Nash Equilibrium and the Industrial Organization of Markets with Large Fixed Costs

Econometrica ◽  
1981 ◽  
Vol 49 (5) ◽  
pp. 1149 ◽  
Author(s):  
Sanford J. Grossman
Keyword(s):  
Industrial Organization ◽  
Nash Equilibrium ◽  
Fixed Costs ◽  
Organization Of Markets

scholarly journals Do Increasing Markups Matter? Lessons from Empirical Industrial Organization

2019 ◽  
Vol 33 (3) ◽  
pp. 44-68 ◽  
Author(s):  
Steven Berry ◽  
Martin Gaynor ◽  
Fiona Scott Morton
Keyword(s):  
Industrial Organization ◽  
Recent Literature ◽  
Sunk Costs ◽  
Fixed Costs ◽  
Antitrust Enforcement ◽  
Function Estimation ◽  
Marginal Costs ◽  
Price Increases ◽  
Empirical Industrial Organization ◽  
Production Function Estimation

This article considers the recent literature on firm markups in light of both new and classic work in the field of industrial organization. We detail the shortcomings of papers that rely on discredited approaches from the “structure-conduct-performance” literature. In contrast, papers based on production function estimation have made useful progress in measuring broad trends in markups. However, industries are so heterogeneous that careful industry-specific studies are also required, and sorely needed. Examples of such studies illustrate differing explanations for rising markups, including endogenous increases in fixed costs associated with lower marginal costs. In some industries there is evidence of price increases driven by mergers. To fully understand markups, we must eventually recover the key economic primitives of demand, marginal cost, and fixed and sunk costs. We end by discussing the various aspects of antitrust enforcement that may be of increasing importance regardless of the cause of increased markups.

The Industrial Organization of Online Education

2014 ◽  
Vol 104 (5) ◽  
pp. 519-522 ◽  
Author(s):  
Tyler Cowen ◽  
Alex Tabarrok
Keyword(s):  
Information Technology ◽  
Industrial Organization ◽  
Online Education ◽  
Fixed Costs ◽  
Market Structures ◽  
For Profit ◽  
Not For Profit ◽  
Quality Aspects

Online education has flexibility and cost advantages over in-class teaching and these advantages will grow with improvements in information technology. We consider likely market structures given that the quality aspects of online education exhibit endogenous fixed costs. Concentration in the market for courses could be high, as it is currently in the market for textbooks. The not-for-profit sector will exhibit lower costs, lower concentration, and possibly zero price.

Differentiated Cournot duopoly game with fractional-order and its discretization

2019 ◽  
Vol 36 (3) ◽  
pp. 781-806 ◽  
Author(s):  
A. Al-khedhairi
Keyword(s):  
Industrial Organization ◽  
Nash Equilibrium ◽  
Business Cycles ◽  
Fractional Order ◽  
Period Doubling ◽  
Cournot Duopoly ◽  
Nash Equilibrium Point ◽  
Content Type ◽  
Macroeconomic Analysis ◽  
Telecommunication Companies

PurposeFractional calculus provides powerful tool to build more realistic and accurate mathematical models in economic field. This paper aims to explore a proposed fractional-order differentiated Cournot duopoly game and its discretized game.Design/methodology/approachConditions for existence and uniqueness of the proposed game’s solution are derived. The existence of Nash equilibrium point and its local and global stability are obtained. Furthermore, local stability analysis of the discretized game is investigated. The effects of fractional-order on game’s dynamics are examined, along with other parameters of the game, via the 2D bifurcation diagrams in planes of system’s parameters are acquired.FindingsTheoretical and numerical simulation results demonstrate rich variety of interesting dynamical behaviors such as period-doubling and Neimark–Sacker bifurcations, attractors’ crises in addition to chaotic attractors. The results demonstrated that the stability Nash equilibrium point of the game can be lost by period doubling or Neimark–Sacker bifurcations.Practical implicationsOligopoly games are pivotal in the mathematical modeling of some substantial economic areas such as industrial organization, airline, banking, telecommunication companies, international trade and also macroeconomic analysis of business cycles, innovation and growth.Originality/valueAlthough the Cournot game and its variants have attracted great interest among mathematicians and economists since the time of its proposition till present, memory effects in continuous-time and discrete-time Cournot duopoly game have not been addressed yet. To the best of author’s knowledge, this can be considered as the first attempt to investigate this problem of fractional-order differentiated Cournot duopoly game. In addition, studying more realistic models of Cournot oligopoly games plays a pivotal role in the mathematical investigation and better understanding of some substantial economic areas such as industrial organization, airline, banking, telecommunication companies, international trade and also in macroeconomic analysis of business cycles, innovation and growth.

Resource Sharing and Allocation in P2P Social Networks

2014 ◽  
Vol 610 ◽  
pp. 588-594
Author(s):  
Qing Feng Zhang ◽  
Sheng Wang ◽  
Dan Liao
Keyword(s):  
Game Theory ◽  
Social Networks ◽  
Resource Allocation ◽  
Nash Equilibrium ◽  
Public Goods ◽  
Transaction Costs ◽  
Resource Sharing ◽  
Fixed Costs ◽  
Average Price ◽  
Resource Pricing

this paper investigated resource sharing and allocation in P2P social networks which based on game theory. Firstly, resources are divided into two categories: Public goods (PG) and Club goods (CG). The PG has the following characteristics: self-less, Non-exclusive and un-competitive; but the CG has some self-ish, exclusive and competitive. The PG only to get the sharing fixed costs and transaction costs, but the CG needs to obtain more benefits over than costs. We demonstrated that when providers sharing resource is CG within sharing capacities can achieve the maximum benefits and Nash equilibrium. Secondly, peers are divided into two sets: friends set (FS) and strangers set (SS), providers allocate the CG in different sets within different pricing by the average price. Finally, simulations analyzed benefits of peers sharing the PG or the CG, and then discussed resource allocation in different sets within different payment strategies and resource pricing in the same set.

The New Cycle in Industrial Organization

1918 ◽  
Vol 119 (12) ◽  
pp. 229-229
Author(s):  
Mark M. Jones
Keyword(s):  
Industrial Organization

Establishment and Production Costs for Peach Orchards in Florida: Enterprise Budget and Profitability Analysis

EDIS ◽  
2017 ◽  
Vol 2017 (4) ◽  
Author(s):  
Ariel Singerman ◽  
Marina Burani Arouca ◽  
Mercy A. Olmstead
Keyword(s):  
Discount Rate ◽  
Production Costs ◽  
Fixed Costs ◽  
Average Price ◽  
Land Preparation ◽  
Profitability Analysis ◽  
Enterprise Budget ◽  
Marketable Fruit ◽  
Peach Orchard

The article summarizes the establishment and production costs, as well as the potential profitability of a peach orchard in Florida. Our findings show the initial investment required for a peach operation in Florida to be $6,457 per acre; the expense in land preparation and planting alone in year 1 is $2,541 per acre. Variable and fixed costs in years 2 through 15 average $5,680 per acre. As an example of profitability, when using a 10% discount rate, an operation yielding 6,525 (7,254) pounds of marketable fruit per acre during its most productive years obtains a positive NPV when the average price is $2.38 ($2.13) per pound.

Business-groups in Russian industries

2004 ◽  
pp. 121-134 ◽  
Author(s):  
S. Avdasheva
Keyword(s):  
Industrial Organization ◽  
Economic System ◽  
Institutional Economics ◽  
Business Groups ◽  
Control Rights ◽  
Organization And Management ◽  
Russian Economy ◽  
Main Determinants ◽  
Soviet Economic System

The chapter of “Institutional Economics” textbook is devoted to the development of business-groups as a specific feature of industrial organization in the Russian economy. The main determinants of forming and functioning of business-groups such as allocation of property rights in Soviet enterprises, networks of directors and executive authorities in the Soviet economic system as well as import of new institutes and inefficient state enforcement are in the center of analysis. Origins, structure, organization and management within the groups and the role of shareholding and informal control rights are considered.

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