nep-ind New Economics Papers
on Industrial Organization
Issue of 2014‒08‒09
six papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. The Kreps-Scheinkman game in mixed duopolies By Bakó, Barna; Tasnádi, Attila
  2. On patent strength, litigation costs, and patent disputes under alternative damage rules By Bertrand Chopard; Thomas Cortade; Eric Langlais
  3. Nothing so certain as your anchors? A consumer bias that might lower prices By Bakó, Barna; Kálecz-Simon, András
  4. Exit from Exporting: Does Engagement in Transnational Networks Matter? By Díaz-Mora, Carmen; Córcoles, David; Gandoy, Rosario
  5. Cournot Competition and Reduction of Corruption to Prevent Garment Factory Fires in Bangladesh By Sato, Hideki
  6. ICT and R&D as inputs or efficiency determinants? Analysing the manufacturing Italian firms over the 2007-2009 By Bonanno, Graziella

  1. By: Bakó, Barna; Tasnádi, Attila
    Abstract: In this paper we extend the results of Kreps and Scheinkman (1983) to mixedduopolies. We show that quantity precommitment and Bertrand competition yield Cournot outcomes not only in the case of private firms but also when a public firm is involved.
    Keywords: Mixed duopoly, Cournot, Bertrand-Edgeworth
    JEL: D43 H44 L13 L32
    Date: 2014–07–15
  2. By: Bertrand Chopard; Thomas Cortade; Eric Langlais
    Abstract: This paper analyzes the effects of two damage rules (Lost Profi…t vs Unjust Enrichment) mainly used by Courts in patent litigations. In our model, the Infringer either is a mere imitator of the Patentee or introduces incremental innovations, and litigation costs are private information such that a pretrial settlement may be better for both litigants. We show that the Unjust Enrichment rule yields less trials than the Lost Pro…fit one. But regarding three main objectives, Patentee's protection, incentives to invest in R&D, and social welfare maximization,we …find that no rule is better than the other generally speaking. Our model also allows to emphasize how the combination between the size of litigation costs, the negotiation gains and the IPR strength, shapes the incentives to enforce as well infringe a IPR, although in a way specifi…c to each rule.
    Keywords: intellectual property, probabilistic patents, patent litigations, incremental innovations, pretrial negotiations, legal costs, imperfect competition.
    JEL: L1 L4 D8 K2 K4
    Date: 2014
  3. By: Bakó, Barna; Kálecz-Simon, András
    Abstract: Anchoring is a well-known decision-making bias: original guesses for a certain question could act as anchors and could influence our final answers. Reference prices - in a similar fashion - can lead to a bias in consumer valuations, and thus consumer demand will be coherent but not one derived from a utility framework. In our paper we investigate the effect of the existence of anchoring on how oligopolistic firms might change their pricing strategy. More specifically, we analyze the effect of anchoring on pricing when differentiated firms compete in Bertrand fashion. We show that if the anchoring effect is smaller than a threshold the average price is lower compared to the no-anchoring case.
    Keywords: anchoring, consumer bias, Bertrand competition
    JEL: C72 D11 D43
    Date: 2014–06–29
  4. By: Díaz-Mora, Carmen; Córcoles, David; Gandoy, Rosario
    Abstract: The aim of this paper is to investigate whether the probability of ceasing exports is lower for firms that are integrated in transnational production chains, once other firm characteristics are controlled for. On the basis of the estimation of a random-effects probit model with panel data, we find that the superior characteristics of firms involved in global networks (in terms of productivity, foreign ownership and skilled labor) explain their greater resistance to losing their status as exporters. However, for small firms, even when these distinctive features are controlled for, integration in international networks plays an important role in continuing to export. Thus, it seems that small firms which participate in networks have an added advantage which enables them to confront the uncertainty of foreign markets in better conditions and translates to a lower likelihood that they will stop exporting.
    Keywords: Probability of ceasing to export, firms' characteristics, integration in global value networks.
    JEL: F14 L14
    Date: 2014–07
  5. By: Sato, Hideki
    Abstract: The number of member factories in the Bangladesh Garment Manufacturers and Exporters Association has grown more than 6.8 fold during the past 20 years to reach 5,700.This has been overshadowed by repeated deadly garment factory fires that have resulted in at least 267 workers losing their lives in Dhaka and the surrounding regions during the past 20 years. With a focus on work-related injury and death caused by major indifference to the small changes, this paper indicates that such work-related injury and death can be prevented through Cournot competition if factory owners employ managers, to whom they give two missions: maximize sales and ensure worker safety.
    Keywords: Corruption, Bangladesh, Readymade Garment Industry, Factory Fires, Cournot Competition
    JEL: D4 L1
    Date: 2014–05–14
  6. By: Bonanno, Graziella
    Abstract: Are Information and Communication Technology (ICT) and Research & Development (R&D) inputs or efficiency determinants? This is the topic of the paper which is developed by analysing a sample of 2691 Italian manufacturing firms over the period 2007-2009. The empirical setting is based on a production function estimated through the Stochastic Frontier (SF) approach. ICT and R&D are used once as inputs, once as efficiency determinants (Coelli et al., 1999). Results show that the rates of return of ICT and R&D investments are high (0.08 for ICT and 0.04 for R&D) when they enter into the model only as inputs. We also documented that ICT and R&D contribute positively to explain the efficiency scores.
    Keywords: ICT, R&D, Stochastic Frontier Approach, efficiency
    JEL: D22 D24 L69 O39
    Date: 2014–07–29

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