Codes of best practice in competitive markets for managers

We study firms' corporate governance in environments where possibly heterogeneous shareholders compete for possibly heterogeneous managers. A firm, formed by a shareholder and a manager, can sign either an incentive contract or a contract including a Code of Best Practice. A Code allows for a better manager's control but makes manager's decisions hard to react when market conditions change. It tends to be adopted in markets with low volatility and in low-competitive environments. The firms with the best projects tend to adopt the Code when managers are not too heterogeneous while the best managers tend to be hired through incentive contracts when the projects are similar. Although the matching between shareholders and managers is often positively assortative, the shareholders with the best projects might be willing to renounce to hire the best managers, signing contracts including Codes with lower-ability managers.

The Multiple-partners assignment game with heterogeneous sales and multi-unit demands: competitive equilibria

A multiple-partners assignment game with heterogeneous sales and multiunit demands consists of a set of sellers that own a given number of indivisible units of (potentially many different) goods and a set of buyers who value those units and want to buy at most an exogenously fixed number of units. We define a competitive equilibrium for this generalized assignment game and prove its existence by using only linear programming. In particular, we show how to compute equilibrium price vectors from the solutions of the dual linear program associated to the primal linear program defined to find optimal assignments. Using only linear programming tools, we also show (i) that the set of competitive equilibria (pairs of price vectors and assignments) has a Cartesian product structure: each equilibrium price vector is part of a competitive equilibrium with all optimal assignments, and vice versa; (ii) that the set of (restricted) equilibrium price vectors has a natural lattice structure; and (iii) how this structure is translated into the set of agents' utilities that are attainable at equilibrium.

On Cooperative solutions of a generalized assignment game: limit theorems to the set of competitive equilibria

We study two cooperative solutions of a market with indivisible goods modeled as a generalized assignment game: Set-wise stability and Core. We first establish that the Set-wise stable set is contained in the Core and it contains the non-empty set of competitive equilibrium payoffs. We then state and prove three limit results for replicated markets. First, the sequence of Cores of replicated markets converges to the set of competitive equilibrium payoffs when the number of replicas tends to infinity. Second, the Set-wise stable set of a two-fold replicated market already coincides with the set of competitive equilibrium payoffs. Third, for any number of replicas there is a market with a Core payoff that is not a competitive equilibrium payoff.

Product differentiation, competitive pressure and the effects of innovation on the success and survivability of firms in oligopoly markets

In a recent paper Tishler and Milstein (2009) fi…nd that increased competition may increase aggregate R&D spending while market output decreases. Therefore, they obtain the surprising result that R&D spending is excessive when competition becomes intense. Their result is based on the standard linear demand function for differentiated products introduced by Bowley (1924) where decreased product differentiation is interpreted as more competitive pressure. In this paper I show that at an aggregate level this interpretation is problematic because equilibrium effects are dominated by a demand reduction effect. A slight modifi…cation of the standard demand function eliminates this effect. For the Tishler and Milstein (2009) setting it is shown that then increased competition increases both R&D spending and aggregate market output. Therefore, at least for consumers, more intense competition increases welfare. Journal of Economic Literature Classi…fication Numbers: D43, L1, O3. Keywords: Oligopoly markets, Product differentiation, Competitive pressure.

Evaluation of susceptibility of pear and plum varieties and rootstocks to Ca. P. pyri and Ca. P. prunorum using Real-Time PCR

Real-time PCR was used to quantify phytoplasma concentration in fifty inoculated trees from five Prunus rootstocks and in forty-eight symptomatic pear and Japanese plum trees from orchards. Seasonal fluctuation of Ca. P. prunorum in different Prunus rootstocks, over three years, showed that the highest percentage detected by nested-PCR was in the ‘Garnem’ rootstock on nearly all sampling dates. Intra-varietal differences were also observed. Phytoplasma titer could be estimated by real time PCR in some trees of the rootstocks ‘Garnem’, ‘Barrier’, ‘GF-677’ and ‘Marianna’, and ranged from 4.7x105 to 3.18x109 phytoplasmas per gram of tissue. Quantification by real-time PCR was not possible in the ‘Cadaman’ trees analyzed, probably due to a lower phytoplasma titer in this variety. Samples from infected trees from commercial plots had different phytoplasma concentration and detection percentage depending on the variety, both being lower in ‘Fortune’ and ‘606’ Japanese plum and in ‘Blanquilla’ pear trees.

Innovation or Imitation? The effect of spillovers and competitive pressure on firms' R&D strategy choice

This article provides a theoretical and empirical analysis of a firm's optimal R&D strategy choice. In this paper a firm's R&D strategy is assumed to be endogenous and allowed to depend on both internal firms. characteristics and external factors. Firms choose between two strategies, either they engage in R&D or abstain from own R&D and imitate the outcomes of innovators. In the theoretical model this yields three types of equilibria in which either all firms innovate, some firms innovate and others imitate, or no firm innovates. Firms'equilibrium strategies crucially depend on external factors. We find that the efficiency of intellectual property rights protection positively affects firms'incentives to engage in R&D, while competitive pressure has a negative effect. In addition, smaller firms are found to be more likely to become imitators when the product is homogeneous and the level of spillovers is high. These results are supported by empirical evidence for German .rms from manufacturing and services sectors. Regarding social welfare our results indicate that strengthening intellectual property protection can have an ambiguous effect. In markets characterized by a high rate of innovation a reduction of intellectual property rights protection can discourage innovative performance substantially. However, a reduction of patent protection can also increase social welfare because it may induce imitation. This indicates that policy issues such as the optimal length and breadth of patent protection cannot be resolved without taking into account specific market and firm characteristics. Journal of Economic Literature Classification Numbers: C35, D43, L13, L22, O31. Keywords: Innovation; imitation; spillovers; product differentiation; market competition; intellectual property rights protection.

Desenvolupament d'eines d'alta ressolució per al cribatge (screening) de l'activitat de fàrmacs

Projecte de recerca elaborat a partir d’una estada a la Satandford University, EEUU, entre 2007 i 2009. Els darrers anys, hi ha hagut un avanç espectacular en la tecnologia aplicada a l’anàlisi del genoma i del proteoma (microarrays, PCR quantitativa real time, electroforesis dos dimensions, espectroscòpia de masses, etc.) permetent la resolució de mostres complexes i la detecció quantitativa de diferents gens i proteïnes en un sol experiment. A més a més, la seva importància radica en la capacitat d’identificar potencials dianes terapèutiques i possibles fàrmacs, així com la seva aplicació en el disseny i desenvolupament de noves eines de diagnòstic. L’aplicabilitat de les tècniques actuals, però, està limitada al nivell al que el teixit pot ser disseccionat. Si bé donen valuosa informació sobre expressió de gens i proteïnes implicades en una malaltia o en resposta a un fàrmac per exemple, en cap cas, s’obté una informació in situ ni es pot obtenir informació espacial o una resolució temporal, així com tampoc s’obté informació de sistemes in vivo. L’objectiu d’aquest projecte és desenvolupar i validar un nou microscopi, d’alta resolució, ultrasensible i de fàcil ús, que permeti tant la detecció de metabòlits, gens o proteïnes a la cèl•lula viva en temps real com l’estudi de la seva funció. Obtenint així una descripció detallada de les interaccions entre proteïnes/gens que es donen dins la cèl•lula. Aquest microscopi serà un instrument sensible, selectiu, ràpid, robust, automatitzat i de cost moderat que realitzarà processos de cribatge d’alt rendiment (High throughput screening) genètics, mèdics, químics i farmacèutics (per aplicacions diagnòstiques i de identificació i selecció de compostos actius) de manera més eficient. Per poder realitzar aquest objectius el microscopi farà ús de les més noves tecnologies: 1)la microscopia òptica i d’imatge, per millorar la visualització espaial i la sensibilitat de l’imatge; 2) la utilització de nous mètodes de detecció incloent els més moderns avanços en nanopartícules; 3) la creació de mètodes informàtics per adquirir, emmagatzemar i processar les imatges obtingudes.

Incorporating waiting time in competitive location models: formulations and heuristics

In this paper we propose a metaheuristic to solve a new version of the Maximum Capture Problem. In the original MCP, market capture is obtained by lower traveling distances or lower traveling time, in this new version not only the traveling time but also the waiting time will affect the market share. This problem is hard to solve using standard optimization techniques. Metaheuristics are shown to offer accurate results within acceptable computing times.

Market versus limit orders in an imperfectly competitive security

This paper analyzes the choice between limit and market orders in animperfectly competitive noisy rational expectations economy. There is a uniqueinsider, who takes into account the effect their trading has on prices. If theinsider behaves as a price taker, she will choose market orders if her privateinformation is very precise and she will choose limit orders otherwise. On thecontrary, if the insider recognizes and exploits her ability to affect themarket price, her optimal choice is to place limit orders whatever the precisionof her private information.

Competitive location and pricing on networks

In this paper we consider a location and pricing model for a retail firm that wants to enter a spatial market where a competitor firm is already operating as a monopoly with several outlets. The entering firms seeks to determine the optimal uniform mill price and its servers' locations that maximizes profits given the reaction in price of the competitor firm to its entrance. A tabu search procedure is presentedto solve the model together with computational experience.

Location of hubs in a competitive environment

We offer a formulation that locates hubs on a network in a competitiveenvironment; that is, customer capture is sought, which happenswhenever the location of a new hub results in a reduction of thecurrent cost (time, distance) needed by the traffic that goes from thespecified origin to the specified destination.The formulation presented here reduces the number of variables andconstraints as compared to existing covering models. This model issuited for both air passenger and cargo transportation.In this model, each origin-destination flow can go through either oneor two hubs, and each demand point can be assigned to more than a hub,depending on the different destinations of its traffic. Links(``spokes'' have no capacity limit. Computational experience is provided.

Psychological pressure in competitive environments: Evidence from a randomized natural experiment

Much like cognitive abilities, emotional skills can have major effects on performance and economic outcomes. This paper studies the behavior of professionalsubjects involved in a dynamic competition in their own natural environment. Thesetting is a penalty shoot-out in soccer where two teams compete in a tournamentframework taking turns in a sequence of five penalty kicks each. As the kicking order is determined by the random outcome of a coin flip, the treatment and control groups are determined via explicit randomization. Therefore, absent any psychological effects, both teams should have the same probability of winning regardless of the kicking order. Yet, we find a systematic first-kicker advantage. Using data on 2,731 penalty kicks from 262 shoot-outs for a three decade period, we find that teams kicking first win the penalty shoot-out 60.5% of the time. A dynamic panel data analysis shows that the psychological mechanism underlying this result arises from the asymmetry in the partial score. As most kicks are scored, kicking first typically means having the opportunity to lead in the partial score, whereas kicking second typically means lagging in the score and having the opportunity to, at most, get even. Having a worse prospect than the opponent hinders subjects' performance.Further, we also find that professionals are self-aware of their own psychological effects. When a recent change in regulations gives winners of the coin toss the chance to choose the kicking order, they rationally react to it by systematically choosing to kick first. A survey of professional players reveals that when asked to explain why they prefer to kick first, they precisely identify the psychological mechanism for which we find empirical support in the data: they want to lead in the score inorder to put pressure on the opponent.