Competition and well-being

We study the effects of competition in a context in which people's actions can not be contractually fixed. We find that in such an environment the very presence of competition does neither increase efficiency nor does it yield any payoff gains for the short side of the market. We also find that competition has a strong negative impact on social well-being, the disposition towards others, and individually experienced well-being, the emotional state, of those on the long side of the market. We conjecture that this limits the possibilities of satisfactory interaction in the future and, hence, has negative implications for efficiency in the longer-run

Imperfect competition and market liquidity with a supply informed trader

We develop a model of insider trading where agents have private information either about liquidation value or about supply and behave strategically to maximize their profits. The supply informed trader plays a dual role in market making and in information revelation. This trader not only reveals a part of the information he owns, but he also induces the other traders to reveal more of their private information. The presence of different types of information decreases market liquidity and induces non-monotonicity of the market indicators with respect to the variance of liquidation value. Replacing the noise introduced by liquidity traders with a random supply also allows us to study the effect the shocks on different components of supply have on prices and quantities.

Airline competition and network structure

This paper characterizes the equilibria in airline networks and their welfare implications in an unregulated environment. Competing airlines may adopt either fully-connected (FC) or hub-and-spoke (HS) network structures; and passengers exhibiting low brand loyalty to their preferred carrier choose an outside option to travel so that markets are partially served by airlines. In this context, carriers adopt hubbing strategies when costs are sufficiently low, and asymmetric equilibria where one carrier chooses a FC strategy and the other chooses a HS strategy may arise. Quite interestingly, flight frequency can become excessive under HS network configurations.

Market Competition and Lower Tier Incentives

The relationship between competition and performance-related pay has been analysed in single-principal-single-agent models. While this approach yields good predictions for managerial pay schemes, the predictions fail to apply for employees at lower tiers of a firm's hierarchy. In this paper, a principal-multi-agent model of incentive pay is developed which makes it possible to analyze the effect of changes in the competitiveness of markets on lower tier incentive payment schemes. The results explain why the payment schemes of agents located at low and mid tiers are less sensitive to changes in competition when aggregated firm data is used. JEL classification numbers: D82, J21, L13, L22. Keywords: Cournot competition, Contract delegation, Moral hazard, Entry, Market size, Wage cost.

Multimeric complexes of the PML-retinoic acid receptor alpha fusion protein in acute promyelocytic leukemia cells and interference with retinoid and peroxisome-proliferator signaling pathways.

The t(15;17) chromosomal translocation, specific for acute promyelocytic leukemia (APL), fuses the PML gene to the retinoic acid receptor alpha (RAR alpha) gene, resulting in expression of a PML-RAR alpha hybrid protein. In this report, we analyzed the nature of PML-RAR alpha-containing complexes in nuclear protein extracts of t(15;17)-positive cells. We show that endogenous PML-RAR alpha can bind to DNA as a homodimer, in contrast to RAR alpha that requires the retinoid X receptor (RXR) dimerization partner. In addition, these cells contain oligomeric complexes of PML-RAR alpha and endogenous RXR. Treatment with retinoic acid results in a decrease of PML-RAR alpha protein levels and, as a consequence, of DNA binding by the different complexes. Using responsive elements from various hormone signaling pathways, we show that PML-RAR alpha homodimers have altered DNA-binding characteristics when compared to RAR alpha-RXR alpha heterodimers. In transfected Drosophila SL-3 cells that are devoid of endogenous retinoid receptors PML-RAR alpha inhibits transactivation by RAR alpha-RXR alpha heterodimers in a dominant fashion. In addition, we show that both normal retinoid receptors and the PML-RAR alpha hybrid bind and activate the peroxisome proliferator-activated receptor responsive element from the Acyl-CoA oxidase gene, indicating that retinoids and peroxisome proliferator receptors may share common target genes. These properties of PML-RAR alpha may contribute to the transformed phenotype of APL cells.

Intra-Group Competition and Inter-Group Conflict: An Application to Northern Ireland

This paper reviews four economic theories of leadership selection in conflictual settings. The first of these by Cukierman and Tomassi (1998) labeled the ‘information rationale’, argues that hawks may actually be necessary to initiate peace agreements. The second labeled the ‘bargaining rationale’ borrowing from Hamlin and Jennings (2007) agrees with the conventional wisdom that doves are more likely to secure peace, but post-conflict there are good reasons for hawks to be rationally selected. The third found in Jennings and Roelfsema (2008) is labeled the social psychological rationale. This captures the idea of a competition over which group can form the strongest identity, so can apply to group choices which do not impinge upon bargaining power. As in the bargaining rationale, dove selection can be predicted during conflict, but hawk selection post-conflict. Finally, the expressive rationale is discussed which predicts that regardless of the underlying structure of the game (informational, bargaining, psychological) the large group nature of decision-making by making individual decision makers non-decisive in determining the outcome of elections may cause them to make choices based primarily on emotions which may be invariant with the mode of group interaction, be it conflictual or peaceful. Finally, the paper analyses the extent to which the theories can throw light on Northern Ireland electoral history over the last 25 years.

Universal banking, competition and risk in a macro model

A stylized macroeconomic model is developed with an indebted, heterogeneous Investment Banking Sector funded by borrowing from a retail banking sector. The government guarantees retail deposits. Investment banks choose how risky their activities should be. We compared the benefits of separated vs. universal banking modelled as a vertical integration of the retail and investment banks. The incidence of banking default is considered under different constellations of shocks and degrees of competitiveness. The benefits of universal banking rise in the volatility of idiosyncratic shocks to trading strategies and are positive even for very bad common shocks, even though government bailouts, which are costly, are larger compared to the case of separated banking entities. The welfare assessment of the structure of banks may depend crucially on the kinds of shock hitting the economy as well as on the efficiency of government intervention.

Technical progress and product reliability under competition and monopoly

Technical progress lowers costs and prices but appears to have an ambiguous effect on product reliabilty. This paper presents a simple model which explains this observation.

Trade Costs, International Competition and Selection: The Effects of Unionisation on Market Size

Within a two-country model of international trade in which heterogeneous firms face firm-specific unions, we study the effects of different forms of trade liberalisation on market structure and competitive selection in the presence of inter-country asymmetries in size and labour market institutions. For given levels of trade openness, an increase in a country’s relative unions’ strength reduces the average productivity of its domestic producers but increases that of its exporters. Whilst an unfavourable union power differential, by increasing wages, weakens a country’s firms’ competitive position, the higher wages reinforce standard market access mechanisms to give rise to aggregate income effects. When the initial levels of trade openness are sufficiently low, this ‘expansionary’ aggregate effect can attract industry in the country with stronger unions and also result in an increase in the extensive margin of exports. For sufficiently large inter-country differences in the bargaining power of unions, trade liberalization can then result in a pro-variety effect, with an increase in the total availability of varieties to consumers in both countries, regardless of there being inter-country differences in size.

Market Competition and Lower Tier Incentives

The relationship between competition and performance-related pay has been analyzed in single-principal-single-agent models. While this approach yields good predictions for managerial pay schemes, the predictions fail to apply for employees at lower tiers of a firm's hierarchy. In this paper, a principal-multi-agent model of incentive pay is developed which makes it possible to analyze the effect of changes in the competitiveness of markets on lower tier incentive payment schemes. The results explain why the payment schemes of agents located at low and mid tiers are less sensitive to changes in competition when aggregated firm data is used. Journal of Economic Literature classiffication numbers: D82, J21, L13, L22. Keywords: Cournot Competition, Contract Delegation, Moral Hazard, Entry, Market Size, Wage Cost.

Trade liberalization, competition and growth

Increasing evidence support the claim that international trade enhances innovation and productivity growth through an increase in competition. This paper develops a two-country endogenous growth model, with firm specific R&D and a continuum of oligopolistic sectors under Cournot competition to provide a theoretical support to this claim. Since countries are assumed to produce the same set of varieties, trade openness makes markets more competitive, reducing prices and increasing quantities. Under Cournot competition, trade is pro-competitive. Since firms undertake cost reducing innovations, the increase in production induced by a more competitive market push firms to innovate more. Consequently, a reduction on trade barriers enhances growth by reducing domestic firm's market power.

Monopolistic competition and different wage setting systems

In this paper we match the static disequilibrium unemployment model without frictions in the labor market and monopolistic competition with an infinite horizon model of growth. We compare the wages set at the firm, sector and national (centralized) levels, their unemployment rates and growth of the economic variables, for the Cobb-Douglas production function, in order to see under wich conditions the inverse U hypothesis between unemployment and centralization of wage bargain is confirmed. We also analyze, in the three wage setting systems, the effect of an increase in the monopoly power on employment and growth.

Integrating receptor interactions and dynamics and Interference with endocrine disruptors in the mechanisms of action of PPAR nuclear receptors

Abstract Peroxisome Proliferator-Activated Receptors (PPARs) form a family of three nuclear receptors regulating important cellular and metabolic functions. PPARs control gene expression by directly binding to target promoters as heterodimers with the Retinoid X Receptor (RXR), and their transcriptional activity is enhanced upon activation by natural or pharmacological ligands. The binding of PPAR/RXR heterodimers on target promoters allows the anchoring of a series of coactivators and corepressors involved in promoter remodeling and the recruitment of the transcription machinery. The transcriptional output finally depends on a complex interplay between (i) the respective expression levels of PPARs, RXRs and of other nuclear receptors competing for DNA binding and RXR recruitment, (ii) the availability and the nature of PPAR and RXR ligands, (iii) the expression levels and the nature of the different coactivators and corepressors and (iv) the sequence and the epigenetic status of the promoter. Understanding how all these factors and signals integrate and fine-tune transcription remains a challenge but is necessary to understand the specificity of the physiological functions regulated by PPARs. The work presented herein focuses on the molecular mechanisms of PPAR action and aims at understanding how the interactions and mobility of the receptor modulate transcription in the physiological context of a living cell: Such observations in vivo rely on the use of engineered fluorescent protein chimeras and require the development and the application of complementary imaging techniques such as Fluorescence Recovery After Photobleaching (FRAP), Fluorescence Resonance Energy Transfer (FRET) and Fluorescence Correlation Spectroscopy (FCS). Using such techniques, PPARs are shown to reside solely in the nucleus where they are constitutively associated with RXR but transcriptional activation by ligand binding -does not promote the formation of sub-nuclear structures as observed with other nuclear receptors. In addition, the engagement of unliganded PPARs in large complexes of cofactors in living cells provides a molecular basis for their ligand-independent activity. Ligand binding reduces receptor diffusion by promoting the recruitment of coactivators which further enlarge the size of PPAR complexes to acquire full transcriptional competence. Using these molecular approaches, we deciphered the molecular mechanisms through which phthalates, a class of pollutants from the plastic industry, interfere with PPARγ signaling. Mono-ethyl-hexyl-phthalate (MEHP) binding induces the recruitment of a specific subset of cofactors and translates into the expression of a specific subset of target genes, the transcriptional output being strongly conditioned by the differentiation status of the cell. This selective PPARγ modulation induces limited adipogenic effects in cellular models while exposure to phthalates in animal models leads to protective effects on glucose tolerance and diet-induced obesity. These results demonstrate that phthalates influence lipid and carbohydrate metabolism through complex mechanisms which most likely involve PPARγ but also probably PPARα and PPARß, Altogether, the molecular and physiological demonstration of the interference of pollutants with PPAR action outlines an important role of chemical exposure in metabolic regulations. Résumé Les PPARs (Peroxisome Proliferator-Activated Receptors) forment une famille de récepteurs nucléaires qui régulent des fonctions cellulaires et métaboliques importantes. Les PPARs contrôlent l'expression des gènes en se liant directement à leurs promoteurs sous forme d'hétérodimères avec les récepteurs RXR (Retinoid X Receptor), et leur activité transcriptionnelle est stimulée par la liaison de ligands naturels ou pharmacologiques. L'association des hétérodimères PPAR/RXR avec les promoteurs des gènes cibles permet le recrutement de coactivateurs et de corépresseurs qui vont permettre le remodelage de la chromatine et le recrutement de la machinerie transcriptionnelle. Les actions transcriptionnelles du récepteur dépendent toutefois d'interactions complexes qui sont régulées par (i) le niveau d'expression des PPARs, des RXRs et d'autres récepteurs nucléaires entrant en compétition pour la liaison à l'ADN et l'association avec RXR, (ii) la disponibilité et la nature de ligands de PPAR et de RXR, (iii) les niveaux d'expression et la nature des différents coactivateurs et corépresseurs et (iv) la séquence et le marquage épigénétique des promoteurs. La compréhension des mécanismes qui permettent d'intégrer ces aspects pour assurer une régulation fine de l'activité transcriptionnelle est un défi qu'il est nécessaire de relever pour comprendre la spécificité des fonctions physiologiques régulées par les PPARs. Ce travail concerne l'étude des mécanismes d'action moléculaire des PPARs et vise à mieux comprendre comment les interactions du récepteur avec d'autres protéines ainsi que la mobilité de ce dernier régulent son activité transcriptionnelle dans le contexte physiologique des cellules vivantes. De telles observations reposent sur l'emploi de protéines fusionnées à des protéines fluorescentes ainsi que sur le développement et l'utilisation de techniques d'imagerie complémentaires telles que le FRAP (Fluorescence Recovery After Photobleaching), le FRET (Fluorescence Resonance Energy Transfer) ou la FCS (Fluorescence Corrélation Spectroscopy). En appliquant ces méthodes, nous avons pu montrer que les PPARs résident toujours dans le noyau où ils sont associés de manière constitutive à RXR, mais que l'ajout de ligand n'induit pas la formation de structures sub-nucléaires comme cela a pu être décrit pour d'autres récepteurs nucléaires. De plus, les PPARs sont engagés dans de larges complexes protéiques de cofacteurs en absence de ligand, ce qui procure une explication moléculaire à leur activité ligand-indépendante. La liaison du ligand réduit la vitesse de diffusion du récepteur en induisant le recrutement de coactivateurs qui augmente encore plus la taille des complexes afin d'acquérir un potentiel d'activation maximal. En utilisant ces approches moléculaires, nous avons pu caractériser les mécanismes permettant aux phtalates, une classe de polluants provenant de l'industrie plastique, d'interférer avec PPARγ. La liaison du mono-ethyl-hexyl-phtalate (NERF) à PPARγ induit un recrutement sélectif de cofacteurs, se traduisant par l'induction spécifique d'un sous-ensemble de gènes qui varie en fonction du niveau de différentiation cellulaire. La modulation sélective de PPARγ par le MEHP provoque une adipogenèse modérée dans des modèles cellulaires alors que l'exposition de modèles animaux aux phtalates induit des effets bénéfiques sur la tolérance au glucose et sur le développement de l'obésité. Toutefois, les phtalates ont une action complexe sur le métabolisme glucido-lipidique en faisant intervenir PPARγ mais aussi probablement PPARα et PPARß. Cette démonstration moléculaire et physiologique de l'interférence des polluants avec les récepteurs nucléaires PPAR souligne un rôle important de l'exposition à de tels composés dans les régulations métaboliques.