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.

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.

Possible competitive displacement of planorbids by Melanoides tuberculata in Minas Gerais, Brazil

Several species of snails, including Pomacea haustrum, Marisa cornuarietis and Helisoma duryi, have been identified as probable competitors and/or predators of planorbid intermediate hosts of Schistosoma. During the last few years, studies carried out in the Caribbean region have shown reductions and even disappearances of populations of Biomphalaria glabrata and B. straminea in breeding places where the snail Melanoides tuberculata was introduced. Observations made over a period of 10 years in two lakes close to Belo Horizonte, MG, showed that there were marked reductions in autochthonous populations of B. glabrata and B. straminea after the arrival of M. tuberculata, both Biomphalaria species disappearing completely after eight years.

8-Methoxy-naphtho[2,3-b]thiophen-4,9-quinone, a non-competitive inhibitor of trypanothione reductase

The enzyme trypanothione reductase is a recognised drug target in trypanosomatids and has been used in the search of new compounds with potential activity against diseases such as leishmaniasis, Chagas disease and African trypanosomiasis. 8-Methoxy-naphtho [2,3-b] thiophen-4,9-quinone was selected in a screening of natural and synthetic compounds using an in vitro assay with the recombinant enzyme from Trypanosoma cruzi. Its mode of inhibition fits a non-competitive model with respect to the substrate (trypanothione) and to the co-factor (NADPH), with Ki-values of 5 and 3.6 µM, respectively. When tested against human glutathione reductase, this compound did not display any significant inhibition at 100 µM, indicating a good selectivity against the parasite enzyme.

Fab antibodies capable of blocking T cells by competitive binding have the identical specificity but a higher affinity to the MHC-peptide-complex than the T cell receptor.

In transplant rejection, graft versus host or autoimmune diseases T cells are mediating the pathophysiological processes. Compared to unspecific pharmacological immune suppression specific inhibition of those T cells, that are involved in the disease, would be an alternative and attractive approach. T cells are activated after their T cell receptor (TCR) recognizes an antigenic peptide displayed by the Major Histocompatibility Complex (MHC). Molecules that interact with MHC-peptide-complexes in a specific fashion should block T cells with identical specificity. Using the model of the SSX2 (103-111)/HLA-A*0201 complex we investigated a panel of MHC-peptide-specific Fab antibodies for their capacity blocking specific T cell clones. Like TCRs all Fab antibodies reacted with the MHC complex only when the SSX2 (103-111) peptide was displayed. By introducing single amino acid mutations in the HLA-A*0201 heavy chain we identified the K66 residue as the most critical binding similar to that of TCRs. However, some Fab antibodies did not inhibit the reactivity of a specific T cell clone against peptide pulsed, artificial targets, nor cells displaying the peptide after endogenous processing. Measurements of binding kinetics revealed that only those Fab antibodies were capable of blocking T cells that interacted with an affinity in the nanomolar range. Fab antibodies binding like TCRs with affinities on the lower micromolar range did not inhibit T cell reactivity. These results indicate that molecules that block T cells by competitive binding with the TCR must have the same specificity but higher affinity for the MHC-peptide-complex than the TCR.

Repeated Double-Poling Sprint Training in Hypoxia by Competitive Cross-country Skiers.

PURPOSE: Repeated-sprint training in hypoxia (RSH) was recently shown to improve repeated-sprint ability (RSA) in cycling. This phenomenon is likely to reflect fiber type-dependent, compensatory vasodilation, and therefore, our hypothesis was that RSH is even more beneficial for activities involving upper body muscles, such as double poling during cross-country skiing. METHODS: In a double-blinded fashion, 17 competitive cross-country skiers performed six sessions of repeated sprints (each consisting of four sets of five 10-s sprints, with 20-s intervals of recovery) either in normoxia (RSN, 300 m; FiO2, 20.9%; n = 8) or normobaric hypoxia (RSH, 3000 m; FiO2, 13.8 %; n = 9). Before (pre) and after (post) training, performance was evaluated with an RSA test (10-s all-out sprints-20-s recovery, until peak power output declined by 30%) and a simulated team sprint (team sprint, 3 × 3-min all-out with 3-min rest) on a double-poling ergometer. Triceps brachii oxygenation was measured by near-infrared spectroscopy. RESULTS: From pretraining to posttraining, peak power output in the RSA was increased (P < 0.01) to the same extent (29% ± 13% vs 26% ± 18%, nonsignificant) in RSH and in RSN whereas the number of sprints performed was enhanced in RSH (10.9 ± 5.2 vs 17.1 ± 6.8, P < 0.01) but not in RSN (11.6 ± 5.3 vs 11.7 ± 4.3, nonsignificant). In addition, the amplitude in total hemoglobin variations during sprints throughout RSA rose more in RSH (P < 0.01). Similarly, the average power output during all team sprints improved by 11% ± 9% in RSH and 15% ± 7% in RSN. CONCLUSIONS: Our findings reveal greater improvement in the performance of repeated double-poling sprints, together with larger variations in the perfusion of upper body muscles in RSH compared with those in RSN.

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.

Antitumor activities of ATP-competitive inhibitors of mTOR in colon cancer cells.

BACKGROUND: The mammalian target of rapamycin (mTOR) is frequently activated in colon cancers due to mutations in the phosphatidylinositol 3-kinase (PI3K) pathway. Targeting mTOR with allosteric inhibitors of mTOR such as rapamycin reduces colon cancer progression in several experimental models. Recently, a new class of mTOR inhibitors that act as ATP-competitive inhibitors of mTOR, has been developed. The effectiveness of these drugs in colon cancer cells has however not been fully characterized. METHODS: LS174T, SW480 and DLD-1 colon cancer cell lines were treated with PP242 an ATP-competitive inhibitor of mTOR, NVP-BEZ235, a dual PI3K/mTOR inhibitor or rapamycin. Tumor cell growth, proliferation and survival were assessed by MTS assay, 5-bromo-2'-deoxyuridine (BrDU) incorporation or by quantification of DNA fragmentation respectively. In vivo, the anticancer activity of mTOR inhibitors was evaluated on nude mice bearing colon cancer xenografts. RESULTS: PP242 and NVP-BEZ235 reduced the growth, proliferation and survival of LS174T and DLD-1 colon cancer cells more efficiently than rapamycin. Similarly, PP242 and NVP-BEZ235 also decreased significantly the proliferation and survival of SW480 cells which were resistant to the effects of rapamycin. In vivo, PP242 and NVP-BEZ235 reduced the growth of xenografts generated from LS174T and SW480 cells. Finally, we also observed that the efficacy of ATP-competitive inhibitors of mTOR was enhanced by U0126, a MEK inhibitor. CONCLUSIONS: Taken together, these results show that ATP-competitive inhibitors of mTOR are effective in blocking colon cancer cell growth in vitro and in vivo and thus represent a therapeutic option in colon cancer either alone or in combination with MEK inhibitors.

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.

Testosterone: a specific competitive antagonist of aldosterone in the toad bladder.

Testosterone (100 nM to 40 microM) antagonized the effect of aldosterone (10 nM) on Na+ transport in the toad bladder measured in vitro as short-circuit current (SCC). Half-maximal inhibition occurred at an antagonist-agonist molar ratio of 150:1. The antagonist action of testosterone was reversed by addition of more aldosterone. The antagonism was specific in the sense that testosterone (20 microM) did not inhibit the response of the SCC to oxytocin (50 mU/ml). By itself, testosterone (up to 20 microM) had no agonist activity on base-line SCC. Finally, testosterone (500 nM to 20 microM) specifically displaced [3H]aldosterone (5 nm) from its cytoplasmic and nuclear binding sites in bladders incubated in vitro at 25 or 0 degrees C and labeled at steady state. There was a significant linear correlation between the effect of testosterone on the aldosterone-dependent SCC and its effect on [3H]aldosterone binding sites in the cytoplasm and in the nucleus. We conclude that 1) testosterone is a specific competitive antagonist of aldosterone, and 2) [3H]aldosterone nuclear and cytoplasmic binding sites could be mineralocorticoid receptors, mediating the action of aldosterone on Na+ transport.

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.

On Rothschild-Stiglitz as competitive pooling

Dubey and Geanakoplos [2002] have developed a theory of competitive pooling, which incorporates adverse selection and signaling into general equilibrium. By recasting the Rothschild-Stiglitz model of insurance in this framework, they find that a separating equilibrium always exists and is unique.We prove that their uniqueness result is not a consequence of the framework, but rather of their definition of refined equilibria. When other types of perturbations are used, the model allows for many pooling allocations to be supported as such: in particular, this is the case for pooling allocations that Pareto dominate the separating equilibrium.