Search results for "microeconomics"

Asymmetric Demand Information and Foreign Direct Investment

2007

We examine the FDI versus exports decision of firms competing in an oligopolistic (quantitysetting) market under demand uncertainty and asymmetric information. Compared to a firm that chooses to export, a firm that chooses to set up a plant in the host market has superior information about local market demand. In addition to the well-known tension between the fixed set-up costs of investment, the additional variable costs of exports and oligopoly sizes, the incentive to invest abroad is explained by the strategic learning effect. FDI may be observed even if trade costs are zero. The analysis is robust to price competition and to the possibility that a foreign firm can engage in both FDI and…

A Model of Multiproduct Price Competition

1997

Abstract We provide a simple model of price competition in a multiproduct oligopoly market. The products are of general nature. We find that a pure strategy equilibrium exists and every equilibrium consumption maximizes the total social surplus. Consumers are characterized by a set function which determines their willingness to pay for every subset of products. If this function is convex, the set of equilibrium prices coincides with the core of a cooperative game generated by this set function and the firms extract total industry surplus. If it is concave, the only equilibrium price of a product is its marginal contribution to the consumer's total willingness to pay. Journal of Economic Lit…

Cost uncertainty and trade liberalization in international oligopoly

1998

Abstract Trade liberalization has been shown to be unfavourable for firms of at least one country for the homogeneous goods case in an environment of certainty. We show that, in the presence of private cost information and for ex ante identical firms, oligopolistic firms will prefer to operate under free trade rather than under autarky in homogeneous goods industries provided there exists a certain degree of firms' heterogeneity and a sufficiently large amount of uncertainty. For the particular case of symmetry both in demand and industry sizes, the firms of at least one country prefer to operate under autarky rather than under free trade.

MIXED OLIGOPOLY WITH HOMOGENEOUS GOODS

1993

R&D Networks Among Unionized Firms

2005

We develop a model of strategic networks in order to analyze how trade unions will affect the stability and efficiency of RD otherwise, the efficient network is the partially connected network. Thus, a conflict between stability and efficiency may occur: efficient networks are pairwise stable, but the reverse is not true. Strong stability even reinforces this conflict. However, once unions settle wages such conflict disappears: the complete network is the unique pairwise and strongly stable network and is the efficient network whatever the spillovers.

An Analytic Hierachy Process for Ranking Operating Costs of Low Cost and Full Service Airlines

2009

This paper develops an application of the analytic hierarchy process to rank the operating cost components of full service and low cost airlines. It takes into account the financial balance sheets and answers to a questionnaire submitted to the managers of selected airlines. The results suggest that the analytic hierarchy process can be appropriately used to obtain the ranking of the costs taking into account different views: financial, management and operative. Rental, office equipment and other supplies costs show the highest importance in the cost ranking, both for full services and low cost airlines. The robustness of the results is tested by Monte Carlo analysis.

A Fuzzy Chance-constraint Programming Model for a Home Health Care Routing Problem with Fuzzy Demand

2017

Bunching in Optimal Taxation

2010

Real-time pricing for aggregates energy resources in the Italian energy market

2015

Abstract Over the last decade, the architecture of the energy market has radically changed. In many countries end-users are now able to directly access the market, which has given rise to the question of how they can actively participate in that market. End-users can comprise a critical mass through aggregation that is carried out by a third party – to wit the “loads aggregator.” This paper proposes a new framework for generating feasible real-time price curves for those end-users in a demand-response management process. The underlying algorithm generates output curves as the solution to a constrained optimization problem whose objective function is the aggregator's economic benefit. A case…

Peer Discipline and Incentives Within Groups

2014

We investigate how a collusive group can sustain non-Nash actions by enforcing internal discipline through costly peer punishment. We give a simple and tractable characterization of schemes that minimize discipline costs while preserving incentive compatibility. We apply the model to a public goods contribution problem. We find that if the per-capita benefit from the public good is low, then regardless of whether peer discipline is feasible or not only small groups will contribute to the good. If the public good benefit is significant but peer discipline is infeasible it remains the case that only small groups contribute. On the other hand, if the public good benefit is significant but peer…