nep-ind New Economics Papers
on Industrial Organization
Issue of 2018‒07‒23
five papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Social responsibility in a bilateral monopoly with R&D By Garcia, Arturo; Leal, Mariel; Lee, Sang-Ho
  2. Endogenous Timing in a Price-Setting Mixed Oligopoly By Haraguchi, Junichi; Hirose, Kosuke
  3. Product innovation by supplying in domestic and foreign markets By Bratti, Massimiliano; Felice, Giulia
  4. State-Owned Enterprises: Rationales for Mergers and Acquisitions By Massimo FLORIO; Matteo FERRARIS; Daniela VANDONE
  5. Collective Entry Deterrence and Free Riding: Airbus and Boeing in China By Patrice CASSAGNARD; Pierre REGIBEAU

  1. By: Garcia, Arturo; Leal, Mariel; Lee, Sang-Ho
    Abstract: This note examines social responsibility in a linear bilateral monopoly by incorporating a cost-reducing R&D investment and investigates an endogenous timing game. We find that in the presence of R&D, the retailer always adopts social responsibility irrespective of the timing of the game, but the manufacturer adopts only with its leadership in a sequential game where it can take the first-mover advantage. We also show that two sequential choices will be subgame perfect equilibria, but the commitment to the social responsibility by manufacturer is a payoff dominance outcome.
    Keywords: social responsibility; R&D investment; fixed-timing game; endogenous-timing game
    JEL: D21 L13 L22 M14
    Date: 2018–05
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:87200&r=ind
  2. By: Haraguchi, Junichi; Hirose, Kosuke
    Abstract: We investigate the endogenous order of moves in a price-setting mixed oligopoly model, comprising two private firms and a public firm. We show that sequential moves emerge as the equilibrium in the observable delay game. Specifically, one of the private firms and the public firm set their prices in period 1, and the other private firm does so in period 2, in equilibrium, if their goods are not significantly differentiated. This is a clear contrast to a mixed duopoly where a simultaneous move game is a unique equilibrium. We also discuss a number of extensions and the robustness of our result.
    Keywords: Mixed Markets; Endogenous Timing; Stackelberg
    JEL: H44 L13
    Date: 2018–06–12
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:87285&r=ind
  3. By: Bratti, Massimiliano (European Commission – JRC); Felice, Giulia (Politecnico di Milano)
    Abstract: This paper uses European firm-level survey data to provide some robust empirical evidence that suppliers engaged in production to order (PTO) for foreign firms are more likely to introduce product innovations than those engaged in PTO for domestic firms, even when differences in size, R&D and productivity are controlled for. We propose a demand-driven theoretical explanation based on the interactions between an upstream producer of a specialized input and a downstream producer in a framework of incomplete contracts, agency frictions, and imperfect information.
    Keywords: buyer, supplier, product innovation, production to order, foreign market
    JEL: D21 D22 F21 L23 O31
    Date: 2018–06
    URL: http://d.repec.org/n?u=RePEc:jrs:wpaper:201803&r=ind
  4. By: Massimo FLORIO (Department of Economics, Management and Quantitative methods, Università degli Studi di Milano, Italy); Matteo FERRARIS (Istituto Superiore Mario Boella, Turin, Italy); Daniela VANDONE (Department of Economics, Management and Quantitative methods, Università degli Studi di Milano, Italy)
    Abstract: The paper contributes to the empirical literature on M&A deals performed by SOEs with a detailed analysis of the reported rationales from a sample of SOE-led acquisitions over the last decade. The sample includes 355 worldwide M&A deals performed by SOEs as acquirers over the period 2002-2012. The data set was obtained by combining firm-level information from two sources, Zephyr and Orbis (Bureau Van Dijk). The analysis is on a case-by-case basis for the rationales of the sample. Overall, the most important message arising from our analysis is that rescue of firms in financial distress is a relatively minor one role played by contemporary SOEs in spite of the Great Recession, while shareholder value maximization and long term strategic goals are more frequently the objective of the observed deals.
    Keywords: State-owned enterprises, M&As, nationalization, privatization
    JEL: L32 L33 G34
    Date: 2018–01
    URL: http://d.repec.org/n?u=RePEc:crc:wpaper:1801&r=ind
  5. By: Patrice CASSAGNARD; Pierre REGIBEAU
    Abstract: We propose a simple two-stages duopoly game where two firms produce an homogeneous good to satisfy the demand in a foreign market. First they decide whether to serve this market with exports or with foreign direct investments and then they play a one-shot Cournot-Nash game. This game has been made even more complex by the fact that foreign direct investments induce technological spillovers which imply the possible entry of a third firm. From the complete characterization of the equilibria we show that a small disadvantage of one of the both firms can conduce this firm to invest alone in the foreign country rather than export. In this case, the investment is motivated by the fact that the dissipation risk of both firm-specific assets to a local potential entrant -triopoly payoffs- is beared by the two firms whereas the gain -increased market share in duopoly- is captured by the firm which chooses to invest abroad. We have in mind the competition between Airbus and Boeing in China.
    Keywords: Entry Deterrence ; FDI ; Export ; Cournot duopoly ; Spillovers ; Airbus and Boeing
    Date: 2018–07
    URL: http://d.repec.org/n?u=RePEc:tac:wpaper:2017-2018_11&r=ind

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