Download or read book The Effect of Ambiguity on Price Dispersion in Duopoly Markets written by Zachary Dorobiala and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Price dispersion remains a persistent feature of markets for many consumer goods. Theoretically, tension between competing for informed consumers and exploiting captive consumers yields mixed strategy pricing equilibria. This paper considers the implications on pricing levels and dispersion when there is ambiguity about a firm's share of the captive consumers. Said ambiguity forces firms to make pricing decisions without specific probabilities attached to consumer buying habits. The model reveals that ambiguity aversion forces relatively small firms to price higher on average while it causes relatively large firms to price more competitively on average. An experiment provides empirical support for this result, while also showing that individual ambiguity attitudes do not matter when in a market without ambiguity. Additionally, ambiguity significantly lowers price dispersion in markets with a high fraction of informed consumers, while also increasing competition between firms. This effect is primarily driven by the firm with a larger share of captive consumers.
Download or read book Three Essays on the Role of Ambiguity in Games and Markets written by Zachary Eugene Dorobiala and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Many economic decisions are made under conditions of uncertainty, specifically decisions where the exact probabilities associated with specific outcomes are unknown. The formal study of ambiguity dates back to Ellsberg's famous thought experiment that shed light on the difference between risk (known uncertainty) and ambiguity (unknown uncertainty). His study showed that decision-makers treat betting on events with known uncertainty differently than those with unknown uncertainty. My work expands the applications of these approaches to economic activities to provide more predictive insights into behavior. Chapter 1 employs experimental methods to examine the effect of exogenous ambiguity on price dispersion and price levels in an asymmetric, two-firm market. This market contains two types of consumers- informed consumers, who purchase the good from the lowest priced firm, and uninformed consumers, who buy from the firm to whom they are brand loyal. In this market, ambiguity is exogenously placed on the share of uninformed consumers. This ambiguity about the uninformed consumer is presented to the firms as an unknown distribution over an interval of potential consumers. The behavioral results reveal empirical evidence that ambiguity affects duopoly pricing markets. Chapter 2 again relies on laboratory experiments to examine strategic ambiguity in two-person games. The three strategic games include: a modified dominant-strategy Tullock contest, a Minimum-effort Coordination game, and a classic zero-sum Rock-Paper-Scissors game. In each setting, we collected the player's beliefs about what their opponent will play and the player's actual choice within each game. Additionally, including a non-strategic setting, a three-color Ellsberg urn task, to play the role of a non-strategic analog to the Rock-Paper-Scissors game. Within these four settings, we examine and find stable ambiguity attitudes and varying perceptions of ambiguity. Chapter 3 explores global excess returns using naturally occurring international asset pricing data. We decompose the excess market return into a speculation (sentiment) and a non-speculation (risk) component. This decomposition enables us to make four main contributions to sources of risk in global equity markets. The results are borne out in regressions where we test each separately and jointly in kitchen sink regressions.
Download or read book Price Discrimination and Price Dispersion in a Duopoly written by Tommaso M. Valletti and published by . This book was released on 2003 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the problem of price discrimination in a market where consumers have heterogeneous preferences both over a horizontal parameter (brand) and a vertical one (quality). Discriminatory contracts are characterized for different market structures. It is shown that price dispersion, i.e., the observed range of prices for each class of customers, increases almost everywhere as competition is introduced in the market. The findings are discussed with reference to the U.K. mobile telecommunications market.
Download or read book Handbook of Industrial Organization written by Mark Armstrong and published by Elsevier. This book was released on 2007-10-05 with total page 943 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is Volume 3 of the Handbook of Industrial Organization series (HIO). Volumes 1 & 2 published simultaneously in 1989 and many of the chapters were widely cited and appeared on graduate reading lists. Since the first volumes published, the field of industrial organization has continued to evolve and this volume fills the gaps. While the first two volumes of HIO contain much more discussion of the theoretical literature than of the empirical literature, it was representative of the field at that time. Since then, the empirical literature has flourished, while the theoretical literature has continued to grow, and this new volume reflects that change of emphasis.Thie volume is an excellent reference and teaching supplement for industrial organization or industrial economics, the microeconomics field that focuses on business behavior and its implications for both market structures and processes, and for related public policies.*Part of the renowned Handbooks in Economics series*Chapters are contributed by some of the leading experts in their fields*A source, reference and teaching supplement for industrial organizations or industrial economists
Download or read book Oligopoly Pricing written by Xavier Vives and published by MIT Press (MA). This book was released on 1999 with total page 446 pages. Available in PDF, EPUB and Kindle. Book excerpt: Applies a modern game-theoretic approach to develop a theory of oligopoly pricing. The text relates classic contributions to the field of modern game theory and discusses basic game-theoretic tools and equilibrium, paying particular attention to developments in the theory of supermodular games.
Download or read book Microeconomic Theories of Imperfect Competition written by Jean Jaskold Gabszewicz and published by Edward Elgar Publishing. This book was released on 1999 with total page 856 pages. Available in PDF, EPUB and Kindle. Book excerpt: This collection of readings provides a broad overview of the major theoretical concepts in the field and includes papers on industry size, quantity and price competition, entry barriers, product differentiation, incomplete information and general equilibrium with imperfect competition.
Download or read book Handbook of Game Theory with Economic Applications written by R.J. Aumann and published by Elsevier. This book was released on 1992 with total page 824 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is the second of three volumes surveying the state of the art in Game Theory and its applications to many and varied fields, in particular to economics. The chapters in the present volume are contributed by outstanding authorities, and provide comprehensive coverage and precise statements of the main results in each area. The applications include empirical evidence. The following topics are covered: communication and correlated equilibria, coalitional games and coalition structures, utility and subjective probability, common knowledge, bargaining, zero-sum games, differential games, and applications of game theory to signalling, moral hazard, search, evolutionary biology, international relations, voting procedures, social choice, public economics, politics, and cost allocation. This handbook will be of interest to scholars in economics, political science, psychology, mathematics and biology. For more information on the Handbooks in Economics series, please see our home page on http://www.elsevier.nl/locate/hes
Download or read book An Evolutionary Theory of Economic Change written by Richard R. Nelson and published by Harvard University Press. This book was released on 1985-10-15 with total page 456 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book contains the most sustained and serious attack on mainstream, neoclassical economics in more than forty years. Nelson and Winter focus their critique on the basic question of how firms and industries change overtime. They marshal significant objections to the fundamental neoclassical assumptions of profit maximization and market equilibrium, which they find ineffective in the analysis of technological innovation and the dynamics of competition among firms. To replace these assumptions, they borrow from biology the concept of natural selection to construct a precise and detailed evolutionary theory of business behavior. They grant that films are motivated by profit and engage in search for ways of improving profits, but they do not consider them to be profit maximizing. Likewise, they emphasize the tendency for the more profitable firms to drive the less profitable ones out of business, but they do not focus their analysis on hypothetical states of industry equilibrium. The results of their new paradigm and analytical framework are impressive. Not only have they been able to develop more coherent and powerful models of competitive firm dynamics under conditions of growth and technological change, but their approach is compatible with findings in psychology and other social sciences. Finally, their work has important implications for welfare economics and for government policy toward industry.
Download or read book Economics Rules written by Dani Rodrik and published by Oxford University Press, USA. This book was released on 2015 with total page 268 pages. Available in PDF, EPUB and Kindle. Book excerpt: A leading economist trains a lens on his own discipline to uncover when it fails and when it works.
Download or read book Handbook of Monetary Economics written by Benjamin M. Friedman and published by . This book was released on 1990 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Wealth of Networks written by Yochai Benkler and published by Yale University Press. This book was released on 2006-01-01 with total page 532 pages. Available in PDF, EPUB and Kindle. Book excerpt: Describes how patterns of information, knowledge, and cultural production are changing. The author shows that the way information and knowledge are made available can either limit or enlarge the ways people create and express themselves. He describes the range of legal and policy choices that confront.
Download or read book Handbook of Industrial Organization written by Richard Schmalensee and published by North Holland. This book was released on 1989-09-11 with total page 1002 pages. Available in PDF, EPUB and Kindle. Book excerpt: Determinants of firm and market organization; Analysis of market behavior; Empirical methods and results; International issues and comparision; government intervention in the Marketplace.
Download or read book Oligopoly Theory written by James Friedman and published by CUP Archive. This book was released on 1983-09-30 with total page 262 pages. Available in PDF, EPUB and Kindle. Book excerpt: James Friedman provides a thorough survey of oligopoly theory using numerical examples and careful verbal explanations to make the ideas clear and accessible. While the earlier ideas of Cournot, Hotelling, and Chamberlin are presented, the larger part of the book is devoted to the modern work on oligopoly that has resulted from the application of dynamic techniques and game theory to this area of economics. The book begins with static oligopoly theory. Cournot's model and its more recent elaborations are covered in the first substantive chapter. Then the Chamberlinian analysis of product differentiation, spatial competition, and characteristics space is set out. The subsequent chapters on modern work deal with reaction functions, advertising, oligopoly with capital, entry, and oligopoly using noncooperative game theory. A large bibliography is provided.
Download or read book The Book Publishing Industry written by Albert N. Greco and published by Taylor & Francis. This book was released on 2004-11-16 with total page 396 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume provides an innovative and detailed overview of the book publishing industry, including details about the business processes in editorial, marketing and production. The work explores the complex issues that occur everyday in the publishing in
Download or read book Handbook of Behavioral Economics Foundations and Applications 1 written by and published by Elsevier. This book was released on 2018-09-27 with total page 749 pages. Available in PDF, EPUB and Kindle. Book excerpt: Handbook of Behavioral Economics: Foundations and Applications presents the concepts and tools of behavioral economics. Its authors are all economists who share a belief that the objective of behavioral economics is to enrich, rather than to destroy or replace, standard economics. They provide authoritative perspectives on the value to economic inquiry of insights gained from psychology. Specific chapters in this first volume cover reference-dependent preferences, asset markets, household finance, corporate finance, public economics, industrial organization, and structural behavioural economics. This Handbook provides authoritative summaries by experts in respective subfields regarding where behavioral economics has been; what it has so far accomplished; and its promise for the future. This taking-stock is just what Behavioral Economics needs at this stage of its so-far successful career. - Helps academic and non-academic economists understand recent, rapid changes in theoretical and empirical advances within behavioral economics - Designed for economists already convinced of the benefits of behavioral economics and mainstream economists who feel threatened by new developments in behavioral economics - Written for those who wish to become quickly acquainted with behavioral economics
Download or read book Regulation Productivity and Growth written by Giuseppe Nicoletti and published by World Bank Publications. This book was released on 2003 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we relate the scope and depth of regulatory reforms to growth outcomes in OECD countries. By means of a new set of quantitative indicators of regulation, we show that the cross-country variation of regulatory settings has increased in recent years, despite extensive liberalisation and privatisation in the OECD area. We then look at the regulation-growth linkage using data that cover a large set of manufacturing and service industries over the past two decades. We focus on multifactor productivity (MFP), which plays a crucial role in GDP growth and accounts for a significant share of its cross-country variance. We find evidence that reforms promoting private governance and competition (where these are viable) tend to boost productivity. Both privatisation and entry liberalisation are estimated to have a positive impact on productivity. In manufacturing the gains are greater the further a given country is from the technology leader, suggesting that regulation limiting ...
Download or read book Learning and Expectations in Macroeconomics written by George W. Evans and published by Princeton University Press. This book was released on 2012-01-06 with total page 440 pages. Available in PDF, EPUB and Kindle. Book excerpt: A crucial challenge for economists is figuring out how people interpret the world and form expectations that will likely influence their economic activity. Inflation, asset prices, exchange rates, investment, and consumption are just some of the economic variables that are largely explained by expectations. Here George Evans and Seppo Honkapohja bring new explanatory power to a variety of expectation formation models by focusing on the learning factor. Whereas the rational expectations paradigm offers the prevailing method to determining expectations, it assumes very theoretical knowledge on the part of economic actors. Evans and Honkapohja contribute to a growing body of research positing that households and firms learn by making forecasts using observed data, updating their forecast rules over time in response to errors. This book is the first systematic development of the new statistical learning approach. Depending on the particular economic structure, the economy may converge to a standard rational-expectations or a "rational bubble" solution, or exhibit persistent learning dynamics. The learning approach also provides tools to assess the importance of new models with expectational indeterminacy, in which expectations are an independent cause of macroeconomic fluctuations. Moreover, learning dynamics provide a theory for the evolution of expectations and selection between alternative equilibria, with implications for business cycles, asset price volatility, and policy. This book provides an authoritative treatment of this emerging field, developing the analytical techniques in detail and using them to synthesize and extend existing research.
