Tacit Collusion under Fairness and Reciprocity

This paper departs from the standard profit-maximizing model of firm behavior by assuming that firms are motivated in part by personal animosity-or respect-towards their competitors. A reciprocal firm responds to unkind behavior of rivals with unkind actions (negative reciprocity), while at the same time, it responds to kind behavior of rivals with kind actions (positive reciprocity). We find that collusion is easier to sustain when firms have a concern for reciprocity towards competing firms provided that they consider collusive prices to be kind and punishment prices to be unkind. Thus, reciprocity concerns among firms can have adverse welfare consequences for consumers.

Profound hyperglycemia in knockout mutant mice identifies novel function for POU4F2/Brn-3b in regulating metabolic processes.

The POU4F2/Brn-3b transcription factor has been identified as a potentially novel regulator of key metabolic processes. Loss of this protein in Brn-3b knockout (KO) mice causes profound hyperglycemia and insulin resistance (IR), normally associated with type 2 diabetes (T2D), whereas Brn-3b is reduced in tissues taken from obese mice fed on high-fat diets (HFD), which also develop hyperglycemia and IR. Furthermore, studies in C2C12 myocytes show that Brn-3b mRNA and proteins are induced by glucose but inhibited by insulin, suggesting that this protein is itself highly regulated in responsive cells. Analysis of differential gene expression in skeletal muscle from Brn-3b KO mice showed changes in genes that are implicated in T2D such as increased glycogen synthase kinase-3β and reduced GLUT4 glucose transporter. The GLUT4 gene promoter contains multiple Brn-3b binding sites and is directly transactivated by this transcription factor in cotransfection assays, whereas chromatin immunoprecipitation assays confirm that Brn-3b binds to this promoter in vivo. In addition, correlation between GLUT4 and Brn-3b in KO tissues or in C2C12 cells strongly supports a close association between Brn-3b levels and GLUT4 expression. Since Brn-3b is regulated by metabolites and insulin, this may provide a mechanism for controlling key genes that are required for normal metabolic processes in insulin-responsive tissues and its loss may contribute to abnormal glucose uptake.