nep-mic New Economics Papers
on Microeconomics
Issue of 2006‒06‒24
twelve papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Optimal Incentives under Moral Hazard and Heterogeneous Agents: Evidence from Production Contracts Data By DUBOIS, Pierre; VUKINA, Tomislav
  2. Dynamic Regulation of Public Good Quality By AURAY, Stéphane; MARIOTTI, Thomas; MOIZEAU, Fabien
  3. Government Outsourcing: Public Contracting with Private Monopoly By AURIOL, Emmanuelle; PICARD, Pierre
  4. First-Price Auction Symmetric Equilibria with a General Distribution By Paulo Klinger Monteiro
  5. Incentives and Prosocial Behavior By BENABOU, Roland; TIROLE, Jean
  6. What Do We Know About Competition and Quality in Health Care Markets? By Martin Gaynor
  7. Economic Surplus and Derived Demand By Ekkehart Schlicht
  8. The Response of Prices, Sales, and Output to Temporary Changes in Demand By Adam Copeland; George Hall
  9. Prudent Expectations Equilibrium in Economies with Uncertain Delivery By Joao Correia-da-Silva; Carlos Hervés-Beloso
  10. Foreign Direct Investment and R&D offshoring By Hans Gersbach; Armin Schmutzler
  11. E-Commerce, Two-Sided Markets and Info-Mediation By GAUDEUL, Alexandre; JULLIEN, Bruno
  12. Pricing and Other Business Strategies for e-Procurements Platforms By JULLIEN, Bruno

  1. By: DUBOIS, Pierre; VUKINA, Tomislav
    JEL: D82 L24 Q12 K32 L51
    Date: 2005–12
  2. By: AURAY, Stéphane; MARIOTTI, Thomas; MOIZEAU, Fabien
    JEL: D82 L15 L51
    Date: 2006–03
  3. By: AURIOL, Emmanuelle; PICARD, Pierre
    JEL: L43 L51 D82 L33
    Date: 2006–01
  4. By: Paulo Klinger Monteiro (EPGE/FGV)
    Date: 2006–05
  5. By: BENABOU, Roland; TIROLE, Jean
    JEL: D64 D82 H41 Z13
    Date: 2003–05
  6. By: Martin Gaynor
    Abstract: The goal of this paper is to identify key issues concerning the nature of competition in health care markets and its impacts on quality and social welfare and to identify pertinent findings from the theoretical and empirical literature on this topic. The theoretical literature in economics on competition and quality, the theoretical literature in health economics on this topic, and the empirical findings on competition and quality in health care markets are surveyed and their findings assessed. Theory is clear that competition increases quality and improves consumer welfare when prices are regulated (for prices above marginal cost), although the impacts on social welfare are ambiguous. When firms set both price and quality, both the positive and normative impacts of competition are ambiguous. The body of empirical work in this area is growing rapidly. At present it consists entirely of work on hospital markets. The bulk of the empirical evidence for Medicare patients shows that quality is higher in more competitive markets. The empirical results for privately insured patients are mixed across studies.
    JEL: I1 L1 L3
    Date: 2006–06
  7. By: Ekkehart Schlicht (University of Munich and IZA Bonn)
    Abstract: Most demand - especially labor demand - is derived from the demand for some other product. This note demonstrates that the usual analysis of economic rent, as typically explained for the case of consumers' surplus, carries over to the case of derived demand.
    Keywords: derived demand, indirect demand, consumers' surplus, economic rent
    JEL: D00 D61
    Date: 2006–06
  8. By: Adam Copeland; George Hall (Bureau of Economic Analysis)
    Abstract: We determine empirically how the Big Three automakers accommodate shocks to demand. They have the capability to change prices, alter labor inputs through temporary layoffs and overtime, or adjust inventories. These adjustments are interrelated, non-convex, and dynamic in nature. Combining weekly plant-level data on production schedules and output with monthly data on sales and transaction prices, we estimate a dynamic profit-maximization model of the firm. Using impulse response functions, we demonstrate that when an automaker is hit with a demand shock, sales respond immediately, prices respond gradually, and production responds only after a delay. The size of the immediate sales response is linear in the size of the shock, but the delayed production response is non-convex in the size of the shock. For sufficiently large shocks the cumulative production response over the product cycle is an order of magnitude larger than the cumulative price response. These results stand in contrast to most formal analysis of the automobile industry, which has focused on production or price adjustment and assumed the other variable was fixed. We examine two recent demand shocks: the Ford Explorer/Firestone tire recall of 2000, and the September 11, 2001 terrorist attacks.
    Date: 2006
  9. By: Joao Correia-da-Silva (CEMPRE, Faculdade de Economia, Universidade do Porto); Carlos Hervés-Beloso (RGEA. Facultad de Económicas. Universidade de Vigo.)
    Abstract: In an economy with private information, we introduce the notion of objects of choice as lists of bundles out of which the market selects one for delivery. This leads to an extension of the model of Arrow-Debreu that is used to study ex-ante trade with private state verification. The model does not require agents to have complete information about the space of states, being suited to a context of Knightian uncertainty. Under the assumption that agents are prudent, equilibrium is characterized by the fact that agents consume bundles with the same utility in states that they do not distinguish.
    Keywords: General equilibrium, Private information, Incomplete information, Knightian uncertainty, Ambiguity, Uncertain delivery, Lists of bundles.
    JEL: C62 D51 D82
    Date: 2006–06
  10. By: Hans Gersbach (Alfred-Weber-Institut, Department of Economics, University of Heidelberg); Armin Schmutzler (Socioeconomic Institute, University of Zurich)
    Abstract: We analyze a two-country model of Foreign Direct Investment (FDI). Two firms, each of which is originally situated in only one of the two countries, first decide whether to build a plant in the foreign country. Then, they decide whether to relocate R&D activities. Finally, they engage in product-market competition. Our main points are: first, FDI liberalization causes a relocation of R&D activities if intrafirm communication is sufficiently well developed, external spillovers are substantial, competition is not too strong and foreign markets are not too small. Second, such a relocation of R&D activities will usually nevertheless increase domestic welfare since it only occurs if intrafirm communication is well developed and therefore knowledge generated and obtained abroad flows back to the domestic country. Third, the potential of R&D offshoring makes FDI itself more likely. Fourth, when countries are asymmetric, the small-country firm is more likely to offshore its R&D activities into the large country than conversely.
    Keywords: Foreign Direct Investment, R&D, Spillovers, Research Relocation
    JEL: F23 O30
    Date: 2006–06
  11. By: GAUDEUL, Alexandre; JULLIEN, Bruno
    Date: 2005–01
  12. By: JULLIEN, Bruno
    Date: 2005–12

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