution stock exhibits a u shaped relationship with either demand side or supply side green promotions our calibrated result indicates that in terms of pollution the macroeconomic rebound effectfor the economy as a whole appears to be substantial more pronounced rebound effects are present when the elasticity of substitution between the clean and dirty good consumption is lower the labor supply is more elastic the environmental efficiency of clean goods is lower and the technology level in the clean good production is higher we also show that a pollution rebound can result in a social welfare improvement implying that the rebound effect somewhat improves economic efficiency and so policies aimed at mitigating the rebound effect may be counterproductive from a welfare perspective

communication energy efficiency and economic fallacies abstract the sharpening energy efficiency debate has revived claims that the apparent savings from using more efficient technologies would be largely offset by the macroeconomic response the tendency to use more energy services because they are made cheaper when energy price or availability constrains demand this is correct in more normal circumstances it may be true for efficiency changes which occur as part of general economic trends but not for policy driven measures aimed at bringing more efficient technologies into imperfect markets in such cases there will usually be real net energy savings only slightly smaller than those suggested by a simple engineering analysis and clear economic benefits

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

evidence on agglomeration in quality space this paper is an empirical study of agglomeration in quality space data has been collected for 175 west german commodities that the consumer testing agency test has tested on a number of quality characteristics for a number of brands for each commodity thus providing product positions in quality space the major findings are that agglomeration seems to be the norm rather than the exception an d that the market does not usually fail consumers wanting a high qualit y brand but may fail consumers wanting a low quality brand copyright 1988 by blackwell publishing ltd

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

on the rebound feedback between energy intensities and energy uses in iea countries abstract the interaction or feedback between energy efficiencies or energy intensities and energy use has long been the topic of debate some have argued that energy efficiency improvements by reducing energy intensities and therefore lowering the cost of energy services would lead to rebound effects offsetting much or all of any initial savings in energy in this paper we analyse historical data on energy use efficiency and pricing in different sectors to try and identify rebounds for the period of our data since about 1970 we show that key measures of activity car use manufacturing output and structure house area etc have changed little in response to changes in energy prices or efficiency instead continuing their long term evolution relative to gdp or other driving factors while our analysis cannot disentangle more macro level economic feedbacks in a detailed way we show indirectly that such effects also appear to have been small over the 1970s and 1980s overall our analysis of disaggregated sectoral and subsectoral energy use and activity trends in a variety of iea economies suggests that any feedback effect is small compared to both the effects on energy use of changes in energy intensities and overall economic growth we conclude that most of the improvements in energy efficiencies led to reductions in energy intensities observed in the 1970s and 1980s weighted by 1990 activity levels intensities were roughly 15 20 lower in 1994 5 than in 1973 which in turn meant real savings of energy energy demand in iea countries is roughly this much below what it would have been for the same gdp had these savings not occurred rebounds may have taken back some of the overall savings but most remain even after the fall of oil prices in 1986 any boost to gdp as a result of these savings could not have been sufficient to increase energy demand enough to significantly alter these conclusions that the savings remained after the fall in oil prices supports the notion that net savings restrained energy growth relative to gdp in some formulations arise from technological progress even if energy prices do not increase how far this effect can reach however is a matter of considerable debate

product proliferation in characteristics space the uk fertiliser industry in recent years a number of theoretical papers have addressed both the positive and normative aspects of the problem of how competitive products may be located in characteristics space the major theoretical antecedents have been hotelling s analysis of spatial competition 6 chamberlin s analysis of product differentiation 1 2 and lancaster s goods characteristics theory of demand 7 unfortunately there has been little corresponding empirical analysis two approaches in the theoretical analysis seem to have predominated firstly the examination of the welfare implications of product variety offered in equilibrium conditions 2 and secondly the dynamics of product competition using the spatial competition analogy 3 this paper which adopts the second approach uses an adaptation of lancaster s goods characteristics framework it examines the process of product competition in the uk agricultural fertiliser market the first and second sections briefly outline the main features of the goods characteristics and spatial competition theories and the uk fertiliser market respectively the third section contains the empirical analysis

endogenous price leadership we consider a linear price setting duopoly game with differentiated products and determine endogenously which of the players will lead and which one will follow while the follower role is most attractive for each firm we show that waiting is more risky for the low cost firm so that consequently risk dominance considerations as in harsanyi and selten a general theory of equilibrium selection in games mit press cambridge ma 1988 allow the conclusion that only the high cost firm will choose to wait hence the low cost firm will emerge as the endogenous price leader

vertical product differentiation with entry abstract this paper examines the non cooperative behaviour of established firms that compete in product quality and prices while foreseeing the effects of their rivalry on the decisions made by the later entrants we prove an existence and uniqueness of the equilibrium and show that the dominant firms engage in maximal product differentiation i e select the highest and lowest technologically feasible qualities later entrant however always selects an intermediate quality moreover we show that the equilibrium configuration is identical to that generated by perfect foresight equilibrium in a model of sequential entry furthermore the profits earned by each firm are ranked in the same order as the qualities implifying that the later entrant despite being the last mover ends up with higher profits and larger market share than one of the incumbents

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

the composition of wage differentials between migrants and natives we consider the role of unobservables such as differences in search frictions reservation wages and productivities for the explanation of wage differentials between migrants and natives we disentangle these by estimating an empirical general equilibrium search model with on the job search due to bontemps et al 1999 on segments of the labour market defined by occupation age and nationality using a large scale german administrative dataset the native migrant wage differential is then decomposed into several parts and we focus especially on the component that we label migrant effect being the difference in wage offers between natives and migrants in the same occupation age segment in firms of the same productivity counterfactual decompositions of wage differentials allow us to identify and quantify their drivers thus explaining within a common framework what is often labelled the unexplained wage gap

employment wages and the economic cycle differences between immigrants and natives in this paper we analyse differences in the cyclical pattern of employment and wages of immigrants and natives for two large immigrant receiving countries germany and the uk we show that despite large differences in their immigrant populations there are similar and significant differences in cyclical responses between immigrants and natives in both countries even conditional on education age and location we decompose changes in outcomes into a secular trend and a business cycle component we find significantly larger unemployment responses to economic shocks for low skilled workers relative to high skilled workers and for immigrants relative to natives within the same skill group there is little evidence for differential wage responses to economic shocks we offer three explanations for these findings an equilibrium search model where immigrants experience higher job separation rates a model of dual labour markets and differences in the complementarity of immigrants and natives to capital

differences in labor supply to monopsonistic firms and the gender pay gap an empirical analysis using linked employer employee data from germany this article investigates women s and men s labor supply to the firm within a semistructural approach based on a dynamic model of new monopsony using methods of survival analysis and a large linked employer employee data set for germany we find that labor supply elasticities are small 1 9 3 7 and that women s labor supply to the firm is less elastic than men s which is the reverse of gender differences in labor supply usually found at the level of the market our results imply that at least one third of the gender pay gap might be wage discrimination by profit maximizing monopsonistic employers

strategic deterrence of sequential entry into an industry industrial entry deterrence is typically studied in a setting where an established firm or firms confront and attempt to deter a single potential competitor during the evolution of most industries however a sequence of firms enters or attempts to enter at distinct points in time consideration of issues arising from sequential entry fundamentally alters the qualitative nature of the deterrence decision undertaken by incumbent firms within a sequential setting counterintuitive behavior may be observed specifically numerous government policies designed to decrease industrial concentration penalties for anticompetitive practices subsidization of entry consent decrees restructuring industries may have the opposite effect

discrimination and skill differences in an equilibrium search model in this paper we analyze an equilibrium search model with three sources for wage an d unemployment differentials among workers with the same observed human capital but differen t appearance race unobserved productivity skill search in tensities and discrimination becker 1957 due to an appearance based employer disutility factor because they affect the earnings distributions differently empirical identification of these potential sources for the explanation of wage an d unemployment differentials is possible we show that the structural parameters of the model including the firm s disutility from certain workers are identifiab le using standard labor market survey data we demonstrate identification using data from the national longitudinal survey of youth estimation of these parameters by matching moments from a sample of black and white high school graduate s implies a blacks have a 9 lower productivi ty level than whites b the disutility factor in employer s preferences is one third of the white s productivity level and c 50 of firms have a disutility factor in their utility toward blacks

the labor market impact of immigration in western germany in the 1990 s in this article we estimate the wage and employment effects of recent immigration in western germany using administrative data for the period 1987 2001 and a labor market equilibrium model we find that the substantial immigration of the 1990s had very little adverse effects on native wages and on their employment levels instead it had a sizeable adverse employment effect on previous immigrants as well as a small adverse effect on their wages these asymmetric results are partly driven by a higher degree of substitution between old and new immigrants in the labor market and in part by the rigidity of wages in less than flexible labor markets in a simple counter factual experiment we show that in a world of perfect wage flexibility and no unemployment insurance the wage bill loss of old immigrants would be much smaller

product differentiation and price collusion the paper analyzes the implications of price collusion with or without monetary transfers on the degree of horizontal product differentiation we find that the principle of minimum differentiation holds i e firms sell the same product when there is no possibility of monetary transfers on the contrary we find that the presence of monetary transfers may induce some product differentiation the reason is that when monetary transfers are possible it is not essential per se to be well located in terms of relative market shares the outcome is then shown to be driven by only two forces 1 choosing a product closer to the competitor s improves the bargaining power 2 choosing a product closer to the one maximizing the joint profit improves the global firm efficiency

strategic it investments the impact of switching cost and declining it cost the declining cost of information technology it over time provides the later entrant in information intensive industries a cost advantage on the other hand the earlier entrant has the potential to build and retain its market share if consumers incur a cost in switching to the later entrant we investigate the impact of a decline in the it cost and the switching cost on it investment strategies of firms we find that a declining it cost always hurts the early entrant s profit the early entrant may assume an aggressive investment strategy or a defensive investment strategy in response to a decline in the it cost depending on whether the switching cost relative to the extent of decline in the it cost is high or low respectively a decline in it cost also hurts the later entrant s profit if the switching cost is high a surprising result is that when the decline in the it cost is higher than a critical value a higher switching cost increases consumer surplus when firms control the switching cost the early entrant increases its investment in quality and switching cost and maintains its quality and its market share leadership irrespective of the extent of decline in the it cost

dominant firms and their alleged decline abstract by way of a survey of recent literature on the theory of strategic competition this paper focuses on the question of whether dominant firms decline the traditional argument suggesting decline is found to be based on a rather unsatisfactory modelling of dominance and more acceptable conceptualizations suggest that such privileged positions will persist

dynamic duopoly prices and quantities we study a dynamic model of duopoly in which firms choose both prices and quantities if quantity capacity choices are relatively inflexible firms generally carry excess idle capacity in equilibrium because of this enforcement cost firms are unable to achieve monopoly levels this contrasts with models in which which firms compete in either prices or quantities alone on the other hand if capacities are flexible firms may be able to sustain monopoly behaviour

production in advance versus production to order abstract we use a theoretical framework to compare production in advance type and production to order type environments carrying out our analysis in the framework of a symmetric capacity constrained bertrand edgeworth duopoly game we prove that the equilibrium profits are the same in case of production in advance and production to order in addition advance production results in higher prices than production to order if both games have an equilibrium in nondegenerated mixed strategies

endogenous diffusion of technology abstract this paper presents a positive theory of diffusion of technology it examines a two period model strategic firms are confronted by a process technology with an uncertain reduction in marginal costs the uncertainty is automatically resolved between the two periods adoption in the first period yields a leadership advantage relative to firms that do not adopt while simultaneous adoption by firms results in a cournot equilibrium the firms strategies are both production quantities and adoption timings these decisions are made at the same time thus firms face a trade off between early adoption and possibly reaping first mover advantages on one hand and deferring the adoption decision until after all the uncertainty is resolved but face the possibiity of being a follower in the market interestingly an endogenously determined diffusion rate is obtained as a pure strategy nash equilibrium of this game this means that while adoption and diffusion of technology results with probability one diffusion of a bad innovation is also possible it is also shown that in a market with one large firm and a nonatomic continuum of small firms there is a unique nash equilibrium in which the large firm adopts first and is a stackelberg leader and all the small firms decide whether or not to adopt after the uncertainty is resolved the implication of this result is simply that the diffusion of technology is to some extent determined by the relative size of firms in the industry

an empirical equilibrium search model of the labor market in structural empirical models of labor market search the distribution of wage offers is usually assumed to be exogenous however because in setting their wages profit maximizing firms should consider the reservation wages of job seekers the wage offer distribution is essentially endogenous we investigate whether a proposed equilibrium search model in which the wage offer distribution is endogenous is able to describe observed labor market histories we find that the distributions of job and unemployment spells are consistent with the data and that the qualitative predictions of the model for the wages set by employers are confirmed by wage regressions the model is estimated using panel data on unemployed and employed individuals we distinguish between separate segments of the labor market and we show that productivity heterogeneity is important to obtain an acceptable fit to the data the results are used to estimate the degree of monopsony power of firms further the effects of changes in the mandatory minimum wage are examined

the greenhouse effect the fallacies in the energy efficiency solution abstract the view that widespread improvements in energy efficiency can by themselves do anything to halt the build up of greenhouse gases around the globe is fundamentally unsound it is based on the same fallacies that underlie the claim that energy savings from improving efficiency can substitute for new energy supply the paper by keepin and kats1 claiming that per tonne of coal not burned improvements in energy efficiency are more cost effective than substituting nuclear for coal fired power is therefore an irrelevancy as far as this debate is concerned reductions is energy intensity of output that are not damaging to the economy are associated with increases not decreases in energy demand at the macroeconomic level even within the boundaries of their own flawed approach their attempt2 to refute the critique of their thesis made by jones3 was little more than misdirected grape shot with no discernable connected thread of argument

firm scale and the endogenous timing of entry a choice between commitment and flexibility abstract this paper presents a model of stochastic oligopoly with demand uncertainty where firms endogenously choose entry timing we examine two extreme types of market structure and show that the equilibrium correspondence that connects them is continous with two identically sized firms there are symmetric cournot type equilibria where the probability of early entry declines with greater uncertainty and for low uncertainty two asymmetric equilibria with one large firm with a continuum of nonatomic firms there is a unique stackelberg equilibrium we conclude that the behavior of a dominant firm with a finite fringe can be approximated by stackelberg equilibrium journal of economic literatureclassification numbers d21 l11

wage differentials employer size and unemployment the unique equilibrium solution to a game in which a continuum of individual employers choose permanent wage offers and a continuum of workers search by sequentially sampling from the set of offers is characterized wage dispersion is a robust outcome provided that workers search while employed as well as when unemployed the unique nondegenerate equilibrium distribution of wage offers is constructed for three cases 1 identical workers and employers 2 identical employers and an atomless distribution of worker supply prices and 3 identical workers and an atomless distribution of job productivities copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

is there monopsonistic discrimination against immigrants the authors investigate immigrants and natives labor supply to the firm within an estimation approach based on a dynamic monopsony framework applying duration models that account for unobserved worker heterogeneity to a large administrative employer employee data set for germany they find that immigrants supply labor less elastically to firms than do natives under monopsonistic wage setting the estimated elasticity differential predicts a 7 7 log points wage penalty for immigrants thereby accounting for the entire unexplained native immigrant wage differential of 5 8 to 8 2 log points when further distinguishing immigrant groups differing in their time spent in the german labor market their immigration cohort and their age at entry the authors find that the observed unexplained wage differential is larger for those groups that show a larger elasticity differential relative to natives these findings not only suggest that search frictions are a likely cause of employers more pronounced monopsony

divisionalization and entry deterrence this paper assumes that incumbent firms can create new independent divisions more cheaply than potential entrants who must incur the additional overhead costs of new entry the main theoretical result is that such divisionalization ability leads perfectly informed incumbents to preempt all rational entry into their industries in contrast existing models of entry deterrence imply that informed incumbents even those with steadily decreasing average costs will often allow rational entry our result may explain why successful large scale entry by firms with no informational advantage is extremely rare the use of divisions to preempt entry may also explain why large firms in high profit oligopolies often divisionalize allowing their divisions to compete freely despite the negative pecuniary externality that each division imposes on others

the role of indifference in sequential models of spatial competition an example abstract this note shows how indifference expands the set of subgame perfect equilibria in an illustrative model of spatial competition the model concerns sequential location for three firms on a unit segment with consumers buying the good from the nearest firm indifference occurs because when the third firm enters in between the first two it gets the same payoff independently of its particular location the note ends with a discussion of a particular equilibrium outcome the one where the indifferent player is allowed to use his indifference optimally in order to influence other players strategies