A theoretical model is proposed to disentangle the contribution of brand quality and retailer service quality in explaining brand price dierentials across retailers. Two testable hypotheses emerge: i) for each brand type, price dierences... more
A theoretical model is proposed to disentangle the contribution of brand quality and retailer service quality in explaining brand price dierentials across retailers. Two testable hypotheses emerge: i) for each brand type, price dierences across retailers are independent of brand quality dierentials, and ii) at a given retailer, price dierences between dierent brand qualities are independent of service quality dierentials. Our empirical analysis, for a sample of UK grocery retailer prices, discloses that retailers that oer higher service quality sell same quality brands at higher prices. In particular, service quality premia amount to 6% for national brands and are in the range of 9-15% for low-quality store brands. Besides, at a given retailer, the price premia paid for the national brand are very large: around 150% between national brands and low-quality store brands, and around 40% between national brands and high-quality store brands. Also, the price dierential between the nation...
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Innovation is a general measure of the success of a company and shows a positive relationship with several key factors such as collaboration with universities and technology centers or belonging to medium- and high-tech sectors. While... more
Innovation is a general measure of the success of a company and shows a positive relationship with several key factors such as collaboration with universities and technology centers or belonging to medium- and high-tech sectors. While many studies have found that gender diversity in company management teams has a positive influence on companies’ economic success, few have focused on the impact that the inclusion of women in the board of directors has on product, process, and organizational innovation. This paper builds on previous knowledge about the determinants of innovations and shows that greater gender management team diversity, compared to male-only teams, positively affects the achievement of said innovations. However, these results change when we incorporate the size of the companies as a moderating variable. In this case, we identify a turning point corresponding to firm size in the impact of gender diversity on product and process innovations, but not for innovations in or...
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This paper analyzes the impact of local and global interactions on individuals' action choices. Players are located in a network and interact with each other with perfect knowledge of their neighborhood and probabilistic knowledge of... more
This paper analyzes the impact of local and global interactions on individuals' action choices. Players are located in a network and interact with each other with perfect knowledge of their neighborhood and probabilistic knowledge of the complete network topology. Each player chooses an action, from some finite set, which imposes an externality on their neighbors as well as an externality on the complete network. Players deal with two opposing forces: they obtain utility from sharing their choices with their neighbors (positive local externality) but suffer disutility from sharing the same choice with all members of the network (negative global externality). Economic and social phenomena exhibiting these features are: the adoption of cost-reducing innovations, clusters of firms, time schedule choices, the adoption of subcultures and fads, among others. We find the conditions for the existence of all Bayesian Nash equilibria and translate them to a characterization in terms of t...
Action-set games are games where the set of players is
nite, every player has a
nite set of actions, and the worth of the game is a function of the actions taken by the players. In this setting a rule determines individual payo¤s for... more
Action-set games are games where the set of players is
nite, every player has a
nite set of actions, and the worth of the game is a function of the actions taken by the players. In this setting a rule determines individual payo¤s for each combination of actions. Following an axiomatic approach, we de
ne the set of Consistent Bargaining Equilibria.
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This paper analyzes oligopolistic markets in which indivisible goods are sold by multiproduct firms to a finite set of heterogeneous buyers, extending the analysis of Arribas and Urbano (2017, a) and Arribas and Urbano (2017,b). We show... more
This paper analyzes oligopolistic markets in which indivisible goods are sold by multiproduct firms to a finite set of heterogeneous buyers, extending the analysis of Arribas and Urbano (2017, a) and Arribas and Urbano (2017,b). We show the existence of efficient subgame perfect equilibrium by formulating the problem as the linear programming relaxation of the standard Package Assignment model. We prove that a set of modified versions of the dual programming problem characterizes the efficient (non-linear) equilibrium prices. We study the conditions for the existence of efficient equilibrium in terms of the consumers value functions.
The first volume of this wide-ranging Handbook contains original contributions by world-class specialists. It provides up-to-date surveys of the main game-theoretic tools commonly used to model industrial organization topics. The Handbook... more
The first volume of this wide-ranging Handbook contains original contributions by world-class specialists. It provides up-to-date surveys of the main game-theoretic tools commonly used to model industrial organization topics. The Handbook covers numerous subjects in detail including, among others, the tools of lattice programming, supermodular and aggregative games, monopolistic competition, horizontal and vertically differentiated good models, dynamic and Stackelberg games, entry games, evolutionary games with adaptive players, asymmetric information, moral hazard, learning and information sharing models.
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This paper focuses on multiproduct trading with indivisibilities and where a representative agent may have non-monotonic preferences. In this framework, the set of firms' profits (which comes from efficient subgame perfect Nash... more
This paper focuses on multiproduct trading with indivisibilities and where a representative agent may have non-monotonic preferences. In this framework, the set of firms' profits (which comes from efficient subgame perfect Nash equilibria) is the Pareto frontier of some projection of the core of the game. We show that under monotonicity efficient subgame perfect Nash equilibria are achieved by single offers and the equilibrium characterization is easy to obtain. When dealing with non-monotonic preferences the problem becomes more challenging. Then, we define a pair of primal-dual linear programming problems that fully identifies the core of the game. A set of modified versions of the dual programming problem characterizes the Pareto-optimal frontier of the core projection on firms' coordinates. Although this approach gives us the payoff-equivalence class (Strong Nash equilibria) of all the efficient subgame perfect Nash equilibria, the number of problems to be solved may be ...
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This paper analyzes the impact of local and global interactions on individuals' action choices. Players are located in a network and interact with each other with perfect knowledge of their neighborhood and probabilistic knowledge of... more
This paper analyzes the impact of local and global interactions on individuals' action choices. Players are located in a network and interact with each other with perfect knowledge of their neighborhood and probabilistic knowledge of the complete network topology. Each player chooses an action, from some finite set, which imposes an externality on their neighbors as well as an externality on the complete network. Players deal with two opposing forces: they obtain utility from sharing their choices with their neighbors (positive local externality) but suiter disutility from sharing the same choice with all members of the network (negative global externality). Economic and social phenomena exhibiting these features are: the adoption of cost-reducing innovations, clusters of firms, time schedule choices, the adoption of subcultures and fads, among others. We find the conditions for the existence of all symmetric Bayesian Nash equilibria and translate them to a characterization in t...
This paper looks into the desirability of trade liberalization for manufacturers, retailers and consumers. The analysis compares the move from the autarky situation to either one of free trade that entails a change in the distribution... more
This paper looks into the desirability of trade liberalization for manufacturers, retailers and consumers. The analysis compares the move from the autarky situation to either one of free trade that entails a change in the distribution system or not. We also examine whether the interests of manufacturers and retailers about the preferred distribution system coincide, provided trade opens. We find that market integration is beneficial to all agents only under certain conditions on the degree of market asymmetry and the degree of product differentiation. Interestingly, if integration entails a change in the distribution system, the conflict between manufacturers and retailers strengthens since only retailers prefer free trade when markets are not too asymmetric and when interbrand competition is sufficiently strong. Furthermore, consumers can be harmed by trade and, in a setting without exclusivities, one country may experience a welfare decrease. Finally, the analysis of the strategic...
ABSTRACT A theoretical model is proposed to disentangle the contribution of brand quality and retailer service quality in explaining brand price differentials across retailers. Two testable hypotheses emerge: (i) for each brand type,... more
ABSTRACT A theoretical model is proposed to disentangle the contribution of brand quality and retailer service quality in explaining brand price differentials across retailers. Two testable hypotheses emerge: (i) for each brand type, price differences across retailers are independent of brand quality differentials and (ii) at a given retailer, price differences between different brand qualities are independent of service quality differentials. Our empirical analysis, for a sample of the U.K. grocery retailer prices, discloses that retailers that offer higher service quality sell same quality brands at higher prices. In particular, service quality premia amount to 6% for national brands and are in the range of 9–15% for low-quality store brands. Besides, at a given retailer, the price premia paid for the national brand are very large: around 150% between national brands and low-quality store brands, and around 40% between national brands and high-quality store brands. Also, the price differential between the national brand and the low-quality store brand does not increase with service quality.
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We propose a non-cooperative game in order to emphasize the srategic rationale in shaping the distribution system. Compared with the received literature, we let manufacturers select which retailer(s) will market their respective brand.... more
We propose a non-cooperative game in order to emphasize the srategic rationale in shaping the distribution system. Compared with the received literature, we let manufacturers select which retailer(s) will market their respective brand. This, together with retailers possibly being multi-product dealers, enlarges the set of distribution systems. Whether manufacturers employ two retailers rather than one reflects the tradeoff between two conflicting efects, there is an output incease but more competition is established. High levels of product differentiation and not too large brand asymmetry are enough to incentive manufacturers introduce intra-band competition. However, the well-known exclusive dealing system shows up for little product differentiation and low brand asymmetry. It is worth emphasizing that, if any type of exclusivity relationship ever occurs, it is the equiibrium outcome of a non-cooperative game in which neither manufacturers nor retailers may impose any vertical clau...
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Recent advances in information and communication technologies have increased the incentives for firms to acquire information about rivals. These advances may have major implications for market entry because they make it easier for... more
Recent advances in information and communication technologies have increased the incentives for firms to acquire information about rivals. These advances may have major implications for market entry because they make it easier for potential entrants to gather valuable information about, for example, an incumbent’s cost structure. However, little theoretical research has actually analyzed this question. This paper advances the literature by extending a one-sided asymmetric information version of Milgrom and Roberts’ (1982) limit pricing model. Here, the entrant is allowed access to an intelligence system (IS) of a certain precision that generates a noisy signal on the incumbent’s cost structure. The entrant thus decides whether to enter the market based on two signals: the price charged by the incumbent and the signal sent by the IS. Crucially, for intermediate values of IS precision, the set of pooling equilibria with ex-ante profitable market entry is non-empty. Moreover, the proba...
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We analyze the effect of industrial espionage on limit-pricing models. We consider an incumbent monopolist engaged in R&D trying to reduce his cost of production and deter a potential entrant from entering the market. The R&D project may... more
We analyze the effect of industrial espionage on limit-pricing models. We consider an incumbent monopolist engaged in R&D trying to reduce his cost of production and deter a potential entrant from entering the market. The R&D project may be successful or not and its outcome is a private information of the incumbent. The entrant has an access to an Intelligence System (IS hereafter) of a certain precision that generates a noisy signal on the outcome of the R&D project, and she decides whether to enter the market based on two signals: the price charged by the incumbent and the signal sent by the IS. It is assumed that the precision of the IS is exogenous and common knowledge. Our fundamental result is that for intermediate values of the IS precision, the set of pooling equilibria is non-empty even with profitable entry and the entrant enters if the IS tells her the R&D project was not successful. Since in the classical limit- pricing models the entrant never enters in a pooling equili...
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Crowdfunding is gaining popularity as a way of financing social sustainable initiatives. We performed a controlled economic experiment in MTurk by simulating a crowdfunding platform and developed a theoretical model that rationalizes... more
Crowdfunding is gaining popularity as a way of financing social sustainable initiatives. We performed a controlled economic experiment in MTurk by simulating a crowdfunding platform and developed a theoretical model that rationalizes herding behavior. The experiment was designed to test and quantify the causal effects of revealing specific information to prospective backers: (i) the number of early contributors already financing the project and (ii) positive opinions of other backers versus those of experts. The results show that early contributions to the campaign and positive opinions of peers act as a reinforcing signal to potential backers and affect backers’ beliefs about the probability of success, increasing contributions to the campaign. Furthermore, we show that herding is rational and set expectations on when we should observe rational herding and when not. The theoretical model captures the rational herding, which may be the main information aggregation path in reward-bas...
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We examine a monopoly facing an uncertain demand and maximizing profits over a two-period horizon. Conditions are developed under which the firm will find it optimal to "experiment," or adjust initial prices or quantities away... more
We examine a monopoly facing an uncertain demand and maximizing profits over a two-period horizon. Conditions are developed under which the firm will find it optimal to "experiment," or adjust initial prices or quantities away from their myopically optimal level in order to increase the informativeness of observed market outcomes and hence increase future profits. We establish conditions under which
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This paper analyzes how leaming behaviour can modify the outcome of competition in an industry facing demand uncertainty. We consider a duopoly game where firms have imperfect information about market demand and leam through observing... more
This paper analyzes how leaming behaviour can modify the outcome of competition in an industry facing demand uncertainty. We consider a duopoly game where firms have imperfect information about market demand and leam through observing prices (Coumot competition) or sales (Bertrand) . The main body of the paper consists in showing how duopoly experimentation is affected by the type of
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This paper analyzes learning behavior in an industry facing uncertainty. We consider a duopoly game where firms have imperfect information about market demand and they learn through observing market prices. The main body of our study... more
This paper analyzes learning behavior in an industry facing uncertainty. We consider a duopoly game where firms have imperfect information about market demand and they learn through observing market prices. The main body of our study consists of showing how firms make the price a more informative signal through their experimental behavior, and how this behavior compares to its monopoly
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Page 1. Econometrica, Vol. 70, No. 5 (September, 2002), 18931927 COMPUTATIONAL COMPLEXITY AND COMMUNICATION: COORDINATION IN TWO-PLAYER GAMES By Amparo Urbano and Jose E. Vila1 The main contribution ...