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

ten little treasures of game theory and ten intuitive contradictions this paper reports laboratory data for games that are played only once these games span the standard categories static and dynamic games with complete and incomplete information for each game the treasure is a treatment in which behavior conforms nicely to predictions of the nash equilibrium or relevant refinement in each case however a change in the payoff structure produces a large inconsistency between theoretical predictions and observed behavior these contradictions are generally consistent with simple intuition based on the interaction of payoff asymmetries and noisy introspection about others decisions

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

strikes and holdouts in wage bargaining theory and data we develop a private information model of union contract negotiations in which disputes signal a firm s willingness to pay previous models have assumed that all labor disputes take the form of a strike yet a prominent feature of u s collective bargaining is the holdout negotiations often continue without a strike after the contract has expired production continues with workers paid according to the expired contract we analyze the union s decision to strike or hold out and highlight its importance to strike activity strikes are more likely to occur after a drop in the real wage or a decline in unemployment

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

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

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

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

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

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

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

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

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

an introduction to applicable game theory this paper offers an introduction to game theory for applied economists i try to give simple definitions and intuitive examples of the basic kinds of games and their solution concepts there are four kinds of games static or dynamic and complete or incomplete information complete information means there is no private information the corresponding solution concepts are nash equilibrium in static games of complete information backwards induction or subgame perfect nash equilibrium in dynamic games of complete information bayesian nash equilibrium in static games with incomplete information and perfect bayesian or sequential equilibrium in dynamic games with incomplete information the main theme of the paper is that these solution concepts are closely linked as we consider progressively richer games we progressively strengthen the solution concept to rule out implausible equilibria in the richer games that would survive if we applied solution concepts available for simpler games in each case the stronger solution concept differs from the weaker concept only for the richer games not for the simpler games

bundled payments for healthcare services proposer selection and information sharing the centers for medicare and medicaid services cms has introduced a bundled payments for care improvement bpci initiative each bundle pertains to a specific medical condition a set of linked services and a length of time referred to as an episode of care proposers choose bundles design service chains and propose target values of quality metrics and payments per episode expert panels evaluate proposals based on cms announced relative weights but there is no limit on the number of proposers that may be selected moreover there is no minimum score that will guarantee selection which makes selection uncertain for proposers we develop normative models for the parameter selection problems faced by potential proposers within the cms proposal selection process proposers have private information about their costs of achieving different quality targets which determine their equilibrium responses we show that an optimal strategy for cms under its current approach may be to either announce a fi

incorporating asymmetric distributional information in robust value at risk optimization value at risk var is one of the most widely accepted risk measures in the financial and insurance industries yet efficient optimization of var remains a very difficult problem we propose a computationally tractable approximation method for minimizing the var of a portfolio based on robust optimization techniques the method results in the optimization of a modified var measure asymmetry robust var arvar that takes into consideration asymmetries in the distributions of returns and is coherent which makes it desirable from a financial theory perspective we show that arvar approximates the conditional var of the portfolio as well numerical experiments with simulated and real market data indicate that the proposed approach results in lower realized portfolio var better efficient frontier and lower maximum realized portfolio loss than alternative approaches for quantile based portfolio risk minimization

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

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

regulation competition and liberalization in many countries throughout the world regulators are struggling to determine whether and how to introduce competition into regulated industries this essay examines the complexities involved in the liberalization process while stressing the importance of case specific analyses this essay distinguishes liberalization policies that generally are procompetitive from corresponding anticompetitive liberalization policies

games with incomplete information a simplified exposition with inventory management applications abstract in most existing literature in supply chain management it is assumed that the players possess complete information about the game i e the players payoff objective functions are assumed to be common knowledge for static and dynamic games with complete information the nash equilibrium and subgame perfect equilibrium are the standard solution concepts respectively for static and dynamic games with incomplete information the bayesian nash equilibrium and perfect bayesian equilibrium respectively are used as solution concepts after presenting a brief review of the static and dynamic games under complete information the application of these two games in inventory management is illustrated by using a single period stochastic inventory problem with two competing newsvendors next we illustrate the bayesian nash and perfect bayesian equilibrium solution concepts for the static and dynamic games under incomplete information with two competing newsvendors the expository nature of our paper may help researchers in inventory supply chain management gain easy access to the complicated notions related to the games played under incomplete information

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

inter firm trade finance in times of crisis the paper discusses the main features that distinguish inter firm international trade finance from alternative sources of financing on the one hand inter firm trade finance could help overcome informational problems associated with other lending relationships on the other it may contribute to propagate shocks due to the interconnection among firms along credit chains the paper evaluates the potential effects of a financial crisis on the use of trade credit for firms operating in developing countries it argues that while the advantages of trade credit might remain largely unexploited due to poor legal institutions the disadvantages might be exacerbated because of these firms greater exposure to a default chain based on these arguments a menu of choices is identified for what policymakers can do to boost firms access to inter firm trade finance in times of crisis

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

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

the economics of convention c onventions regulate much of economic and social life yet they have received surprisingly little attention from economists by a convention we mean a pattern of behavior that is customary expected and self enforcing everyone conforms everyone expects others to conform and everyone has good reason to conform because conforming is in each person s best interest when everyone else plans to conform lewis 1969 familiar examples include following rules of the road adhering to conventional codes of dress and using words with their conventional meanings conventions with direct economic implications include species of money and credit industrial and technological standards accounting rules and forms of economic contracts indeed it would scarcely be an exaggeration to say that almost all economic and social institutions are governed to some extent by convention the main feature of a convention is that out of a host of conceivable choices only one is actually used this fact also explains why conventions are needed they resolve problems of indeterminacy in interactions that have multiple equilibria indeed from a formal point of view we may define a convention as an equilibrium that everyone expects in interactions that have more than one equilibrium the economic significance of conventions is that they reduce transaction costs imagine the inconvenience if whenever two vehicles approached one another the important exceptions are sugden 1986 and ullman margalit 1977 the interested reader might also refer to the symposium on social norms that appeared in the fall 1989 issue of this journal with articles by sugden 1989 and elster 1989

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

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

using privileged information to manipulate markets insiders gurus and credibility access to private information is shown to generate both the incentives and the ability to manipulate asset markets through strategically distorted announcements the fact that privileged information is noisy interferes with the public s attempts to learn whether such announcements are honest it allows opportunistic individuals to manipulate prices repeatedly without ever being fully found out this leads us to extend sobel s 1985 model of strategic communication to the case of noisy private signals our results show that when truthfulness is not easily verifiable restrictions on trading by insiders may be needed to preserve the integrity of information embodied in prices

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