An experiment on spatial competition with endogenous pricing

Hotelling's (1929) principle of minimum differentiation and the alternative prediction that firms will maximally differentiate from their rivals in order to relax price competition have not been explicitly tested so far. We report results from experimental spatial duopolies designed to address this issue. The levels of product differentiation observed are systematically lower than predicted in equilibrium under risk neutrality and compatible with risk aversion. The observed prices are consistent with collusion attempts. Our main findings are robust to variations in three experimental conditions: automated vs. human market sharing rule for ties, individual vs. collective decision making, and even vs. odd number of locations.

Multiproduct activity and competition policy: The Tetra Pak case

We propose the Tetra Pak case as a real-world example to study the implications of multiproduct activity for European Competition Policy. Tetra Pak, a monopolist in aseptic carton packaging of liquid food, competes with Elopak in the nonaseptic sector. The EC Commission used the effect of Tetra Pak's dominance in the aseptic sector on its rival's performance as an evidence of the former's anticompetitive behavior. With linear demand and cost functions and interdependent demands, the Commission's position can be supported. However, a more general model suggests that the Commission's conclusions cannot be supported as the unique outcome of the analysis of the information available.

Linear vs. log-linear unit-root specification: an application of mis-specification encompassing

The objective of this paper is to apply the mis-specification (M-S) encompassing perspective to the problem of choosing between linear and log-linear unit-root models. A simple M-S encompassing test, based on an auxiliary regression stemming from the conditional second moment, is proposed and its empirical size and power are investigated using Monte Carlo simulations. It is shown that by focusing on the conditional process the sampling distributions of the relevant statistics are well behaved under both the null and alternative hypotheses. The proposed M-S encompassing test is illustrated using US total disposable income quarterly data.

Monopolistic product line competition with ex post consumer heterogeneity

We model monopolistic competition in product lines, assuming that consumer heterogeneity is the result rather than the cause of product variety. Our results contradict some well-known policy implications yielded by the standard monopolistic competition framework.

Emotional arousal amplifies the effects of biased competition in the brain

The arousal-biased competition model predicts that arousal increases the gain on neural competition between stimuli representations. Thus, the model predicts that arousal simultaneously enhances processing of salient stimuli and impairs processing of relatively less-salient stimuli. We tested this model with a simple dot-probe task. On each trial, participants were simultaneously exposed to one face image as a salient cue stimulus and one place image as a non-salient stimulus. A border around the face cue location further increased its bottom-up saliency. Before these visual stimuli were shown, one of two tones played: one that predicted a shock (increasing arousal) or one that did not. An arousal-by-saliency interaction in category-specific brain regions (fusiform face area for salient faces and parahippocampal place area for non-salient places) indicated that brain activation associated with processing the salient stimulus was enhanced under arousal whereas activation associated with processing the non-salient stimulus was suppressed under arousal. This is the first functional magnetic resonance imaging study to demonstrate that arousal can enhance information processing for prioritized stimuli while simultaneously impairing processing of non-prioritized stimuli. Thus, it goes beyond previous research to show that arousal does not uniformly enhance perceptual processing, but instead does so selectively in ways that optimizes attention to highly salient stimuli.

Competition and dispersal in Pseudomonas aeruginosa

Dispersal plays a crucial role in a range of evolutionary and ecological processes; hence there is strong motivation to understand its evolution. One key prediction is that the relative benefits of dispersal should be greater when dispersing away from close relatives, because in this case dispersal has the additional benefit of alleviating competition with individuals who share the same dispersal alleles. We tested this prediction for the first time using experimental populations of the opportunistic pathogen Pseudomonas aeruginosa. We measured the fitness of isogenic genotypes that differed only in their dispersal behaviors in both clonal and mixed populations. Consistent with theory, the benefit of dispersal was much higher in clonal populations, and this benefit decreased with increasing growth rate costs associated with dispersal.

A dynamic mechanistic model of lactic acid metabolism in the rumen

Current feed evaluation systems for ruminants are too imprecise to describe diets in terms of their acidosis risk. The dynamic mechanistic model described herein arises from the integration of a lactic acid (La) metabolism module into an extant model of whole-rumen function. The model was evaluated using published data from cows and sheep fed a range of diets or infused with various doses of La. The model performed well in simulating peak rumen La concentrations (coefficient of determination = 0.96; root mean square prediction error = 16.96% of observed mean), although frequency of sampling for the published data prevented a comprehensive comparison of prediction of time to peak La accumulation. The model showed a tendency for increased La accumulation following feeding of diets rich in nonstructural carbohydrates, although less-soluble starch sources such as corn tended to limit rumen La concentration. Simulated La absorption from the rumen remained low throughout the feeding cycle. The competition between bacteria and protozoa for rumen La suggests a variable contribution of protozoa to total La utilization. However, the model was unable to simulate the effects of defaunation on rumen La metabolism, indicating a need for a more detailed description of protozoal metabolism. The model could form the basis of a feed evaluation system with regard to rumen La metabolism.

Strategic trade policy, competition, and welfare: the case of voluntary export restraints between Britain and Japan (1971–2002)

I evaluate the voluntary export restraint placed on Japanese automobile exports from 1977 to 1999 by the UK. I show that the policy failed to assist the British domestic car industry. Instead, UK-based US multi-nationals and Japanese manufacturers were the primary beneficiaries, at a substantial cost to UK consumers. Whilst there are a number of caveats, the policy was on balance damaging to the UK economy in welfare terms.

An experiment on energy-saving competition with socially responsible consumers: opening the black box

We present results from experimental price-setting oligopolies in which green firms undertake different levels of energy-saving investments motivated by public subsidies and demand-side advantages. We find that consumers reveal higher willingness to pay for greener sellers’ products. This observation in conjunction to the fact that greener sellers set higher prices is compatible with the use and interpretation of energy-saving behaviour as a differentiation strategy. However, sellers do not exploit the resulting advantage through sufficiently high price-cost margins, because they seem trapped into “run to stay still” competition. Regarding the use of public subsidies to energy-saving sellers we uncover an undesirable crowding-out effect of consumers’ intrinsic tendency to support green manufacturers. Namely, consumers may be less willing to support a green seller whose energy-saving strategy yields a direct financial benefit. Finally, we disentangle two alternative motivations for consumer’s attractions to pro-social firms; first, the self-interested recognition of the firm’s contribution to the public and private welfare and, second, the need to compensate a firm for the cost entailed in each pro-social action. Our results show the prevalence of the former over the latter.

Root elongation rate is correlated with the length of the bare root apex of maize and lupin roots despite contrasting responses of root growth to compact and dry soils

Background We investigated interacting effects of matric potential and soil strength on root elongation of maize and lupin, and relations between root elongation rates and the length of bare (hairless) root apex. Methods Root elongation rates and the length of bare root apexwere determined formaize and lupin seedlings in sandy loam soil of various matric potentials (−0.01 to −1.6 MPa) and bulk densities (0.9 to 1.5 Mg m−3). Results Root elongation rates slowed with both decreasing matric potential and increasing penetrometer resistance. Root elongation of maize slowed to 10 % of the unimpeded rate when penetrometer resistance increased to 2 MPa, whereas lupin elongated at about 40 % of the unimpeded rate. Maize root elongation rate was more sensitive to changes in matric potential in loosely packed soil (penetrometer resistances <1 MPa) than lupin. Despite these differing responses, root elongation rate of both species was linearly correlated with length of the bare root apex (r2 0.69 to 0.97). Conclusion Maize root elongation was more sensitive to changes in matric potential and mechanical impedance than lupin. Robust linear relationships between elongation rate and length of bare apex suggest good potential for estimating root elongation rates for excavated roots.

Field phenotyping of potato to assess root and shoot characteristics associated with drought tolerance

Aims Potatoes are a globally important source of food whose production requires large inputs of fertiliser and water. Recent research has highlighted the importance of the root system in acquiring resources. Here measurements, previously generated by field phenotyping, tested the effect of root size on maintenance of yield under drought (drought tolerance). Methods Twelve potato genotypes, including genotypes with extremes of root size, were grown to maturity in the field under a rain shelter and either irrigated or subjected to drought. Soil moisture, canopy growth, carbon isotope discrimination and final yields were measured. Destructively harvested field phenotype data were used as explanatory variables in a general linear model (GLM) to investigate yield under conditions of drought or irrigation. Results Drought severely affected the small rooted genotype Pentland Dell but not the large rooted genotype Cara. More plantlets, longer and more numerous stolons and stolon roots were associated with drought tolerance. Previously measured carbon isotope discrimination did not correlate with the effect of drought. Conclusions These data suggest that in-field phenotyping can be used to identify useful characteristics when known genotypes are subjected to an environmental stress. Stolon root traits were associated with drought tolerance in potato and could be used to select genotypes with resilience to drought.

Global patterns of plant root colonization intensity by mycorrhizal fungi explained by climate and soil chemistry

Aim Most vascular plants on Earth form mycorrhizae, a symbiotic relationship between plants and fungi. Despite the broad recognition of the importance of mycorrhizae for global carbon and nutrient cycling, we do not know how soil and climate variables relate to the intensity of colonization of plant roots by mycorrhizal fungi. Here we quantify the global patterns of these relationships. Location Global. Methods Data on plant root colonization intensities by the two dominant types of mycorrhizal fungi world-wide, arbuscular (4887 plant species in 233 sites) and ectomycorrhizal fungi (125 plant species in 92 sites), were compiled from published studies. Data for climatic and soil factors were extracted from global datasets. For a given mycorrhizal type, we calculated at each site the mean root colonization intensity by mycorrhizal fungi across all potentially mycorrhizal plant species found at the site, and subjected these data to generalized additive model regression analysis with environmental factors as predictor variables. Results We show for the first time that at the global scale the intensity of plant root colonization by arbuscular mycorrhizal fungi strongly relates to warm-season temperature, frost periods and soil carbon-to-nitrogen ratio, and is highest at sites featuring continental climates with mild summers and a high availability of soil nitrogen. In contrast, the intensity of ectomycorrhizal infection in plant roots is related to soil acidity, soil carbon-to-nitrogen ratio and seasonality of precipitation, and is highest at sites with acidic soils and relatively constant precipitation levels. Main conclusions We provide the first quantitative global maps of intensity of mycorrhizal colonization based on environmental drivers, and suggest that environmental changes will affect distinct types of mycorrhizae differently. Future analyses of the potential effects of environmental change on global carbon and nutrient cycling via mycorrhizal pathways will need to take into account the relationships discovered in this study.