Identification in Auctions With Selective Entry

This paper considers nonparametric identification of a two‐stage entry and bidding game we call the Affiliated‐Signal (AS) model. This model assumes that potential bidders have private values, observe signals of their values prior to entry, and then choose whether to undertake a costly entry process, but imposes only minimal structure on the relationship between signals and values. It thereby nests a wide range of entry processes, including in particular the Samuelson (1985) and Levin and Smith (1994) models as special cases. Working within the AS model, we map variation in factors affecting entry behavior (potential competition or entry costs) into identified bounds on model fundamentals. These bounds are constructive, collapse to point identification when available entry variation is continuous, and can readily be refined to produce the pointwise sharp identified set. We then extend our core results to accommodate nonseparable unobserved auction‐level heterogeneity and potential endogeneity of entry shifters, thereby establishing a formal identification framework for structural analysis of auctions with selective entry.     

PRODUCT MARKET REGULATION,FIRM SELECTION,AND UNEMPLOYMENT

This paper analyzes the effect of product market regulation (PMR) on unemployment in a search model with heterogeneous multiple‐worker firms. In our setup, PMR modifies the distribution of firm productivities, thereby affecting the equilibrium rate of unemployment. We distinguish between PMR related to entry costs and PMR that generates recurrent fixed costs. We find that: (i) higher entry costs raise the rate of unemployment mainly through our novel selection effect, (ii) higher fixed costs decrease unemployment through the selection effect and increase it through the competition effect analyzed in Blanchard and Giavazzi (2003, Quarterly Journal of Economics, 118, 879–907). Firm heterogeneity magnifies the impact of both types of regulatory costs. We propose econometric evidence consistent with the unemployment effects of sunk versus recurring costs.     

Idiosyncratic Shocks and the Role of Nonconvexities in Plant and Aggregate Investment Dynamics

We study a model of lumpy investment wherein establishments face persistent shocks to common and plant‐specific productivity, and nonconvex adjustment costs lead them to pursue generalized (S, s) investment rules. We allow persistent heterogeneity in both capital and total factor productivity alongside low‐level investments exempt from adjustment costs to develop the first model consistent with the cross‐sectional distribution of establishment investment rates. Examining the implications of lumpy investment for aggregate dynamics in this setting, we find that they remain substantial when factor supply considerations are ignored, but are quantitatively irrelevant in general equilibrium. The substantial implications of general equilibrium extend beyond the dynamics of aggregate series. While the presence of idiosyncratic shocks makes the time‐averaged distribution of plant‐level investment rates largely invariant to market‐clearing movements in real wages and interest rates, we show that the dynamics of plants' investments differ sharply in their presence. Thus, model‐based estimations of capital adjustment costs involving panel data may be quite sensitive to the assumption about equilibrium. Our analysis also offers new insights about how nonconvex adjustment costs influence investment at the plant. When establishments face idiosyncratic productivity shocks consistent with existing estimates, we find that nonconvex costs do not cause lumpy investments, but act to eliminate them.     

Why Competition from a Multi‐Channel E‐Tailer Does Not Always Benefit Consumers*

Empirical studies have delivered mixed conclusions on whether the widely acclaimed assertions of lower electronic retail (e‐tail) prices are true and to what extent these prices impact conventional retail prices, profits, and consumer welfare. For goods that require little in‐person pre‐ or postsales support such as CDs, DVDs, and books, we extend Balasubramanian's e‐tailer‐in‐the‐center, spatial, circular market model to examine the impact of a multichannel e‐tailer's presence on retailers' decisions to relocate, on retail prices and profits, and consumer welfare. We demonstrate several counter‐intuitive results. For example, when the disutility of buying online and shipping costs are relatively low, retailers are better off by not relocating in response to an e‐tailer's entry into the retail channel. In addition, such an entry—a multichannel strategy—may lead to increased retail prices and increased profits across the industry. Finally, consumers can be better off with less channel competition. The underlying message is that inferences regarding prices, profits, and consumer welfare critically depend on specifications of the good, disutility and shipping costs versus transportation costs (or more generally, positioning), and competition.     

WHAT DETERMINES ENTREPRENEURIAL CLUSTERS?

We contrast two potential explanations of the substantial differences in entrepreneurial activity observed across geographical areas: entry costs and external effects. We extend the Lucas model of entrepreneurship to allow for heterogeneous entry costs and for externalities that shift the distribution of entrepreneurial talents. We show that these assumptions have opposite predictions on the relation between entrepreneurial activity and firm‐level TFP: with different entry costs, in areas with more entrepreneurs firms' average productivity should be lower; with heterogeneous external effects it should be higher. We test these implications on a sample of Italian firms and unambiguously reject the entry costs explanation in favor of the externalities explanation. We also investigate the sources of external effects, finding robust evidence that learning externalities are an important determinant of cross‐sectional differences in entrepreneurial activity.     

供应链中双边汇率风险传导机理及传导结果

利用批发价合同构建了一个包含国外零售商、国内零售商、制造商与供应商的博弈模型，其中制造商面临着进出口双边汇率风险。通过模型均衡，研究了双边汇率波动性及其相关性结构对供应链节点企业运作变量的波动性、期望业绩和业绩方差的影响（传导机理和结果）。结果表明：当进出口汇率波动负相关时，随着进（出）口汇率波动性程度的增加，（1）供应商和国外零售商运作变量的波动性、期望业绩和业绩方差，制造商对供应商和国外零售商的均衡批发价方差，制造商期望业绩均增加；（2）制造商对国内零售商的均衡批发价方差，国内零售商运作变量的波动性、期望业绩和业绩方差均先降低后增加，风险传导呈现出U-型特征；当进出口汇率波动正相关时，随着进（出）口汇率波动性程度的增加，（3）供应商和国外零售商运作变量的波动性、期望业绩和业绩方差，制造商对供应商和国外零售商的均衡批发价方差，制造商期望业绩均先降低后增加，此时风险传导也呈现出U-型特征；（4）制造商对国内零售商的均衡批发价方差，国内零售商运作变量的波动性、期望业绩和业绩方差均增加。     

多哈农业谈判:取消出口补贴的影响分析

由于出口补贴对世界农产品贸易的严重扭曲,2001年11月WTO第四届部长级会议发表的《多哈部长宣言》,明确要求“削减并力争取消所有形式的出口补贴”,建立严格的出口补贴纪律,出口补贴成为多哈农业谈判的核心问题。经过WTO成员艰苦努力,各方在2005年12月召开的WTO香港部长会议上,终于就在2013年前取消所有出口补贴达成一致。本文拟在评估WTO乌拉圭回合农产品出口补贴规则执行效果的基础上,根据WTO香港会议成果,应用计量模型模拟分析取消出口补贴的可能影响。     

政府规制下非对称信息对闭环供应链差别定价的影响研究

为了研究政府规制下非对称信息对闭环供应链（CLSC）差别定价的影响，构建了政府、制造商、零售商和消费者的三阶段博弈决策模型，通过分析政府补贴与惩罚政策下CLSC各利益主体的最优定价策略，发现：在政府规制的最优水平下，非对称信息的单位产品的外部性成本变化对制造商的利润影响更为显著；新产品和再造品间的替代率存在界点，对不同决策下零售商产品定价影响不同；社会福利是政府规制的联合凹凸函数，政府的奖惩政策存在最优水平，提高了政府的规制水平，对制造商提高生产工艺和回收水平起到积极促进作用。     

Production,Process Investment,and the Survival of Debt‐Financed Startup Firms

Whether to invest in process development that can reduce the unit cost and thereby raise future profits or to conserve cash and reduce the likelihood of bankruptcy is a key trade‐off faced by many startup firms that have taken on debt. We explore this trade‐off by examining the production quantity and cost reducing R&D investment decisions in a two period model wherein a startup firm must make a minimum level of profit at the end of the first period to survive and operate in the second period. We specify a probabilistic survival measure as a function of production and investment decisions to track and manage the risk exposure of the startup depending on three key market factors: technology, demand, and competitor's cost. We develop managerial insights by characterizing how to create operational hedges against the bankruptcy risk: if a startup makes a “conservative” investment decision, then it also selects an optimal quantity that is less than the monopoly level and hence sacrifices some of first period expected profits to increase its survival chances. If it decides to invest “aggressively,” then it produces more than the monopoly level to cover the higher bankruptcy risk. We also illustrate that debt constraint shrinks the decision space, wherein such process investments are viable.     

Hierarchical Screening for Capacity Allocation in Supply Chains: The Role of Distributors

We consider a two‐stage principal–agent screening environment in a decentralized supply chain with retailers, distributors, and a supplier. The retailers possess private information regarding their local market profitabilities. The distributors can partially observe the retailers' profitabilities and are heterogeneous with regard to the precision of that information. The supplier determines the level of production, but knows neither the local market profitabilities nor the precision of the distributors' information. The supplier first allocates finished products to distributors, and the distributors then contract with local retailers with a capacity constraint. We find that due to the distributors' superior information, the quantity distortion on the retailers' side is mitigated, and the upstream information asymmetry subsequently affects the quantity allocation among the downstream retailers. The supplier may not benefit from contracting with the distributors. In addition, no distributor is excluded based on the heterogeneity of the information precision, even though some distributors do not have better information than the supplier. In the numerical examples, we further analyze how the local market heterogeneity and inventory costs affect the capacity allocation, the retailers' payoffs, and the supply chain profits. We document some counter‐intuitive quantity allocation rules that arise from the distributors' information advantage.     

Firing Costs,Efficiency Wages and Unemployment

This paper uses a Shapiro–Stiglitz efficiency wage model to analyse the effects of firing costs on wages, employment, expected utility and profits. It considers that the probability of a non–shirker being fired depends on an exogenous shock which follows a two–state Markov process. It finds that higher severance payments give rise to lower wages, a lower unemployment rate, an increase in firms’ profits and a decrease in the utility of both workers and the unemployed. These conclusions derive from the finding that a greater probability of keeping one’s job, because of higher firing costs, raises the value of the job and reduces the worker’s incentives to behave opportunistically; this enables firms to reduce wages. Hence, if firms pay efficiency wages, a higher degree of labour market flexibility increases unemployment.     

UNCERTAIN DEMAND,CONSUMER LOSS AVERSION,AND FLAT‐RATE TARIFFS

We consider a model of firm pricing and consumer choice, where consumers are loss averse and uncertain about their future demand. Possibly, consumers in our model prefer a flat rate to a measured tariff, even though this choice does not minimize their expected billing amount—a behavior in line with ample empirical evidence. We solve for the profit‐maximizing two‐part tariff, which is a flat rate if (a) marginal costs are not too high, (b) loss aversion is intense, and (c) there are strong variations in demand. Moreover, we analyze the optimal nonlinear tariff. This tariff has a large flat part when a flat rate is optimal among the class of two‐part tariffs.     

Optimal Strategies for Interception,Detection, and Eradication in Plant Biosecurity

The introduction of invasive species causes damages from the economic and ecological point of view. Interception of plant pests and eradication of the established populations are two management options to prevent or limit the risk posed by an invasive species. Management options generate costs related to the interception at the point of entry, and the detection and eradication of established field populations. Risk managers have to decide how to allocate resources between interception, field detection, containment, and eradication minimizing the expected total costs. In this work is considered an optimization problem aiming at determining the optimal allocation of resources to minimize the expected total costs of the introduction of Bemisia tabaci‐transmitted viruses in Europe. The optimization problem takes into account a probabilistic model for the estimation of the percentage of viruliferous insect populations arriving through the trade of commodities, and a population dynamics model describing the process of the vector populations' establishment and spread. The time of field detection of viruliferous insect populations is considered as a random variable. The solution of the optimization problem allows to determine the optimal allocation of the search effort between interception and detection/eradication. The behavior of the search effort as a function of efficacy or search in interception and in detection is then analyzed. The importance of the vector population growth rate and the probability of virus establishment are also considered in the analysis of the optimization problem.     

考虑汇率变化和运输成本分担的跨国供应链数量折扣契约

建立了跨国供应链的数量折扣模型,模型中考虑了汇率、国际运输成本分担比例等因素。通过分析得到了协调跨国供应链的数量折扣契约,在该契约下供应商、销售商以及供应链系统的利润都得到改善。最后通过实例验证了模型和有关命题,分析了汇率变化对契约参数及供应链各方、供应链系统利润的影响,结果表明:①汇率变化下,数量折扣率和国际运输成本分担比例具有稳定性,变化较大的契约参数是订购量;②即使实现了供应链协调,随着人民币对美元的升值,不仅使中国供应商的利润下降,也使美国销售商以及供应链系统的利润下降。根据实例计算结果与分析,从供应链管理的角度认为,应该保持人民币对美元汇率的稳定。     

A WTP‐Choice Model: Empirical Validation,Competitive and Centralized Pricing

Willingness To Pay (WTP) of customers plays an anchoring role in pricing. This study proposes a new choice model based on WTP, incorporating sequential decision making, where the products with positive utility of purchase are considered in the order of customer preference. We compare WTP‐choice model with the commonly used (multinomial) Logit model with respect to the underlying choice process, information requirement, and independence of irrelevant alternatives. Using WTP‐choice model, we find and compare equilibrium and centrally optimal prices and profits without considering inventory availability. In addition, we compare equilibrium prices and profits in two contexts: without considering inventory availability and under lost sales. One of the interesting results with WTP‐choice model is the “loose coupling” of retailers in competition; prices are not coupled but profits are. That is, each retailer should charge the monopoly price as the collection of these prices constitute an equilibrium but each retailer's profit depends on other retailers' prices. Loose coupling fails with dependence of WTPs or dependence of preference on prices. Also, we show that competition among retailers facing dependent WTPs can cause price cycles under some conditions. We consider real‐life data on sales of yogurt, ketchup, candy melt, and tuna, and check if a version of WTP‐choice model (with uniform, triangle, or shifted exponential WTP distribution), standard or mixed Logit model fits better and predicts the sales better. These empirical tests establish that WTP‐choice model compares well and should be considered as a legitimate alternative to Logit models for studying pricing for products with low price and high frequency of purchase.     

Inefficient Job Destructions and Training with Hold‐up

This paper develops an equilibrium search model with endogenous job destructions and where firms decide at the time of job entry how much to invest in match‐specific human capital. We first show that job destruction and training investment decisions are strongly complementary. It is possible that there are no firings at equilibrium. Further, training investments are confronted to a hold‐up problem making the decentralized equilibrium always inefficient. We show therefore that both training subsidies and firing taxes must be implemented to bring back efficiency.     

Lowest Cost May Not Lower Total Cost: Using “Spackling” to Smooth Mass‐Customized Production

Consider a manufacturer who mass customizes variants of a product in make‐to‐order fashion, and also produces standard variants as make‐to‐stock. A traditional manufacturing strategy would be to employ two separate manufacturing facilities: a flexible plant for mass‐customized items and an efficient plant for standard items. We contrast this traditional focus strategy with an alternative that better utilizes capacity by combining production of mass‐customized and standard items in one of two alternate spackling strategies: (1) a pure‐spackling strategy, where the manufacturer produces everything in a (single) flexible plant, first manufacturing custom products as demanded each period, and then filling in the production schedule with make‐to‐stock output of standard products; or (2) a layered‐spackling strategy, which uses an efficient plant to make a portion of its standard items and a separate flexible plant where it spackles. We identify the optimal production strategy considering the tradeoff between the cost premium for flexible (versus efficient) production capacity and the opportunity costs of idle capacity. Spackling amortizes fixed costs of capacity more effectively and thus can increase profits from mass customization vis‐à‐vis a focus strategy, even with higher cost production for the standard goods. We illustrate our framework with data from a messenger bag manufacturer.     

BIDDING FOR HORIZONTAL MULTINATIONALS

We present a model in which governments bid for firms by taxing/subsidizing setup costs. Firms choose both the number and the location of the plants they operate, and the equilibrium industry structure is affected by governments' subsidy choices. We show that the endogenous presence of horizontal multinationals attenuates the race to the bottom and yields some results that run counter to traditional findings in the literature. First, in the presence of multinationals, increasing subsidies decrease firms' profits by exacerbating price competition due to more firms going multinational. Second, instead of being always subsidized, firms may actually be taxed in equilibrium. Last, subsidies may become strategically independent policy instruments, instead of being strategic complements. (JEL: F12, F23, H27, H73, R12)     

Browse‐and‐Switch: Retail‐Online Competition under Value Uncertainty

Although online shopping is becoming popular, consumers who are unsure about whether to buy a product may find it advantageous to visit a brick‐and‐mortar retail store to first examine the product before purchasing it. But, after browsing at the store, consumers have the option of switching to an e‐tailer to purchase the item at a cheaper price rather than buying at the store. Recent business press refers to this browse‐and‐switch behavior as “showrooming,” and attributes to it the declining profits of brick‐and‐mortar retailers. To study the effect of the browse‐and‐switch option on retail and online pricing strategies and profits, we analyze a stylized economic model that incorporates uncertainty in consumers' valuation of the product, captures the heterogeneity among consumers in their inclination to purchase online, and permits product returns. We consider various equilibrium scenarios for different combinations of consumer shopping behaviors, characterize the parameter ranges for each scenario, and demonstrate that browse‐and‐switch behavior can indeed occur under equilibrium. Our analysis further shows that the option for consumers to browse‐and‐switch intensifies competition, reducing the profits for both firms.     

Sourcing Decisions with Competitive Suppliers and Imperfect Information

Manufacturers often must choose between outsourcing and producing internally. This choice is complex and influenced by a variety of factors, including the costs and capabilities of the potential suppliers. In addition, if the manufacturer outsources, he must design the sourcing process. We study the manufacturer's outsourcing decision, with a focus on the impact of the sourcing process on that decision. We consider a setting in which the manufacturer has imperfect information regarding the suppliers' costs and capabilities, and we assume that the manufacturer uses a two‐stage sourcing process. The first stage is the qualification stage, in which the manufacturer seeks to reduce the uncertainty regarding the suppliers' capabilities. The second stage is the supplier selection stage, in which the manufacturer selects among the qualified suppliers on the basis of price. We first characterize the optimal design of the two‐stage process, and then consider the outsourcing decision. We demonstrate several trade‐offs. Vertical integration enables the manufacturer to reduce uncertainty and extract all of the profits of production. However, outsourcing enables the manufacturer to take advantage of the (potentially) lower costs and higher capabilities of the suppliers, particularly if competition between suppliers can be encouraged. We find that the manufacturer is more likely to vertically integrate when the warranty cost and the cost of exerting effort during qualification are large, and when there is significant uncertainty regarding the suppliers' capabilities. The manufacturer is more likely to outsource when the suppliers' costs (capabilities) are low (high), and when the number of suppliers is large.