Product Differentiation And Entry Timing In A Continuous Time Spatial Competition Model With Vertical Relations
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| Author | : Takeshi Ebina |
| Publisher | : |
| Total Pages | : 39 |
| Release | : 2017 |
| Genre | : |
| ISBN | : |
We study the entry timing and location decisions of two exclusive buyer-supplier relationships in a continuous-time spatial competition model. In each relationship, the firms determine their entry timing and location, and negotiate a wholesale price through Nash bargaining. Then, the downstream firm immediately determines its retail price. Our findings are as follows. Ordinarily, if the supplier of the first entrant (called the leader pair) has strong bargaining power, the equilibrium location of the leader will be closer to the center, inducing a delay in entry by the second entrant (called the follower pair). This delay implies the stronger bargaining power of the supplier in the leader pair can also benefit the buyer of the pair. The location of the leader pair can change non-monotonically with an increase in the supplier's bargaining power, which has a substantial impact on the entry timing of the follower pair. However, the greater the bargaining power of the supplier in the follower pair, the closer the leader pair will be to the edge. This implies that having greater bargaining power will enhance the profitability of the supplier in the follower pair.
| Author | : Takeshi Ebina |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
We extend the well-known spatial competition model (d'Aspremont et al., 1979) to a continuous time model in which two firms compete in each instance. Our focus is on the entry timing decisions of firms and their optimal locations. We demonstrate that the leader has an incentive to locate closer to the centre to delay the follower's entry, leading to a non-maximum differentiation outcome. We also investigate how exogenous parameters affect the leader's location and firms' values and, in particular, numerically show that the profit of the leader changes non-monotonically with an increase in the transport cost parameter.
| Author | : John Beath |
| Publisher | : Cambridge University Press |
| Total Pages | : 220 |
| Release | : 1991-02-22 |
| Genre | : Business & Economics |
| ISBN | : 9780521335522 |
There are few industries in modern market economies that do not manufacture differentiated products. This book provides a systematic explanation and analysis of the widespread prevalence of this important category of products. The authors concentrate on models in which product selection is endogenous. In the first four chapters they consider models that try to predict the level of product differentiation that would emerge in situations of market equilibrium. These market equilibria with differentiated products are characterised and then compared with social welfare optima. Particular attention is paid to the distinction between horizontal and vertical differentiation as well as to the related issues of product quality and durability. This book brings together the most important theoretical contributions to these topics in a succinct and coherent manner. One of its major strengths is the way in which it carefully sets out the basic intuition behind the formal results. It will be useful to advanced undergraduate and graduate students taking courses in industrial economics and microeconomic theory.
| Author | : |
| Publisher | : |
| Total Pages | : 478 |
| Release | : 1984 |
| Genre | : Dissertations, Academic |
| ISBN | : |
| Author | : Sónia Félix |
| Publisher | : International Monetary Fund |
| Total Pages | : 57 |
| Release | : 2019-12-13 |
| Genre | : Business & Economics |
| ISBN | : 1513521519 |
This paper studies the macroeconomic effect and underlying firm-level transmission channels of a reduction in business entry costs. We provide novel evidence on the response of firms' entry, exit, and employment decisions. To do so, we use as a natural experiment a reform in Portugal that reduced entry time and costs. Using the staggered implementation of the policy across the Portuguese municipalities, we find that the reform increased local entry and employment by, respectively, 25% and 4.8% per year in its first four years of implementation. Moreover, around 60% of the increase in employment came from incumbent firms expanding their size, with most of the rise occurring among the most productive firms. Standard models of firm dynamics, which assume a constant elasticity of substitution, are inconsistent with the expansionary and heterogeneous response across incumbent firms. We show that in a model with heterogeneous firms and variable markups the most productive firms face a lower demand elasticity and expand their employment in response to increased entry.
| Author | : V. Henderson |
| Publisher | : Elsevier |
| Total Pages | : 1081 |
| Release | : 2004-07-21 |
| Genre | : Business & Economics |
| ISBN | : 0080495125 |
The new Handbook of Regional and Urban Economics: Cities and Geography reviews, synthesizes and extends the key developments in urban and regional economics and their strong connection to other recent developments in modern economics. Of particular interest is the development of the new economic geography and its incorporation along with innovations in industrial organization, endogenous growth, network theory and applied econometrics into urban and regional economics. The chapters cover theoretical developments concerning the forces of agglomeration, the nature of neighborhoods and human capital externalities, the foundations of systems of cities, the development of local political institutions, regional agglomerations and regional growth. Such massive progress in understanding the theory behind urban and regional phenomenon is consistent with on-going progress in the field since the late 1960’s. What is unprecedented are the developments on the empirical side: the development of a wide body of knowledge concerning the nature of urban externalities, city size distributions, urban sprawl, urban and regional trade, and regional convergence, as well as a body of knowledge on specific regions of the world—Europe, Asia and North America, both current and historical. The Handbook is a key reference piece for anyone wishing to understand the developments in the field.
| Author | : Benoit Chevalier-Roignant |
| Publisher | : MIT Press |
| Total Pages | : 517 |
| Release | : 2011-12-22 |
| Genre | : Business & Economics |
| ISBN | : 0262297833 |
A new paradigm for balancing flexibility and commitment in management strategy through the amalgamation of real options and game theory. Corporate managers who face both strategic uncertainty and market uncertainty confront a classic trade-off between commitment and flexibility. They can stake a claim by making a large capital investment today, influencing their rivals' behavior, or they can take a “wait and see” approach to avoid adverse market consequences tomorrow. In Competitive Strategy, Benoît Chevalier-Roignant and Lenos Trigeorgis describe an emerging paradigm that can quantify and balance commitment and flexibility, “option games,” by which the decision-making approaches of real options and game theory can be combined. The authors first discuss prerequisite concepts and tools from basic game theory, industrial organization, and real options analysis, and then present the new approach in discrete time and later in continuous time. Their presentation of continuous-time option games is the first systematic coverage of the topic and fills a significant gap in the existing literature. Competitive Strategy provides a rigorous yet pragmatic and intuitive approach to strategy formulation. It synthesizes research in the areas of strategy, economics, and finance in a way that is accessible to readers not necessarily expert in the various fields involved.
| Author | : Jeffrey J. Reuer |
| Publisher | : Emerald Group Publishing |
| Total Pages | : 520 |
| Release | : 2007-07-05 |
| Genre | : Business & Economics |
| ISBN | : 1849504946 |
Examines the ways in which real options theory can contribute to strategic management. This volume offers conceptual pieces that trace out pathways for the theory to move forward and presents research on the implications of real options for strategic investment, organization, and firm performance.
| Author | : Matthew Shum |
| Publisher | : World Scientific |
| Total Pages | : 154 |
| Release | : 2016-12-14 |
| Genre | : Business & Economics |
| ISBN | : 981310967X |
Economic Models for Industrial Organization focuses on the specification and estimation of econometric models for research in industrial organization. In recent decades, empirical work in industrial organization has moved towards dynamic and equilibrium models, involving econometric methods which have features distinct from those used in other areas of applied economics. These lecture notes, aimed for a first or second-year PhD course, motivate and explain these econometric methods, starting from simple models and building to models with the complexity observed in typical research papers. The covered topics include discrete-choice demand analysis, models of dynamic behavior and dynamic games, multiple equilibria in entry games and partial identification, and auction models.
| Author | : Richard Schmalensee |
| Publisher | : North Holland |
| Total Pages | : 640 |
| Release | : 1989-09-11 |
| Genre | : Business & Economics |
| ISBN | : |
Handbook of industrial organization/Schmalensee.-V.2.
