nep-ind New Economics Papers
on Industrial Organization
Issue of 2011‒03‒26
seven papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Do followers really matter in Stackelberg competition? By Ludovic A. Julien; Olivier Musy; Aurélien W. Saïdi
  2. A Generalized Nash-Cournot Model for the North-Western European Natural Gas Markets with a Fuel SubstitutionDemand Function: The GaMMES Model By Ibrahim Abada; Vincent Briat; Steve A. Gabriel; Olivier Massol
  3. Consumer Reactions To Unobserved Changes in Price Schedules By Peter Katuscak
  4. Intellectual Property Rights Protection and Enforcement in a Software Duopoly By Jiri Strelicky; Kresimir Zigic
  5. The Telecommunications Industry and Economic Growth: How the Market Structure Matters By Vahagn Jerbashian
  6. R&D collaboration with uncertain intellectual property rights By Czarnitzki, Dirk; Hussinger, Katrin; Schneider, Cédric
  7. EU Patent System: to be or not to be? By Ãlvaro Escribano; Marco S. Giarratana

  1. By: Ludovic A. Julien; Olivier Musy; Aurélien W. Saïdi
    Keywords: Leader’s markup discount factor, linear economy, follower’s output discount factor, myopic behavior
    JEL: L13 L20
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:drm:wpaper:2011-10&r=ind
  2. By: Ibrahim Abada; Vincent Briat; Steve A. Gabriel; Olivier Massol
    Abstract: This article presents a dynamic Generalized Nash-Cournot model to describe the evolution of the natural gas markets. The aim of this work is to provide a theoretical framework that would allow us to analyze future infrastructure and policy developments, while trying to answer some of the main criticisms addressed to Cournot-based models of natural gas markets. The major gas chain players are depicted including: producers, consumers, storage and pipeline operators, as well as intermediate local traders. Our economic structure description takes into account market power and the demand representation tries to capture the possible fuel substitution that can be made between the consumption of oil, coal and natural gas in the overall fossil energy consumption. We also take into account the long-term aspects inherent to some markets, in an endogenous way. This particularity of our description makes the model a Generalized Nash Equilibrium problem that needs to be solved using specialized mathematical techniques. Our model has been applied to represent the European natural gas market and forecast, until 2030, after a calibration process, consumption, prices, production and natural gas dependence. A comparison between our model, a more standard one that does not take into account energy substitution, and the European Commission natural gas forecasts is carried out to analyze our results. Finally, in order to illustrate the possible use of fuel substitution, we studied the evolution of the natural gas price as compared to the coal and oil prices. This paper mostly focuses on the model description.
    Keywords: Energy markets modeling, Game theory, Generalized Nash-Cournot equilibria, Quasi-Variational Inequality
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:drm:wpaper:2011-8&r=ind
  3. By: Peter Katuscak
    Abstract: Economic theory presumes that individuals respond to true marginal prices when de- ciding on the amount of goods and services they buy and many other economic decisions. However, learning about these marginal prices is often costly in terms of search time, cog- nitive effort or monetary outlays. This is likely to be true of price changes in subscription plans. Consumers may therefore opt to be satisfied with only an approximate knowledge of the relevant marginal prices. This paper presents an experiment that studies repeated consumer purchase and price information updating and acquisition decisions when param- eters of the price schedule are serially correlated but unknown. Subjects have an option to acquire the pricing information at a cost, or otherwise just update their beliefs based on the observation of the total cost of purchase. We find the following: (1) conditional on information acquisition decisions, the model of Bayesian updating provides a good approx- imation for revealed mean beliefs about the per-unit price held by subjects who appear to understand the experiment and/or report their expected cost of purchase accurately; it is not a good approximation for other subjects; (2) the demand for information decreases with the cost of information, as expected; (3) controlling for Bayesian beliefs and cost of information, the demand for information does not vary with the length of the remaining time horizon in which the information can be used, contrary to the theoretical prediction; (4) large positive surprises in the cost of purchase in the most recent period increase infor- mation demand, whereas negative surprises decrease it, relative to the no-surprise baseline, which is contrary to the theoretical prediction.
    Keywords: price scheme; complexity; consumer decisions
    JEL: D12 D83
    Date: 2011–02
    URL: http://d.repec.org/n?u=RePEc:cer:papers:wp433&r=ind
  4. By: Jiri Strelicky; Kresimir Zigic
    Abstract: We study the economic impacts of the interaction between a regulator's Intellectual Property Rights (IPR) protection policy against software piracy on the one side and the forms of IPR protection that software producers may themselves undertake to protect their intellectual property on the other side. Two developers, each offering a variety of different quality, compete for heterogeneous users who choose among purchasing a legal version, using an illegal copy, and not using a product at all. Using an illegal version violates IPR and is thus punishable when disclosed. If a developer considers the level of piracy as high, he can either introduce a form of physical protection for his product or introduce a protection in the form of restricting support and other services to illegal users. The quality of each developer's product is exogenously given, and the developers compete in prices. We examine the above issues within the framework of Bertrand and Stackelberg competition while the monopoly set-up serves as a point of reference.
    Keywords: vertically differentiated duopoly, software piracy, Bertrand competition, private and public intellectual property rights protection
    JEL: D43 L11 L21 O25 O34
    Date: 2011–03
    URL: http://d.repec.org/n?u=RePEc:cer:papers:wp435&r=ind
  5. By: Vahagn Jerbashian
    Abstract: This paper presents an endogenous growth model where, in line with the recent em- pirical evidence, the telecommunications industry (telecom) is an engine of growth. In such a framework, this paper analyzes the channels through which telecom con- tributes to economic growth and focuses on market structure analysis for telecom, in the light of the recent changes in it. This paper suggests how the market struc- ture of telecom and the competition type in the telecom market can matter for its contribution to economic growth. It also proposes the optimal market structure for telecom from the social welfare perspective. In addition, it suggests the direction of telecom policies which can improve social welfare, and uses its theoretical results for qualitative evaluation of the Telecommunications Act of 1996 and similar policies.
    Keywords: telecommunication industry; market structure; economic growth; policy evaluation
    JEL: O41 O25 O38 L10
    Date: 2011–01
    URL: http://d.repec.org/n?u=RePEc:cer:papers:wp431&r=ind
  6. By: Czarnitzki, Dirk; Hussinger, Katrin; Schneider, Cédric
    Abstract: Patent pendencies create uncertainty in research and development (R&D) collaboration agreements, resulting in a threat of expropriation of unprotected knowledge by potential partners, reduced bargaining power and enhanced search costs. In this paper, we show that - depending of the type of partner - uncertain intellectual property rights (IPR) lead to reduced collaboration between firms and may hinder the production of knowledge. This has implications for technology policy as R&D collaborations are exempt from anti-trust legislation in order to increase R&D in the economy. We argue that a functional IPR system is needed for successful utilization of this policy. --
    Keywords: R&D collaboration,intellectual property,uncertainty,patents
    JEL: O31 O38
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:zbw:zewdip:11010&r=ind
  7. By: Ãlvaro Escribano; Marco S. Giarratana
    Abstract: This paper introduce a list of desirable efficiency properties that any a patent system should have in order to enhance innovation, trade competitiveness, employment mobility and economic growth. We briefly overview the literature on patents and discuss the advantages and disadvantages of the present and recent proposals for the future of the European Union Patents System. In particular, we discuss the costinefficiencies observed in the current design of the EU Patent System based in a double structure layer divided in a central European Patent Office (EPO) and several nationalbased patent offices. This paper analyzes the likely backlashes of creating a third layer for a subâ€sample of EU countries. The paper suggests an alternative more efficient Patent System together with some policy implications.
    Keywords: Innovation, Patents, Knowledge spillovers, Common European patent, Welfare losses, Patents’ languages, Cultural proximity, Competitive trade
    JEL: O31 O34 D02 F15 L24
    Date: 2011–02
    URL: http://d.repec.org/n?u=RePEc:cte:werepe:we1101&r=ind

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