A Simple Method for Bounding the Elasticity of Growing Demand with Applications to the Analysis of Historic Antitrust Cases

We propose a simple method, requiring only minimal data, for bounding demand elasticities in growing, homogeneous-product markets. Since growing demand curves cannot cross, shifts in market equilibrium over time can be used to “funnel” the demand curve into a narrow region, bounding its slope. Our featured application assesses the antitrust remedy in the 1952 DuPont decision, ordering incumbents to license patents for commercial plastics. We bound the demand elasticity significantly below 1 in many post-remedy years, inconsistent with monopoly, supporting the remedy’s effectiveness. A second application investigates whether the 1911 dissolution of American Tobacco fostered competition in the cigarette market. (JEL K21, L24, L65, L66, N41, N42, O34)

Self-Enforcing Price Leadership

A dynamic Bertrand-duopoly model where price leadership emerges in equilibrium is developed. In the price leadership equilibrium, a firm leads price changes and its competitor always matches in the next period. The firms produce a homogeneous product and are identical except for the information they possess about demand. The market size follows a two-state Markov process. Market size realizations are observed by one of the firms but not the other. Without explicit communication, price leadership allows firms to jointly approximate monopolistic profits in equilibrium as the market size becomes more persistent provided that firms are patient. In the presence of persistent market dynamics, the informed firm’s price serves as a signal of current and therefore future market conditions. In the proposed price leadership equilibrium, the informed firm could cut prices without being detected, but it does not do so because it would lead the uninformed to also lower their price in the following period.

Condensation of SIP Particles and Sticky Brownian Motion

We study the symmetric inclusion process (SIP) in the condensation regime. We obtain an explicit scaling for the variance of the density field in this regime, when initially started from a homogeneous product measure. This provides relevant new information on the coarsening dynamics of condensing interacting particle systems on the infinite lattice. We obtain our result by proving convergence to sticky Brownian motion for the difference of positions of two SIP particles in the sense of Mosco convergence of Dirichlet forms. Our approach implies the convergence of the probabilities of two SIP particles to be together at time t. This, combined with self-duality, allows us to obtain the explicit scaling for the variance of the fluctuation field.

Stability, Global Dynamics, and Social Welfare of a Two-Stage Game under R&D Spillovers

In this paper, a repeated two-stage oligopoly game where two boundedly rational firms produce homogeneous product and apply gradient adjustment mechanism to decide their individual R&D investment is considered. Results concerning the equilibrium in the built model and the stability are discussed. The effects of system parameters on the complex dynamical behaviors of the built game are analyzed. We find that the system can lose stability through a flip bifurcation or a Neimark–Sacker bifurcation. In addition, the coexistence of multiattractors is also discussed using the so-called basin of attraction. At the end of this research, the social welfare of the given duopoly game is also studied.

Puna cena električne energije proizvedene iz lignita u Srbiji

The main goal of this research is to alocate costs by type to cost bearers. Two basic bearers of costs have been defined in the public electricity company in Serbia (hereinafter referred to as the company), although it is a homogeneous product: 1. electricity from lignite thermal power plants and 2. electricity from hydropower plants. In that sense, we have carried out a set of procedures through which the costs per unit of product were incurred (in this case, the unit of production is 1 MWh of electricity). First, on the basis of the costs that the company records in its income statements during 2017, 2018 and 2019, it is estimated how much expenditure the company has and bears, i.e. the state (since it is a public company) for the production of 1MWh. Then, the cost price was "upgraded" with those expenses that are "not seen" directly in the company's income statement, but are paid by society and the state in other ways. In this way, based on available data, we determined the cost of 1MWh of electricity produced from lignite for Serbian citizens today, and estimated how much it could cost in the near future, when access to electricity production based on unfair competition based on neglecting health costs and effects global warming.

Effect of Pasteurization and Ripening Temperature on Chemical and Sensory Characteristics of Traditional Motal Cheese

The appropriate physicochemical and sensory characteristics and the traditional elaboration process of Motal cheese resulted in a high consumer acceptability. However, different process steps could have a significant effect on these characteristics. Thus, the present study aimed to investigate the effects of pasteurization, ripening time, and ripening temperature (6 °C and 12 °C) on the physicochemical properties, sensory characteristics, and proteolysis and lipolysis phenomenon of traditional Motal cheese. The cheeses were evaluated each 15 days during 3 months of ripening process. The results showed that pasteurization and ripening temperature had a significant effect on pH, acidity, dry matter, fat, protein, and salt (p < 0.05), which were higher in pasteurized cheeses ripened at higher temperature (12 °C). Moreover, the content of these parameters increased as ripening progressed. Proteolysis and lipolysis intensity were higher in the cheeses elaborated form raw milk and ripened at 12 °C (R12), mainly due to the higher activity of enzymes and/or bacteria. As a general conclusion, the pasteurization and low-temperature ripening process allows us to have a homogeneous product and ensure the microbiological stability of the cheeses, as well as presents higher physicochemical qualities than those obtained from raw milk.

Stability and Multistability of a Bounded Rational Mixed Duopoly Model with Homogeneous Product

In this paper, a mixed duopoly dynamic model with bounded rationality is built, where a public-private joint venture and a private enterprise produce homogeneous products and compete in the same market. The purpose of this research is to study the stability and the multistability of the established model. The local stability of all the equilibrium points is discussed by using Jury condition, and the stability region of the Nash equilibrium point has been given. A special fractal structure called “hub of periodicity” has been found in the two-parameter space by numerical simulation. In addition, the phenomena of multistability (also called coexistence of multiple attractors) are also studied using basins of attraction and 1-D bifurcation diagrams with adiabatic initial conditions. We find that there are two different coexistences of multiple attractors. And, the fractal structure of the attracting basin is also analyzed, and the formation mechanisms of “holes” and “contact” bifurcation have been revealed. At last, the long-term profits of the enterprises are studied. We find that some enterprises can even make more profits under a chaotic circumstance.

Supply Chain Decision-Making and Coordination considering Anticipated Regret under Price Discount

The increasing homogeneous product market has made more competition among companies to focus on improving customers’ experience. In order to get more competitive advantages, companies often launch discount products to attract consumers. However, stimulated by discount products, the perception of anticipated regret is becoming stronger, which is an inevitable issue in front of companies with price discount strategy. Considering the impact of anticipated regret for discount products, this paper quantitatively describes the utility functions and deduces the demand functions of original price products and discount products. The theoretical analysis and numerical simulation are used to analyze centralized and decentralized models of supply chain for discount products. On its basis, the revenue-sharing contract is designed to optimize the profits of supply chain. This paper finds that the price of products increases first and then decreases with the increase of regret sensitivity coefficient and consumer heterogeneity. When the regret sensitivity coefficient and consumer heterogeneity are lower, companies in the supply chain can adopt the “skimming pricing” strategy in order to obtain more profits. When the regret sensitivity coefficient and consumer heterogeneity increase, companies in the supply chain can adopt “penetrating pricing” strategies to stimulate market demand. For high regret consumers, manufacturers can adopt a “commitment advertising” strategy to promise price and quality, and retailers can adopt a “prestige pricing” strategy to reduce consumer perception of regret. In response to products with higher differences in consumer acceptance, manufacturers can adopt a “differentiated customization” strategy to meet different types of consumer demand and retailers can adopt a “differential pricing” strategy for precise marketing.

A reconsideration of tourism specialization in Europe

Tourism specialization has been studied so far at an aggregate geographical level and by considering tourism as a homogeneous product. The result is a simplistic and stereotypical image of tourism specialization, as for Europe where southern European Union (EU) countries are commonly viewed as highly specialized in tourism services and northern EU countries highly specialized in other activities. The purpose of this article is to provide a method for a deeper analysis of tourism specialization. We study comparative advantages and disadvantages of a sample of 20 European countries over the period 2010–2016 by considering bilateral flows of three different quality tourism services (high, middle, low). Our results show serious differences with those obtained by the traditional approach.