Transaction Utility and Quality Choice

2017 ◽  
Vol 15 (1) ◽  
pp. 1-17 ◽  
Author(s):  
Sajeesh Sajeesh ◽  
Sang-Young Song
Keyword(s):  
Price Competition ◽  
Theoretic Model ◽  
Consumer Decision Making ◽  
Firm Strategies ◽  
Pricing Decisions ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
Quality Choice ◽  
The Impact

AbstractThis paper uses a game-theoretic model to examine the role of reference price for firms that vary in their quality positioning in competing for customers. Reference prices provide consumers with additional components of utility. Building on previous research on the impact of consumer decision making on firm strategies, we focus on how firms choose their positioning when consumer utility is driven not only by acquisition utility but also by the transaction utility associated with the purchase and how this, in turn, affects firms’ pricing decisions and profits. Considering a competition between two firms, this paper shows that the firm with higher product quality provides greater discounts to consumers. We also show that when firms are allowed to set a high ‘regular’ price, product differentiation is greater between the firms, and price competition is less intense. Furthermore, under some conditions, the profits of both firms can be higher than the benchmark case (when the effects of transaction utility are ignored).

Augmenting Employees’ Efforts in Innovation

2021 ◽  
pp. 097674792198917
Author(s):  
Nikita Jain
Keyword(s):  
Theoretic Model ◽  
Wrongful Discharge ◽  
Equilibrium Level ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Impact

Strong labour laws play a major role in motivating innovation among employees. It has been found in the literature that stringency of labour laws is positively linked with employees’ efforts in innovation, in particular, wrongful discharge laws (WDL). However, employees may also bring nuisance suits against employers. Usually, the result of these suits is that both parties settle with each other. Thus, even if employees are justly dismissed, they may be able to bring nuisance suits against employers and gain a settlement amount. This article investigates how the possibility of nuisance suits affects the impact of WDL on employees’ efforts in innovation. In this respect, a game-theoretic model is developed in the article to find the equilibrium level of employees’ efforts in the presence of nuisance suits, where there is a possibility of employees getting discharged from the firm. I find that if nuisance suits are a possibility, the stringency of WDL has no impact on employees’ efforts if defence cost of the firm is low; but for higher defence costs, WDL affects employees’ efforts. The efforts exerted by an employee are found to be weakly increasing in the defence costs of the firm.

Alliances and the High Politics of International Trade

2015 ◽  
Vol 5 (4) ◽  
pp. 587-611
Author(s):  
Scott Wolford ◽  
Moonhawk Kim
Keyword(s):  
Theoretic Model ◽  
Trade Barriers ◽  
Security Cooperation ◽  
Data Set ◽  
Dyadic Data ◽  
Military Alliances ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Relationship

What is the role of trade policy in military alliances? We analyze and test a game-theoretic model of economic and security cooperation in which allies hold different interests across the security and commercial aspects of the relationship. In equilibrium, allies with little market power who are valuable politically to larger states engage in sociallysuboptimal protectionism, as their allies’ threats of retaliation are incredible. Stable cooperation emerges in the form of unretaliated protection rather than mutually low trade barriers. We test the model’s implications against a dyadic data set of antidumping petitions from 1980 to 2013 and find that larger allies are more likely to tolerate protectionism by smaller allies by denying domestic petitions to retaliate against dumping measures by the latter.

The Impact of Ideology on Disinvestment Decisions of a Coalition

2016 ◽  
Vol 46 (5) ◽  
pp. 821-849
Author(s):  
Ritika Jain ◽  
Shubhro Sarkar
Keyword(s):  
The State ◽  
Theoretic Model ◽  
Two Stage ◽  
Game Theoretic ◽  
Stage Game ◽  
Game Theoretic Model ◽  
The Impact ◽  
Ideological Difference

We build a two-stage game theoretic model to capture the effect of ideologies of parties in a coalition on disinvestment decisions. We focus on three specific aspects of ideology—ideology score of the coalition, ideology dispersion of the coalition, and ideology difference between the center and the state where the enterprise is located. The benchmark two-party coalition predicts that a left government prefers less disinvestment than a right one more often than not. However, there may be a case where moving toward the left end of the ideology spectrum may raise disinvestment incidence. Similarly, a coalition with ideologically similar parties favors privatization more frequently than one in which parties are more diverse. However, for a narrow parametric range, the effect may be reversed. Low ideological difference between the center and the state in which the enterprise is located improves disinvestment incidence. Finally, we extend the model to three-party coalitions.

Advertising in a social network as a signal of quality

2021 ◽  
pp. 118-139
Author(s):  
Kamilla Timerbulatova
Keyword(s):  
Social Network ◽  
Opinion Leaders ◽  
Theoretic Model ◽  
The Social ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Impact ◽  
Separating Equilibrium

Advertising in a social network has a number of characteristics that distinguish it from other types of advertising, and which may be of key importance in answering the question about its ability to serve as a signal of quality. In the game-theoretic model presented in this paper, the monopolist sends an advertising signal to bloggers who act as “opinion leaders” in the social network. The latter, in turn, make decisions about posting advertising messages on their blogs, taking into account the impact that this action may have on their reputation. The paper investigates the question of when advertising can serve as a reliable signal of quality in a separating equilibrium.

scholarly journals Knowledge Spillovers through Networks of Scientists

2019 ◽  
Vol 87 (4) ◽  
pp. 1989-2018 ◽  
Author(s):  
Paolo Zacchia
Keyword(s):  
Knowledge Spillovers ◽  
Relative Proportion ◽  
Theoretic Model ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Impact ◽  
Private Return ◽  
Innovation Outcomes

Abstract In this article, I directly test the hypothesis that interactions between inventors of different firms drive knowledge spillovers. I construct a network of publicly traded companies in which each link is a function of the relative proportion of two firms’ inventors who have former patent collaborators in both organizations. I use this measure to weigh the impact of R&D performed by each firm on the productivity and innovation outcomes of its network linkages. An empirical concern is that the resulting estimates may reflect unobserved, simultaneous determinants of firm performance, network connections, and external R&D. I address this problem with an innovative IV strategy, motivated by a game-theoretic model of firm interaction. I instrument the R&D of one firm’s connections with that of other firms that are sufficiently distant in network space. With the resulting spillover estimates, I calculate that among firms connected to the network the marginal social return of R&D amounts to approximately 112% of the marginal private return.

Behavioral Consequence of Exploitation

2017 ◽  
Author(s):  
Frédérique Dubois ◽  
Philipp Heeb ◽  
Sasha R. X. Dall ◽  
Luc-Alain Giraldeau
Keyword(s):  
Public Health ◽  
Population Structure ◽  
Behavioral Ecology ◽  
Evolutionary Game ◽  
Theoretic Model ◽  
Behavioral Consequence ◽  
Major Consequence ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Impact

In behavioral ecology, the behavioral consequences of individuals (exploiters) using the investments of others (investors), rather than investing time or effort in procuring a resource themselves, has been traditionally studied using the producer–scrounger (PS) model—a simple evolutionary game theoretic model in which producers (investors) search for resources while scroungers (exploiters) use the resources found by producers. A key assumption in the PS model is that the producer remains passive toward scroungers. As the presence of scroungers is costly, evidence is reviewed that one major consequence of having exploiters is the adoption by producers of strategies that reduce the benefits of scroungers, giving rise to countermeasures by scroungers. Scroungers also affect population structure by generating consistent differences among individuals and affecting spatial preferences within groups. Reviewing the impact of scrounging on populations should help generate parallels to explore the consequences of exploitative behavior in economics and public health.

scholarly journals The impact of competition on elephant musth strategies: A game–theoretic model

2017 ◽  
Vol 417 ◽  
pp. 109-130 ◽  
Author(s):  
J. Max Wyse ◽  
Ian C.W. Hardy ◽  
Lisa Yon ◽  
Mike Mesterton-Gibbons
Keyword(s):  
Theoretic Model ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Impact

scholarly journals The Effect of Green Technology Adoption Strategy on Duopoly Competition

2021 ◽  
Vol 9 (5) ◽  
pp. 498-518
Author(s):  
Chenglin Shen ◽  
Xinxin Zhang
Keyword(s):  
Green Technology ◽  
Social Planner ◽  
Theoretic Model ◽  
Green Product ◽  
Trade Offs ◽  
Environmental Attributes ◽  
The Social ◽  
Game Theoretic ◽  
Game Theoretic Model

Abstract Given consumers’ trade-offs between conventional economic and environmental attributes of products, we provide a game-theoretic model to explore the role of GTA strategy in duopoly competition by incorporating two salient features: Two product types — The green product produced by a firm with GTA strategy and the ordinary product produced by a firm without GTA strategy, and two consumer segments, i.e., the green consumers who are willing to pay for green products and the ordinary consumers who are willing to pay for ordinary products. Our analysis shows that GTA strategy may either increase or decrease the green firm’s quality provision. The subtle relationship between the green firm’s quality strategy and GTA strategy not only affects its own equilibrium performances but its rival’s. We also find that two consumer segments may be better off in the presence of a lower GTA intensity. Additionally, although the GTA strategy benefits the environment, the GTA investment is not the more the better. Finally, we find that GTA strategy would lead to higher social welfare only when the GTA efficiency is high enough. Our work not only provides an alternative economic explanation why some firms choose to implement GTA strategy and some do not in reality, but gives managerial insights for firms with different GTA strategies as well as policy insights for the social planner.

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