Three Essays On Oligopolistic Competition In An Open Economy
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Three Essays in Industrial Economics and Public Policy
Author | : Cheawanet Bunchai |
Publisher | : |
Total Pages | : |
Release | : 2015 |
Genre | : |
ISBN | : |
This dissertation comprises of three essays in industrial economics. My first essay analyzes social efficiency of entry into a downstream oligopoly of a vertical market structure, where an upstream supplier sells an essential input to all firms producing downstream. In the downstream markets, a multiproduct firm is both a monopoly in its own product and a leader in a different product market with free entry of followers. We show that in the presence of scale economies, entry is socially insufficient. The insufficiency of entry is due to the fact that entry generates a business-creating effect significantly large enough to dominate a business-stealing effect, regardless of whether the upstream supplier's input pricing strategy is discriminatory or uniform. This suggests that entry regulation as a public policy is socially undesirable in the downstream oligopoly of a vertical market structure. My second essay examines differences in welfare implications between discriminatory and uniform input price regimes in vertically related markets where a multiproduct firm operates downstream in two separate markets: one is a monopoly and the other is an oligopoly with entry of new firms. In the analysis, we analyze how the downstream entry into the oligopolistic market affects social efficiency. In an open economy, whether the input price regime is discriminatory or uniform, entry is always socially excessive in the presence of scale economies. This contrasts with the existing studies in the literature that entry is always socially insufficient in an open economy with the presence of scale economies. Focusing on the scenario where vertically integrated producer (VIP) adopts a non-foreclosure strategy, my third essay shows that downstream entry is socially insufficient despite scale economies and the marginal cost difference between the VIP and its retail competitors. The non-foreclosure equilibrium arises when the VIP's wholesale profit from the sales of an essential input is sufficiently large and the VIP shares the profit with its downstream competitors. For the case of an open economy where the VIP is a foreign firm, downstream entry continues to be socially insufficient. Entry regulation is therefore socially undesirable, but a production subsidy encouraging downstream entry is shown to be a welfare-improving policy.
Three Essays on the Open Economy
Author | : David Yaukar Wong |
Publisher | : |
Total Pages | : 266 |
Release | : 1987 |
Genre | : Capital movements |
ISBN | : |
Three Essays on Firm Strategy and Public Policy
Author | : Byung-Cheol Kim |
Publisher | : |
Total Pages | : 250 |
Release | : 2007 |
Genre | : Consumer protection |
ISBN | : |
Three Essays on Oligopoly and Financial Structure
Author | : Hyun Jong Kim |
Publisher | : |
Total Pages | : |
Release | : 2002 |
Genre | : Equilibrium (Economics) |
ISBN | : |
The Theory of Money and Financial Institutions
Author | : Martin Shubik |
Publisher | : MIT Press |
Total Pages | : 472 |
Release | : 1999 |
Genre | : Business & Economics |
ISBN | : 9780262693110 |
This first volume in a three-volume exposition of Shubik's vision of "mathematical institutional economics" explores a one-period approach to economic exchange with money, debt, and bankruptcy. This is the first volume in a three-volume exposition of Martin Shubik's vision of "mathematical institutional economics"--a term he coined in 1959 to describe the theoretical underpinnings needed for the construction of an economic dynamics. The goal is to develop a process-oriented theory of money and financial institutions that reconciles micro- and macroeconomics, using as a prime tool the theory of games in strategic and extensive form. The approach involves a search for minimal financial institutions that appear as a logical, technological, and institutional necessity, as part of the "rules of the game." Money and financial institutions are assumed to be the basic elements of the network that transmits the sociopolitical imperatives to the economy. Volume 1 deals with a one-period approach to economic exchange with money, debt, and bankruptcy. Volume 2 explores the new economic features that arise when we consider multi-period finite and infinite horizon economies. Volume 3 will consider the specific role of financial institutions and government, and formulate the economic financial control problem linking micro- and macroeconomics.