nep-ind New Economics Papers
on Industrial Organization
Issue of 2011‒10‒22
six papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Cournot and Bertrand competition with asymmetric costs in a mixed duopoly By Kangsik, Choi
  2. Optimal Product Variety in a Hotelling Model By Kieron Meagher
  3. The Relationship between Trigger Price and Punishment Period in Green and Porter (1984) Game made Endogenous By António Brandão; Luís Guimarães; Carlos Seixas
  4. Copyright and market structure under vertical relations By Nakanishi, Yasuo
  5. Market Size and Vertical Structure in the Railway Industry By Noriaki Matsushima; Fumitoshi Mizutani
  6. Evolution of competition in Vietnam industries over the recent economic transition By Doan, Tinh

  1. By: Kangsik, Choi
    Abstract: We investigate a differentiated mixed duopoly in which private and public firms can choose to strategically set prices or quantities when the public firm is less efficient than the private firm. Thus, regardless of whether the goods are substitutes or complements, if the degree of public firm's inefficiency is sufficiently small, there exists a dominant strategy for both public and private firms that choose Bertrand competition, while there exists a dominant strategy only for the private firm that chooses Bertrand competition if the degree of inefficiency is sufficiently large. Consequently, we show that regardless of the nature of goods, (i) social welfare under Bertrand competition is determined in equilibrium, if the degree of public firm's inefficiency is sufficiently small; and (ii) if the degree of its inefficiency is sufficiently large, social welfare under which the private firm sets its price and the public firm sets its quantity is determined in equilibrium. Moreover, the ranking of a private firm's profit is not reversed.
    Keywords: Inefficiency; Cournot-Bertrand Competition; Mixed Duopoly
    JEL: L13 D43 H44
    Date: 2011–10–14
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:34100&r=ind
  2. By: Kieron Meagher
    Abstract: In Hotelling style duopoly location games the product variety (or firm locations) is typically not socially optimal. This occurs because the competitive outcome is driven by the density of consumers at the margin while the socially optimal outcome depends on the whole distribution of consumer locations/tastes. We consider a natural extension of the standard model in which firms are imperfectly informed about the distribution of consumers, in particular firms are uncertain about the consumer mean. In the uniform case, as the aggregate uncertainty about the mean becomes large relative to the dispersion of consumers about the mean, competitive locations become socially optimal. A limit result on prices for discontinuous, log-concave densities shows the result will hold in a range of cases.
    JEL: C72 D43 D81 L10 L13 R30 R39
    Date: 2011–10
    URL: http://d.repec.org/n?u=RePEc:acb:cbeeco:2011-555&r=ind
  3. By: António Brandão (CEF.UP, Faculdade de Economia, Universidade do Porto); Luís Guimarães (Faculdade de Economia, Universidade do Porto); Carlos Seixas (Faculdade de Economia, Universidade do Porto)
    Abstract: Green and Porter (1984) made a huge contribution to Industrial Organization Theory where a trigger price is defined by firms and whenever the price falls below this trigger price, the firms cease to produce at the monopoly level and enter into a punishment period. Our goal with this paper is to define, endogenously in the model, relationships between the trigger price and the punishment period, which were set exogenously in the original paper.
    Keywords: Green and Porter (1984); trigger price; punishment period
    JEL: L13 L20
    Date: 2011–10
    URL: http://d.repec.org/n?u=RePEc:por:fepwps:432&r=ind
  4. By: Nakanishi, Yasuo
    Abstract: The purpose of this study is to investigate the copyright protection of intellectual property under vertical relations. Vertical relations among author, manufacturer and retailer are considered. We develop several models, each with a different structure of vertical integration. R&D levels, total quantities, profits and social welfare levels are compared. We also investigate the effect of copyright protection by modeling the cases of perfect protection, partial protection and no protection. We analyze whether copyright benefits social welfare. We explain the policy implications of our results for the protection of copyright.
    Keywords: R&D; Patent; Copyright; Vertical Relations; Market Structure
    JEL: O34 O33 O32 O31
    Date: 2011–10–18
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:34206&r=ind
  5. By: Noriaki Matsushima; Fumitoshi Mizutani
    Abstract: We provide a theoretical framework to discuss the relation between market size and vertical structure in the railway industry. The framework is based on a simple downstream monopoly model with two input suppliers, labor forces and the rail infrastructure firm. The operation of the downstream firm (i.e., the train operating firm) generates costs on the rail infrastructure firm. We show that the downstream firm with a larger market size is more likely to integrate with the rail infrastructure firm. This is consistent with the phenomenon in the railway industry.
    Date: 2011–10
    URL: http://d.repec.org/n?u=RePEc:dpr:wpaper:0820&r=ind
  6. By: Doan, Tinh
    Abstract: Understanding the degree and evolution of competition across industries is an important step towards understanding the impact of economic reform and competition on economic growth in Vietnam during the economic transition. In this paper, we investigate evolution of competition in Vietnam during the economic transition using the Price-Cost Margin (PCM) or Mark-up that has been widely applied in the economic literature and the Profit Elasticity (PE) recently developed by Boone (2000). This paper provides the first empirical study of intensity and evolution of competition across selected industries in Vietnam in the last decade using firm-level data from the Vietnam Enterprise Census (VEC) conducted annually since 2000 by the Vietnam General Statistical Office (GSO).
    Keywords: Competition; industry; economic transition; Vietnam
    JEL: L5 P30 L11 P20 D40
    Date: 2011–10–10
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:34254&r=ind

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