Vertical Differentiation and Entry Deterrence: A Reconsideration

In this work we emphasize why market coverage should be considered endogenous for a correct analysis of entry deterrence in vertical differentiation models and discuss the implications of this endogeneity for that analysis. We consider contexts without quality costs and also contexts with convex fixed quality costs.

Diferenciação vertical em um modelo de hotelling com firmas heterogêneas

O trabalho apresenta um modelo de competição duopolista, com firmas heterogêneas (custos marginais diferentes), produtos espacialmente diferenciados quanto a dimensão vertical e horizontal, e informação privada sobre as preferências por qualidade dos consumidores. Identifica-se que a assimetria de informação sobre a dimensão vertical e a diferença de custos exercem grande relevância sobre a decisão de apreçamento das firmas e sobre as estruturas de mercado de equilíbrio. Um resultado relevante decorrente desses dois aspectos é a existência de uma massa de consumidores que, em equilíbrio, pode demandar de qualquer uma das firmas, sendo essa decisão pautada sobre o real parâmetro de preferência por qualidade de cada consumidor. Observa-se também que quanto maior a heterogeneidade dos custos, maior é o poder de mercado da firma de menor custo.

The European Union as a System of Differentiated Integration: Interdependence, Politicization and Differentiation. IHS Political Science Series No. 137, 10 July 2014

This paper conceptualizes the European Union (EU) as a system of differentiated integration characterized by both variation in levels of centralization (vertical differentiation) and variation in territorial extension (horizontal differentiation) across policy areas. Differentiation has been a concomitant of deepening and widening and has increased and consolidated as the EU’s powers, policy scope, and membership have grown. Turning to explanation, the paper attributes the pattern of differentiated integration in the EU to the interaction of interdependence and politicization. Differentiation among the member states (internal differentiation) results from supranational integration under conditions of high interdependence and politicization. By contrast, external differentiation (the selective policy integration of non-member states) occurs in highly interdependent but weakly politicized policy areas. These constellations are illustrated in case studies of differentiation in the internal market, monetary union, and defence.

Production externalities : cooperative and non-cooperative approaches

Thèse numérisée par la Division de la gestion de documents et des archives de l'Université de Montréal

Essais sur les logiciels libres : licences doubles, effets de réseau, et concurrence

This thesis examines the microeconomic consequences of the arrival of open source in the software market. Specifically, it analyzes three features of open source software by using specific models of industrial organization. Open source software is free, and may be modified or duplicated by anyone. The first paper studies the entry of an open source software in a closed source software market. Using a model of horizontal differentiation, the analysis considers a closed source firm's investment in the quality of its software. The introduction of open source on the market reduces the firm's investment in quality and increases the price of its software. Moreover, the entry of open source software may reduce consumer welfare. Post-entry by an open source software, the reduction in market share lowers the firm's incentive to invest in quality. The second paper features vertical differentiation to study a monopolist selling supporting product to its software. The study begins by contrasting the supply of support by an open source provider and a closed source vendor. The model shows that in both cases the levels of support offered are the same. In addition, consumer welfare is higher and profit lower under an open source software. Then, the paper considers the competition in the provision of support. Here, the supply of high level support is greater than under a monopolist. Finally, the monopolist adopts a dual licensing strategy to extract more surplus from developers interested in modifying open source software and redistributing the resulting product. This technique, when the developers place high value on the source code, generates more profit if the monopolist chooses to publish as open source rather than closed source. The last paper studies how a closed source firm is affected by the introduction of an open source benefiting from contributions by users. A vertical differentiation model is used, and reveals that, when contribution of users is present, the closed source vendor may lower its price to a level where it forces the open source out of the market. The firm's lower price not only increases demand for its software, but also induces consumers into switching from open to closed source software therefore reducing the contribution of users.

Market effects of changes in consumers' social responsibility

In a duopoly model of vertical differentiation, we study market equilibrium and the resulting social welfare following an increase in the consumer's willingness to pay (WTP) for products sold by socially responsible manufacturers. Different types of such changes emerge depending on their effects on consumer heterogeneity. We show that, in most cases, increases in the consumers' social consciousness yield higher profits to socially responsible firms and may lead to higher levels of social welfare, provided that the market structure is left unchanged. However, when an increase in the consumer's social consciousness changes the market structure, welfare may fall, while the duopolists' profits rise. The resulting tension between private and social interest calls for a cautious attitude toward information campaigns aimed at increasing the consumer's social consciousness.

Essays on household taxation and competition between heterogeneous firms

Essa tese é constituída por três artigos: "Tax Filing Choices for the Household", "Optimal Tax for the Household: Collective and Unitary Approaches" e "Vertical Differentiation and Heterogeneous Firms".

From Plinthic Acrisols to Plinthosols and Gleysols: iron and groundwater dynamics in the tertiary sediments of the upper Amazon basin

Topography has been reported to be the major factor ruling the spatial distribution of Acrisols, Plinthosols and Gleysols on the seasonally flooded, low elevation plateaux of the upper Amazon basin occupied by Tertiary (Ica & Solimoes) sediments. In this study, detailed morphological and mineralogical investigations conducted in a representative 25-ha site were combined with hydro-geochemical data to relate the vertical and lateral soil differentiations observed to the hydro-geological history of that part of the basin. As a result of the uplift of the Andes, several cuts in the extensive Tertiary marshlands have formed, at first, slightly incised plateaux of low elevation. There, weathering under hot and humid climates would have generated a reddish, freely drained and bioturbated topsoil layer and the vertical differentiation in subsoil sediments of a plinthite over an iron-depleted mottled clay. The second episode of soil differentiation is linked to the replacement of the forest by a savannah under the drier climates of the late Pleistocene, which favours surface runoff and the infill of the incisions by fine particles. This infill, combined with the return to the present humid climate, has then enabled the local groundwater to rise on the plateaux and to generate episaturation at the topsoil/subsoil transition close to the depressions. Nowadays, ferrous iron is released from the partly iron-depleted topsoil weathering front at high water levels during the rainy seasons. It moves from footslope to low-lying positions and from top to bottom in the soil profile according to the groundwater dynamics. The present general trend is thus to the lateral export of iron at high water levels due to subsurface and overland flows, its vertical transfer during the recession of the groundwater and accumulation in a nodular plinthite. In the latter, ferrous iron is adsorbed onto its softest iron masses where it feeds the neoformation of ferrihydrite that rapidly dehydrates into haematite.

Non-Linear Pricing in Imperfectly Competitive Markets

This thesis is dedicated to the analysis of non-linear pricing in oligopoly. Non-linear pricing is a fairly predominant practice in most real markets, mostly characterized by some amount of competition. The sophistication of pricing practices has increased in the latest decades due to the technological advances that have allowed companies to gather more and more data on consumers preferences. The first essay of the thesis highlights the main characteristics of oligopolistic non-linear pricing. Non-linear pricing is a special case of price discrimination. The theory of price discrimination has to be modified in presence of oligopoly: in particular, a crucial role is played by the competitive externality that implies that product differentiation is closely related to the possibility of discriminating. The essay reviews the theory of competitive non-linear pricing by starting from its foundations, mechanism design under common agency. The different approaches to model non-linear pricing are then reviewed. In particular, the difference between price and quantity competition is highlighted. Finally, the close link between non-linear pricing and the recent developments in the theory of vertical differentiation is explored. The second essay shows how the effects of non-linear pricing are determined by the relationship between the demand and the technological structure of the market. The chapter focuses on a model in which firms supply a homogeneous product in two different sizes. Information about consumers' reservation prices is incomplete and the production technology is characterized by size economies. The model provides insights on the size of the products that one finds in the market. Four equilibrium regions are identified depending on the relative intensity of size economies with respect to consumers' evaluation of the good. Regions for which the product is supplied in a single unit or in several different sizes or in only a very large one. Both the private and social desirability of non-linear pricing varies across different equilibrium regions. The third essay considers the broadband internet market. Non discriminatory issues seem the core of the recent debate on the opportunity or not of regulating the internet. One of the main questions posed is whether the telecom companies, owning the networks constituting the internet, should be allowed to offer quality-contingent contracts to content providers. The aim of this essay is to analyze the issue through a stylized two-sided market model of the web that highlights the effects of such a discrimination over quality, prices and participation to the internet of providers and final users. An overall welfare comparison is proposed, concluding that the final effects of regulation crucially depend on both the technology and preferences of agents.

Bundling Strategies When Products Are Vertically Differentiated and Capacities Are Limited

We consider a seller who owns two capacity-constrained resources and markets two products (components) corresponding to these resources as well as a bundle comprising the two components. In an environment where all customers agree that one of the two components is of higher quality than the other and that the bundle is of the highest quality, we derive the seller's optimal bundling strategy. We demonstrate that the optimal solution depends on the absolute and relative availabilities of the two resources as well as upon the extent of subadditivity of the quality of the products. The possible strategies that can arise as equilibrium behavior include a pure components strategy, a partial- or full-spectrum mixed bundling strategy, and a pure bundling strategy, where the latter strategy is optimal when capacities are unconstrained. These conclusions are contrary to findings in the prior literature on bundling that demonstrated the unambiguous dominance of the full-spectrum mixed bundling strategy. Thus, our work expands the frontier of bundling to an environment with vertically differentiated components and limited resources. We also explore how the bundling strategies change as we introduce an element of horizontal differentiation wherein different types of customers value the available components differently.

Emissions Control and the Regulation of Product Markets: The Case of Automobiles

The paper investigates alternative policies to regulate emissions from polluting product markets, specifically considering the case of the automobiles market. The two policies we consider are: a quota that limits the quantity produced of the polluting model and a more flexible average efficiency standard that requires a minimum energy efficiency across all models produced by a firm, similar to the US Corporate Average Fuel Economy (CAFE) standards. We use a duopoly model of vertical differentiation where firms produce both an economy (i.e., low polluting) version and a luxury (i.e., high polluting) version of a given product. We show that while a quota can raise firm profit over a certain range, CAFE always reduces firm profit relative to the pre-regulation. We also show that while the quota reduces emissions, it is possible that emissions increase under CAFE. The optimal policy choice will depend on the magnitude of unit damages. We show that when unit damages are sufficiently high, the quota policy is more efficient than the average efficiency standard. This suggests that instead of tightening CAFE to limit damages from emissions, policy makers can shift to a quota policy which is both welfare enhancing and more profitable for firms.

(Table 1) Clay mineralogy at DSDP Sites 86-576 and 86-578

Late Cretaceous and Cenozoic sediments deposited on the eastern and western sides of the Shatsky Rise show similar clay assemblages of chlorite, illite, mixed layers, smectite, kaolinite, and palygorskite, and a similar vertical differentiation into three units. The deep-sea pelagic red clay is dominated by terrigenous components, which suggests that diagenesis is minor in this part of the western North Pacific and that eolian supply is very important. The role of the Shatsky Rise as a submarine barrier is of minor importance. The volcanic contribution to the clay component appears very small, as in some other parts of the Pacific Ocean. Stratigraphic correlations between Sites 576 and 578, which can be made from mineralogical data, partly offset the rareness of biostratigraphic markers.

Facultad por Facultad. Origen familiar y empleo de los licenciados en CCSS y Humanidades de la UCM en el año 2003

Muchos estudios encuentran un efecto del origen social sobre la ocupación y el salario incluso tras controlar la educación. Este efecto, que suele ser pequeño, puede ser un artificio resultante del deficiente control de la educación. Este trabajo examina la importancia de controlar en detalle la educación desagregando las carreras universitarias. Estudiamos el clasismo del mercado de trabajo para una promoción de titulados en Ciencias Sociales y Humanidades de la Universidad Complutense de Madrid (UCM) en los seis años entre su graduación en 1997 y 2003. Esta es la fecha de la encuesta gracias a la cual podemos medir la influencia del status social de los padres sobre las oportunidades de empleo de los hijos no con título universitario en general, sino con el mismo título universitario. Encontramos que la influencia del origen social sobre la clase profesional y los ingresos disminuye mucho cuando se controlan las titulaciones, y que no se observa en la mayor parte de ellas, pero sí en algunas, en concreto Políticas y Sociología y Económicas. Esta concreción allana el camino para investigar las vías por las que esta influencia se produce.

Strategic interactions of urban land developers in the housing market

This thesis studies the supply side of the housing market taking into account the strategic interactions that occur between urban land developers. The thesis starts by reviewing the literature on new housing supply, concluding that there are very few studies where strategic interactions are taken into account. Next, we develop a model with two urban land developers, who rst decide the quality of housing and then compete in prices, considering that the marginal production costs depend on the housing quality. First, we analyze the price competition game and characterize the Nash equilibrium of the price game. Finally, we examine the rst stage of the game and determine numerically the subgame perfect Nash equilibrium (SPNE) of the quality-price game. In the price competition game, our results show that the equilibrium price of an urban land developer is an increasing function of its own quality, while it is a non-monotonic function of the rival s quality. The behavior of the equilibrium pro ts reveals that, in general, urban land developers gain by di¤erentiating their quality. However, the urban land developer located at the Central Business District (CBD), may prefer to have the same quality than the rival when transportation costs are high by exploiting its locational advantage. The analysis of the rst stage of the game also reveals that, in general, the rms best response is to di¤erentiate their quality and that, in most cases, there are two subgame perfect Nash equilibria that involve quality di¤erentiation. However, the results depend on transportation costs and the quality valuation parameter. For small quality valuations, in equilibrium, the market is not fully covered and, if the unit transportation costs are high, only the urban land developers located at the CBD operates. For higher quality valuations, all the consumers are served. Furthermore, the equilibrium qualities and pro ts are increasing with quality valuation parameter. RESUMO: Esta tese estuda a oferta no mercado da habitação, tendo em conta as interações es- tratégicas que ocorrem entre os produtores de habitação. A tese revê a literatura sobre a oferta de habitação, concluindo que existem poucos estudos que tenham tido em conta as interações estratégicas. De seguida, desenvolvemos um modelo com dois produtores de habitação, que primeiro decidem a qualidade da habitação e depois competem em preços, considerando que os custos marginais de produção dependem da qualidade. Primeiro analisamos o jogo em preços e caracterizamos o equilíbrio de Nash. Posteriormente, ex- aminamos o primeiro estágio do jogo e determinamos numericamente o equilíbrio perfeito em todos os subjogos (SPNE) do jogo. No jogo de competição em preços, os resultados mostram que, o preço de equilíbrio, é uma função crescente da qualidade da habitação, sendo uma função não monótona da qualidade do rival. O lucro de equilíbrio revela que, geralmente, os produtores de habitação têm ganhos em diferenciar a qualidade. No entanto, o produtor localizado no Centro (CBD), pode preferir oferecer a mesma qualidade que o rival, caso os custos unitários de transporte sejam elevados, através da sua vantagem de localização. A análise do primeiro estágio do jogo, revela que, geralmente, a melhor resposta de um produtor é a de diferenciar a qualidade. Na maior parte dos casos existem dois SPNE que envolvem essa diferenciação. No entanto, os resultados dependem dos custos unitários de transporte e da valorização da qualidade por parte do consumidor. Para uma reduzida valorização da qualidade, em equilíbrio, o mercado não é totalmente coberto e, se o custo unitário de transporte é elevado, apenas o produtor localizado no CBD opera no mercado. Para uma valorização elevada da qualidade, todos os consumidores são servidos. Além disso, as qualidades e os lucros de equilíbrio são crescentes com a valorização da qualidade.

Predicamento de seguridad yemení

Con el inicio del periodo Post-Guerra Fría el Sistema Internacional comienza a experimentar un incremento en el fortalecimiento de su componente social; la Sociedad de Estados alcanza un mayor nivel de homogenización, el estado, unidad predominante de esta, comienzan atravesar una serie de transformaciones que obedecerán a una serie de cambios y continuidades respecto al periodo anterior. Desde la perspectiva del Realismo Subalterno de las Relaciones Internacionales se destacan el proceso de construcción de estado e inserción al sistema como las variables que determinan el sentimiento de inseguridad experimentado por las elites estatales del Tercer Mundo; procesos que en el contexto de un nuevo y turbulento periodo en el sistema, tomara algunas características particulares que darán un sentido especifico al sentimiento de inseguridad y las acciones a través de las cuales las elites buscan disminuirlo. La dimensión externa del sentimiento de inseguridad, el nuevo papel que toma la resistencia popular como factor determinante del sentimiento de inseguridad y de la cooperación, así como del conflicto, entre los miembros de la Sociedad Internacional, la inserción como promotor de estrategias de construcción de Estado, son alguno de los temas puntuales, que desde la perspectiva subalterna, parecen salir a flote tras el análisis del sistema en lo que se ha considerado como el periodo Post-Guerra Fría. En este sentido Yemen, se muestra como un caso adecuado no solo para poner a prueba las postulados de la teoría subalterna, veinte años después de su obra más prominente (The third world security Predicament), escrita por M. Ayoob, sino como un caso pertinente que permite acercarse más a la comprensión del papel del Tercer Mundo al interior de la Sociedad Internacional de Estados.