Abstract This study investigates the welfare consequences of common ownership in a successive vertical oligopoly, which upstream firms produce homogeneous input and compete quantities, while downstream differentiated final products either quantities or prices. Common both markets internalizes negative horizontal externality positive externality. The interaction between these externalities shapes market outcomes. Our main results are summarized as follows. If is monopolized, always improves...

This paper subjects to examine how technology spillover affects input competition and constraints impact firm innovation by a two-stage game model theoretic analysis. The results show that with low spillover, the high cost can capture more than through cost-reducing innovation. Adding increases firms’ innovation, but it cannot improve disadvantaged firm's state under constraint. Compared non-cooperative cooperative reduces difference size difference. research implications are disadvantage...

Abstract This paper studies the endogenous formation of free trade agreements. There are four countries belonging to two types according market demand and production technology. A unique strong Nash equilibrium exists for coalition game. In equilibrium, structures may emerge: global trade, wherein a single encompassing all is established, or polarization, characterized by symmetric agreements between same type countries. The specific structure that emerges in depends on both disparity gap unit cost

Advance selling occurs when consumers order a firm's product prior to the regular season. It reduces uncertainty for both firm and buyers enables better forecast its future demand. The distinctive feature of this paper is that there are experienced inexperienced consumers, with former knowing their valuations in advance. We show pre-orders from lead more precise demand by optimal pre-order price may be at discount or premium relative price. Copyright © 2016 John Wiley & Sons, Ltd.

We consider a duopoly market with heterogeneous consumers. The firms initially produce vertically differentiated standard products located at the end points of variety interval. Customization provides ideal varieties for consumers but has no effect on quality. first choose whether to customize their products, then engage in price competition. show that low‐quality firm never customizes alone; customization becomes more likely as difference between firms’ qualities increases; and less fixed...

Ad valorem royalty licensing is implemented when the licensor (i.e., patent‐holding firm) obtains ownership shares in licensee as payment once new technology transferred. In a Cournot duopoly model, we compare two forms between competitors of different productivity, ad and per‐unit licensing. This paper finds that superior to for firm cost‐reducing innovation non‐drastic. The reason this result cross reduces output market competition thus enjoys better profit margins by strategically setting...

In this paper we study the optimal file-sharing mechanism in a peer-to-peer network with design perspective. This improves upon existing incentive schemes. particular, show that peer-approved scheme is never and service-quality only under certain circumstances. Moreover, find can be implemented by mixture of

It is well established in vertical product differentiation models that the high–quality firm reaps a larger profit two–stage quality–price game as long cost of quality improvement zero or borne fixed first stage choice. This note shows advantage may fail to hold if there variable production dependent on quality.

This paper finds that in a linear Stackelberg duopoly model, the follower is more likely to license cost‐reducing innovation leader than follower, regardless of whether licensing form fixed fee or royalty per unit output. Under fixed‐fee licensing, gains from small innovations while large non‐drastic innovations. always an innovation.

Game theory, as a branch of the applied mathematics, contributes insight into economics, sociology, and many other disciplines.Game theory has outstanding effects on literature applying game theoretical related approaches to economics is growing rapidly, yet empirical challenges remain in this field.The focus special issue application problems including economic microeconomics, industrial fields.The publication can efficiently extend applications attracts attention economists theory.This...

ABSTRACT Using a standard differentiated goods quantity competition setting, we show three facts about horizontal two‐firm mergers that are not true for homogeneous Cournot market. First, merger of two firms is profitable the merging provided sufficiently distant substitutes. Second, can lead to more mergers. Third, an initially non‐profitable occur in anticipation subsequent These imply likely markets than markets.