Recontracting and competition

We characterize the set of Walrasian allocations of an economy as theset of allocations which can be supported by abstract equilibria that satisfy a recontracting condition which reflects the idea that agents can freely trade with each other. An alternative (and weaker) recontracting condition characterizesthe core. The results are extended to production economies by extending thedefinition of the recontracting condition to include the possibility of agentsto recontract with firms. However, no optimization requirement is imposed onfirms. In pure exchange economies, an abstract equilibrium is a feasible allocation and a list of choice sets, one for each agent, that satisfy thefollowing conditions: an agent's choice set is a subset of the commodity space that includes his endowment; and each agent's equilibrium bundle isa maximal element in his choice set, with respect to his preferences. Therecontracting condition requires that any agent can buy bundles from any other agent's choice set by offering the other agent a bundle he prefers tohis equilibrium bundle.

An agenda-setting model of electoral competition

This paper presents a model of electoral competition focusing on the formation of thepublic agenda. An incumbent government and a challenger party in opposition competein elections by choosing the issues that will key out their campaigns. Giving salience toan issue implies proposing an innovative policy proposal, alternative to the status-quo.Parties trade off the issues with high salience in voters concerns and those with broadagreement on some alternative policy proposal. Each party expects a higher probabilityof victory if the issue it chooses becomes salient in the voters decision. But remarkably,the issues which are considered the most important ones by a majority of votes may notbe given salience during the electoral campaign. An incumbent government may survivein spite of its bad policy performance if there is no sufficiently broad agreement on apolicy alternative. We illustrate the analytical potential of the model with the case of theUnited States presidential election in 2004.

Nature, evolution and characterisation of rhizospheric chemical exudates affecting root herbivores

Similar to aboveground herbivores, root-feeding insects must locate and identify suitable resources. In the darkness of soil, they mainly rely on root chemical exudations and, therefore, have evolved specific behaviours. Because of their impact on crop yield, most of our knowledge in belowground chemical ecology is biased towards soil-dwelling insect pests. Yet the increasing literature on volatile-mediated interactions in the ground underpins the great importance of chemical signalling in this ecosystem and its potential in pest control. Here, we explore the ecology and physiology of these chemically based interactions. An evolutionary approach reveals interesting patterns in the response of insects to particular classes of volatile or water-soluble organic compounds commonly emitted by roots. Food web analyses reasonably support that volatiles are used as long-range cues whereas water-soluble molecules serve in host acceptance/rejection by the insect; however, data are still scarce. As a case study, the chemical ecology of Diabrotica virgifera virgifera is discussed and applications of belowground signalling in pest management are examined. Soil chemical ecology is an expanding field of research and will certainly be a hub of our understanding of soil communities and subsequently of the management of belowground ecosystem services.

Dynamic price competition with fixed capacities

Many revenue management (RM) industries are characterized by (a) fixed capacities in theshort term (e.g., hotel rooms, seats on an airline flight), (b) homogeneous products (e.g., twoairline flights between the same cities at similar times), and (c) customer purchasing decisionslargely influenced by price. Competition in these industries is also very high even with just twoor three direct competitors in a market. However, RM competition is not well understood andpractically all known implementations of RM software and most published models of RM donot explicitly model competition. For this reason, there has been considerable recent interestand research activity to understand RM competition. In this paper we study price competitionfor an oligopoly in a dynamic setting, where each of the sellers has a fixed number of unitsavailable for sale over a fixed number of periods. Demand is stochastic, and depending on howit evolves, sellers may change their prices at any time. This reflects the fact that firms constantly,and almost costlessly, change their prices (alternately, allocations at a price in quantity-basedRM), reacting either to updates in their estimates of market demand, competitor prices, orinventory levels. We first prove existence of a unique subgame-perfect equilibrium for a duopoly.In equilibrium, in each state sellers engage in Bertrand competition, so that the seller withthe lowest reservation value ends up selling a unit at a price that is equal to the equilibriumreservation value of the competitor. This structure hence extends the marginal-value conceptof bid-price control, used in many RM implementations, to a competitive model. In addition,we show that the seller with the lowest capacity sells all its units first. Furthermore, we extendthe results transparently to n firms and perform a number of numerical comparative staticsexploiting the uniqueness of the subgame-perfect equilibrium.

Weights in the balance: jasmonic acid and salicylic acid signaling in root-biotroph interactions.

Work on the interaction of aerial plant parts with pathogens has identified the signaling molecules jasmonic acid (JA) and salicylic acid (SA) as important players in induced defense of the plant against invading organisms. Much less is known about the role of JA and SA signaling in root infection. Recent progress has been made in research on plant interactions with biotrophic mutualists and parasites that exclusively associate with roots, namely arbuscular mycorrhizal and rhizobial symbioses on one hand and nematode and parasitic plant interactions on the other hand. Here, we review these recent advances relating JA and SA signaling to specific stages of root colonization and discuss how both signaling molecules contribute to a balance between compatibility and defense in mutualistic as well as parasitic biotroph-root interactions.

Competition, innovation and growth with limited commitment

We study how barriers to business start-up affect the investment in knowledge capital when contracts are not enforceable. Barriers to business start-up lower the competition for knowledge capital and, in absence of commitment, reduce the incentive to accumulate knowledge. As a result, countries with large barriers experience lower income and growth. Our results are consistent with cross-country evidence showing that the cost of business start-up is negatively correlated with the level and growth of income.

Regulation of the expression of Fit insect toxin locus genes in the root-associated biocontrol pseudomonad CHA0

The root-colonizing Pseudomonas fluorescens strain CHA0 is a biocontrol agent of soil-borne plant diseases caused by fungal and oomycete pathogens. Remarkably, this plant-beneficial pseudomonad is also endowed with potent insecticidal activity that depends on the production of a large protein toxin termed Fit (for P. fluorescens insecticidal toxin). In our present work, the genomic locus encoding the P. fluorescens insect toxin is subjected to a detailed molecular analysis. The Fit toxin gene fitD is flanked upstream by the fitABC genes and downstream by the fitE gene that encode the ABC transporter, membrane fusion, and outer membrane efflux components of a type I protein secretion system predicted to function in toxin export. The fitF, fitG, and fitH genes located downstream of fitE code for regulatory proteins having domain structures typical of signal transduction histidine kinases, LysR-type transcriptional regulators, and response regulators, respectively. The role of these insect toxin locus-associated control elements is being investigated with mutants defective for the regulatory genes and with GFP-based reporter fusions to putative promoter regions upstream of the transporter genes fitA and fitE, the toxin gene fitD, and the regulatory genes fitF and fitH. Our preliminary findings suggest that the three regulators interact with known global regulators of biocontrol factor expression to control Fit toxin expression and secretion.

Genomics of secondary metabolite production by Pseudomonas fluorescens Pf-5

The complete sequence of the 7.07 Mb genome of the biological control agent Pseudomonas fluorescens Pf-5 is now available, providing a new opportunity to advance knowledge of biological control through genomics. P. fluorescens Pf-5 is a rhizosphere bacterium that suppresses seedling emergence diseases and produces a spectrum of antibiotics toxic to plant-pathogenic fungi and oomycetes. In addition to six known secondary metabolites produced by Pf-5, three novel secondary metabolite biosynthesis gene clusters identified in the genome could also contribute to biological control. The genomic sequence provides numerous clues as to mechanisms used by the bacterium to survive in the spermosphere and rhizosphere. These features include broad catabolic and transport capabilities for utilizing seed and root exudates, an expanded collection of efflux systems for defense against environmental stress and microbial competition, and the presence of 45 outer membrane receptors that should allow for the uptake of iron from a wide array of siderophores produced by soil microorganisms. As expected for a bacterium with a large genome that lives in a rapidly changing environment, Pf-5 has an extensive collection of regulatory genes, only some of which have been characterized for their roles in regulation of secondary metabolite production or biological control. Consistent with its commensal lifestyle, Pf-5 appears to lack a number of virulence and pathogenicity factors found in plant pathogen.

Globalization and the provision of incentives inside the firm: The effect of foreign competition

This paper studies the effect of changes in foreign competition on the structureof compensation and incentives of U.S. executives. We measure foreign competitionas import penetration and use tariffs and exchange rates as instrumental variables toestimate its causal effect on pay. We find that higher foreign competition leads tomore incentive provision in a variety of ways. First, it increases the sensitivity of payto performance. Second, it increases whithin-firm pay differentials between executivelevels, with CEOs typically experiencing the largest wage increases, partly becausethey receive the steepest incentive contracts. Finally, higher foreign competition is alsoassociated with a higher demand for talent. These results indicate that increased foreigncompetition can explain some of the recent trends in compensation structures.

The effect of intergroup competition on group coordination: An experimental study

We report an experiment on the effect of intergroup competition on group coordination in the minimal-effort game (Van Huyck et al., 1990). The competition was between two 7-person groups. Each player in each group independently chose an integer from 1 to 7. The group with the higher minimum won the competition and each of its members was paid according to the game s original payoff matrix. Members of the losing group were paid nothing. In case of a tie, each player was paid half the payoff in the original matrix. This treatment was contrasted with two control treatments where each of the two groups played an independent coordination game, either with or without information about the minimum chosen by the outgroup. Although the intergroup competition does not change the set of strict equilibria, we found that it improved collective rationality by moving group members in the direction of higher-payoff equilibria. Merely providing group members with information about the minimal-effort level in the other group was not sufficient to generate this effect.

Managing competition in professional services and the burden of inertia

Professional services require certain organizational patterns in order to avoid information asymmetries and external effects. These same patterns are used within production structures involving various degrees of monopoly. However, competitive restraints are justified today only when substantial external effects are clearly present, whereas information asymmetries hardly justify such restraints because reputational investments have become widespread in the economy and are relatively efficient in overcoming such asymmetries. As a consequence, innovation in the production of externalities can make competitive constraints unnecessary.