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on Industrial Organization |
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Issue of 2009‒08‒08
six papers chosen by |
| By: | Gaston Llanes (Harvard Business School, Entrepreneurial Management Unit); Stefano Trento (Universitat Autonoma de Barcelona, Departament d'Economia i Historia Economica,) |
| Abstract: | We present a dynamic model where the accumulation of patents generates an increasing number of claims on sequential innovation. We study the equilibrium innovation activity under three regimes: patents, no-patents and patent pools. Patent pools increase the probability of innovation with respect to patents, but we also find that: (1) their outcome can be replicated by a licensing scheme in which innovators sell complete patent rights, and (2) they are dynamically unstable. We find that none of the above regimes can reach the first or second best. Finally, we consider patents of finite duration and determine the optimal patent length. |
| Keywords: | Sequential Innovation, Patent Pools, Anticommons |
| JEL: | L13 O31 O34 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:10-005&r=ind |
| By: | Rinaldo Brau; C. Carraro |
| Abstract: | This paper analyses the conditions under which a group of firms is incentivised to sign a voluntary agreement (VA) to control polluting emissions even in the presence of free-riding by other firms in the industry. We consider a policy framework in which firms in a given industry decide whether or not to sign a VA proposed by an environmental regulator. We identify the features that a VA should possess in order to incentivize firms to participate in the VA and to enhance its economic and environmental effectiveness. Under very general conditions on the shape of the demand schedule, we obtain the following results. First, a VA does not belong to the equilibrium of the coalition game when benefits from voluntary emission abatement are a pure public good. Second, in the presence of partial spillovers – i.e. when signatories obtain more benefits from the VA than non-signatories – a VA belongs to the equilibrium only if a minimum participation rule is guaranteed. Third, a VA with a minimum participation rule and a minimum mandatory emission abatement may improve welfare (and even industry profits) compared to a VA in which firms are free to set their own profit maximising abatement level. |
| Keywords: | Voluntary agreement; voluntary approaches; new policy instruments; environmental regulation; coalition structures; emission standards |
| JEL: | D21 K32 Q28 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:200907&r=ind |
| By: | Christian Schultz (Department of Economics, University of Copenhagen) |
| Abstract: | The paper considers tacit collusion in markets which are not fully transparent on both sides. Consumers only detect prices with some probability before deciding which fi?rm to purchase from, and each fi?rm only detects the other fi?rm's price with some probability. Increasing transparency on the producer side facilitates collusion, while increasing transparency on the consumer side makes collusion more difficult. Conditions are given under which increases in a common factor, affecting transparency positively on both sides, are pro-competitive. With two standard information technologies, this is so, when fi?rms are easier to inform than consumers. |
| Keywords: | transparency; tacit collusion; cartel theory; competition policy; internet |
| JEL: | L13 L40 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuieci:2009-01&r=ind |
| By: | L. Lambertini |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:672&r=ind |
| By: | L. Lambertini |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:671&r=ind |
| By: | Du, Ying; Stiegert, Kyle |
| Abstract: | This article develops a methodology for empirically analyzing vertically strategic interactions in a multi-level supply channel. The model is used to analyze the vertical channel for U.S. butter manufacturing and retailing. Aggregating products to the firm level and using a nonlinear AIDS demand system under alternative strategic pricing assumptions is estimated using full information maximum likelihood (FIML) for seven geographic markets from 1998-2002. The market demand for butter was found to very price elastic. Furthermore, cross price elasticities between private labels and the two large national brands were also very elastic. The selected market structure was one indicating category profit maximization of national brands (separate from private label) at the retail level, Vertical Nash competition in the vertical channel, and Bretrand competition at the manufacturing level. Our results strongly suggest that the retail market for food products is impacted by the underlying vertical structure. The study provides useful measures of imperfect competition in the retail manufacturing sector. |
| Keywords: | Vertical interaction, market structure, strategic pricing, market power, AIDS model, butter., Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Industrial Organization, L13, L22, L66, |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:51712&r=ind |