Country asymmetries, endogenous product choice and the speed of trade liberalization

In a world with two countries which differ in size, we study theimpact of (the speed of) trade liberalization on firms' profitsand total welfare of the countries involved. Firms correctlyanticipate the pace of trade liberalization and take it intoaccount when deciding on their product choices, which areendogenously determined at the beginning of the game. Competitionin the marketplace then occurs either on quantities or on prices.As long as the autarkic phase continues, local firms are nationalmonopolists. When trade liberalization occurs, firms compete in aninternational duopoly. We analyze trade effects by using twodifferent models of product differentiation. Across all thespecifications adopted (and independently of the price v. quantitycompetition hypothesis), total welfare always unambiguously riseswith the speed of trade liberalization: Possible losses by firmsare always outweighed by consumers' gains, which come under theform of lower prices, enlarged variety of higher average qualitiesavailable. The effect on profits depends on the type of industryanalyzed. Two results in particular seem to be worth of mention.With vertical product differentiation and fixed costs of qualityimprovements, the expected size of the market faced by the firmsdetermines the incentive to invest in quality. The longer the periodof autarky, the lower the possibility that the firm from the smallcountry would be producing the high quality and be the leader in theinternational market when it opens. On the contrary, when trade opensimmediately, national markets do not play any role and firms fromdifferent countries have the same opportunity to become the leader.Hence, immediate trade liberalization might be in the interest ofproducers in the small country. In general, the lower the size of thesmall country, the more likely its firm will gain from tradeliberalization. Losses from the small country firm can arise when itis relegated to low quality good production and the domestic marketsize is not very small. With horizontal product differentiation (thehomogeneous good case being a limit case of it when costs ofdifferentiation tend to infinity), investments in differentiationbenefit both firms in equal manner. Firms from the small country do notrun the risk of being relegated to a lower competitive position undertrade. As a result, they would never lose from it. Instead, firms fromthe large country may still incur losses from the opening of trade whenthe market expansion effect is low (i.e. when the country is very largerelative to the other).

Pharmaceutical generics, vertical product differentiation and public policy

This paper studies oligopolistic competition in off-patent pharmaceuticalmarkets using a vertical product differentiation model. This model canexplain the observation that countries with stronger regulations havesmaller generic market shares. It can also explain the differences inobserved regulatory regimes. Stronger regulation may be due to a higherproportion of production that is done by foreign firms. Finally, a closelyrelated model can account for the observed increase in prices by patentowners after entry of generic producers.

Product market deregulation and the U.S. employment miracle

We consider the dynamic relationship between product market entry regulation and equilibrium unemployment. The main theoretical contribution is combining a job matchingmodel with monopolistic competition in the goods market and individual wage bargaining.Product market competition affects unemployment by two channels: the output expansion effect and a countervailing effect due to a hiring externality. Competition is then linked to barriers to entry. We calibrate the model to US data and perform a policy experiment to assess whether the decrease in trend unemployment during the 1980 s and 1990 s could be attributed to product market deregulation. Our quantitative analysis suggests that under individual bargaining, a decrease of less than two tenths of a percentage point of unemployment rates can be attributed to product market deregulation, a surprisingly small amount.

Failure to collude in the presence of asymmetric information

In this paper, we design the optimal contract when two agents can collude under asymmetric information. They have correlated types, produce complementary inputs and are protected by limited liability. Therefore, a joint manipulation of reports allows them to internalize informational and productive externalities. We show that by taking advantage of the transaction costs created by asymmetric information, even though they collude, the principal can achieve the outcome without collusion regardless of the sign and the degree of correlation. In particular, the principal can implement a non-monotonic quantity schedule in a collusion-proof way while this is impossible if collusion occurs under complete information.

Effects of employment protection and product market regulations on the Italian labor market

Labor market regulations have often being blamed for high and persistentunemployment in Europe, but evidence on their impact remains mixed. Morerecently, attention has turned to the impact of product market regulationson employment growth. This paper analyzes how labor and product marketregulations interact to affect turnover and employment. We present a matchingmodel which illustrates how barriers to entry in the product market mitigatethe impact of labor market deregulation. We, then, use the Italian SocialSecurity employer-employee panel to study the interaction between barriersto entry and dismissal costs. We exploit the fact that costs for unjustdismissals in Italy increased for firms below 15 employees relative to biggerfirms after 1990. We find that the increase in dismissal costs after 1990decreased accessions and separations in small relative to big firms,especially for women. Moreover, consistent with our model, we find evidencethat the increase in dismissal costs had smaller effects on turnover for womenin sectors faced with strict product market regulations.

Synovial fluid examination for the diagnosis of synovial amyloidosis in patients with chronic renal failure undergoing haemodialysis

The diagnosis of synovial amyloidosis is based upon synovial biopsy. Synovial fluid (SF) in seven patients with amyloid arthropathy associated with chronic renal failure undergoing haemodialysis were studied. The SF and synovial samples of 10 consecutive patients with seronegative mono- or oligoarthritis served as controls. Six of the seven patients with amyloid positive synovial biopsy specimens showed amyloid in their SF. No amyloid was found in the synovial tissue or fluid of the 10 patients in the control group, the sensitivity being 87.7%. The finding of amyloid in SF was highly reproducible, showing its presence in the same joint on several occasions. The deposits were Congophilia resistant to potassium permanganate pretreatment, and the immunohistochemical analysis proved that they contained beta 2 microglobulin. The high sensitivity and good reproducibility of the method shows that the finding of amyloid in SF is sufficient for the diagnosis of synovial amyloidosis. It is possible to perform immunohis

Clinical picture of the amyloid arthropathy in patients with chronic renal failure maintained on haemodialysis using cellulose membranes.

The clinical picture of 15 patients (10 male, five female) with amyloid arthropathy secondary to chronic renal failure treated with haemodialysis has been studied. The average period of haemodialysis was 10.8 years. Joint symptoms appeared between three and 13 years after starting haemodialysis. No patient had renal amyloidosis. Early symptoms were varied and often overlapped: knee swelling (seven patients), painful and stiff shoulders (seven), and carpal tunnel syndrome (six) were the most prominent. Follow up showed extension to other joints. Joint effusions were generally of the non-inflammatory type. Radiologically, geodes and erosions of variable sizes were seen in the affected joints, which can develop into a destructive arthropathy. Amyloid was found in abdominal fat in three of the 12 patients on whom a needle aspiration was performed. Four of 12 patients showed changes compatible with amyloid infiltration in the echocardiogram. One patient had amyloid in the gastric muscular layer, another in the colon mucus, and two of four in rectal biopsy specimens. Amyloid deposits showed the presence of beta 2 microglobulin in 10 patients. The clinical and radiological picture was similar to the amyloid arthropathy associated with multiple myeloma. These patients can develop systemic amyloidosis.

Clinical picture of the amyloid arthropathy in patients with chronic renal failure maintained on haemodialysis using cellulose membranes.

The clinical picture of 15 patients (10 male, five female) with amyloid arthropathy secondary to chronic renal failure treated with haemodialysis has been studied. The average period of haemodialysis was 10.8 years. Joint symptoms appeared between three and 13 years after starting haemodialysis. No patient had renal amyloidosis. Early symptoms were varied and often overlapped: knee swelling (seven patients), painful and stiff shoulders (seven), and carpal tunnel syndrome (six) were the most prominent. Follow up showed extension to other joints. Joint effusions were generally of the non-inflammatory type. Radiologically, geodes and erosions of variable sizes were seen in the affected joints, which can develop into a destructive arthropathy. Amyloid was found in abdominal fat in three of the 12 patients on whom a needle aspiration was performed. Four of 12 patients showed changes compatible with amyloid infiltration in the echocardiogram. One patient had amyloid in the gastric muscular layer, another in the colon mucus, and two of four in rectal biopsy specimens. Amyloid deposits showed the presence of beta 2 microglobulin in 10 patients. The clinical and radiological picture was similar to the amyloid arthropathy associated with multiple myeloma. These patients can develop systemic amyloidosis.

Synovial fluid examination for the diagnosis of synovial amyloidosis in patients with chronic renal failure undergoing haemodialysis

The diagnosis of synovial amyloidosis is based upon synovial biopsy. Synovial fluid (SF) in seven patients with amyloid arthropathy associated with chronic renal failure undergoing haemodialysis were studied. The SF and synovial samples of 10 consecutive patients with seronegative mono- or oligoarthritis served as controls. Six of the seven patients with amyloid positive synovial biopsy specimens showed amyloid in their SF. No amyloid was found in the synovial tissue or fluid of the 10 patients in the control group, the sensitivity being 87.7%. The finding of amyloid in SF was highly reproducible, showing its presence in the same joint on several occasions. The deposits were Congophilia resistant to potassium permanganate pretreatment, and the immunohistochemical analysis proved that they contained beta 2 microglobulin. The high sensitivity and good reproducibility of the method shows that the finding of amyloid in SF is sufficient for the diagnosis of synovial amyloidosis. It is possible to perform immunohis

Amyloid arthropathy in patients undergoing periodical haemodialysis for chronic renal failure: a new complication.

Seven patients (five male and two female) with chronic renal failure (CRF) treated by periodical haemodialysis presented with swelling and effusion of more than three months' duration in knees (four bilateral), shoulders (two, one of them bilateral), elbow (one), and ankle (one). Four had a carpal tunnel syndrome both clinically and electromyographically (three bilateral). All patients had hyperparathyroidism secondary to their CRF, which was not due to amyloidosis in any of them. The dialysis duration period varied from five to 14 years, with an average of 8.6 years. Amyloid deposits (Congo red positive areas with green birefringence under polarising microscopy) were shown in six of the seven synovial biopsy specimens of the knee, in five of the sediments of the synovial fluids, and in specimens removed during carpal tunnel syndrome surgery. No amyloid was found in the biopsy specimen of abdominal fat of six of the patients. The finding of amyloid only in the synovial membrane and fluid, and carpal tunnel, its absence in abdominal fat, and the lack of other manifestations of generalised amyloidosis (cardiomyopathy, malabsorption syndrome, macroglossia, etc.) and of Bence Jones myeloma (protein immunoelectrophoresis normal) raises the possibility that this is a form of amyloidosis which is peculiar to CRF treated by periodical haemodialysis.

Generic brands and product differentiation strategies

Generic or own brand products were initially only lesser expensive copies of the branded label alternative, but nowadays, pricing alone is not enough in order to survive in the Fast Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG)markets. With this in mind manufacturers of generic brands have adapted to this rapidlygrowing niche by investing in design and marketing during the initial phase in order to be perceived as having a quality product comparable to that of the branded products. In addition, they have gone further ahead with a second phase and resorted to innovativeproduct differentiation strategies and even pure innovation in many cases. These strategies have granted generic brands constantly increasing market shares and a position of equals relative to national brands.Using previous analyses and case studies, this paper will provide conceptual and empirical evidence to explain the surprisingly fast growth and penetration of generic supermarket brands, which in their relatively short lifespan, have grown to rival the historical market leaders, the branded products. According to this analysis, the main conclusion is that the growth in generic brands can be explained not only by price competition, but also by the use of innovative product differentiation strategies.

Effects of erythropoietin on muscle O2 transport during exercise in patients with chronic renal failure.

Erythropoietin (rHuEPO) has proven to be effective in the treatment of anemia of chronic renal failure (CRF). Despite improving the quality of life, peak oxygen uptake after rHuEPO therapy is not improved as much as the increase in hemoglobin concentration ([Hb)] would predict. We hypothesized that this discrepancy is due to failure of O2 transport rates to rise in a manner proportional to [Hb]. To test this, eight patients with CRF undergoing regular hemodialysis were studied pre- and post-rHuEPO ([Hb] = 7.5 +/- 1.0 vs. 12.5 +/- 1.0 g x dl-1) using a standard incremental cycle exercise protocol. A group of 12 healthy sedentary subjects of similar age and anthropometric characteristics served as controls. Arterial and femoral venous blood gas data were obtained and coupled with simultaneous measurements of femoral venous blood flow (Qleg) by thermodilution to obtain O2 delivery and oxygen uptake (VO2). Despite a 68% increase in [Hb], peak VO2 increased by only 33%. This could be explained largely by reduced peak leg blood flow, limiting the gain in O2 delivery to 37%. At peak VO2, after rHuEPO, O2 supply limitation of maximal VO2 was found to occur, permitting the calculation of a value for muscle O2 conductance from capillary to mitochondria (DO2). While DO2 was slightly improved after rHuEPO, it was only 67% of that of sedentary control subjects. This kept maximal oxygen extraction at only 70%. Two important conclusions can be reached from this study. First, the increase in [Hb] produced by rHuEPO is accompanied by a significant reduction in peak blood flow to exercising muscle, which limits the gain in oxygen transport. Second, even after restoration of [Hb], O2 conductance from the muscle capillary to the mitochondria remains considerably below normal.

Functional renal failure and haemorrhagic gastritis associated with endotoxaemia in cirrhosis

Forty-three patients with cirrhosis and ascites, 21 with normal renal function, 10 with a progressive functional renal failure (FRF), and 12 with a steady FRF, were investigated for the presence of endotoxaemia by the Limulus lysate test. Endotoxaemia was found in nine patients with FRF and in none of the 21 with normal renal function (P less than 0-01). A positive Limulus test was almost exclusively associated with a progressive FRF (eight of 10 patients) and all but one of them died. Renal function improved as endotoxaemia disappeared in the survivor. Endotoxaemia was also associated with haemorrhage due to acute erosions of the gastric mucosa, being present in six of the seven patients who had this complication. Intravascular coagulation was not found in any patient. The Limulus test was positive in the ascitic fluid in 18 of 21 patients tested, although only two of them had peritonitis. These results suggest that endotoxaemia may play a critical role in the development of progressive renal failure and haemorrhagic gastritis in cirrhosis, and emphasise the potential risk of procedures involving reinfusion of ascitic fluid.

Abnormalities of sodium excretion and other disorders of renal function in fulminant hepatic failure

Renal function was evaluated in 40 patients with fulminant hepatic failure, They were divided into two groups on the basis of glomerular filtration rates greater than 40 ml/min or less than 25 ml/min. A number of patients in group 1 had markedly abnormal renal retention of sodium together with a reduced free water clearance and low potassium excretion which could be explained by increased proximal tubular reabsorption of sodium. The patients in group 2 had evidence that renal tubular integrity was maintained when the glomerular filtration rate was greater than or equal ml/min (functional renal failure), but evidence of tubular damage was present when this was less than 3 ml/min (acute tubular necrosis).