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This article analyzes the strategic decisions of firms whether to establish and adhere to a cartel when they can also shape competition by investing into production capacity while being subject to unexpected demand shocks with persistence. The model shows that a negative demand shock can...
Persistent link: https://www.econbiz.de/10010126878
This article provides a framework for the analysis of cartel formation. It models the strategic interaction among firms who invest into production capacity, sell a near-homogeneous good, and are subject to unexpected demand shocks with persistence. The firms either compete or collude in prices....
Persistent link: https://www.econbiz.de/10010343755
We survey recent microeconometric research on investment and employment that has used panel data on individual firms or … theory of the demand for capital and labour, on which most of the econometric models of investment and employment that we … of adjustment, which have played a prominent role especially in the microeconometric literature on investment. With …
Persistent link: https://www.econbiz.de/10014024950
We develop a two-period model of bundling strategy when a monopolistic firm faces uncertain demand in the second period. We examine the effect of intertemporal bundling on market outcomes in three cases: when the monopolist offers bundling without an option to purchase an individual future...
Persistent link: https://www.econbiz.de/10012751499
In this paper we test both sunk cost and strategic size liability predictions by looking at the exit behavior of a sample of Italian manufacturing plants. For this purpose, we focus on plants' size and ownership status. In particular, we distinguish independent plants from plants that belong to...
Persistent link: https://www.econbiz.de/10012764707
The paper analyzes investment behavior of industrial enterprises in the period immediately following price and foreign … microeconomic decisions. A dynamic investment function with symmetric adjustment cost function based on the Euler equation has been … estimated. The derived and estimated investment function accounts for export sales in order to determine whether firms evaluate …
Persistent link: https://www.econbiz.de/10014182707
This paper investigates the impact of technical progress on the relationship between competition an investment. The …. In a context of duopoly, technical progress raises investment of the industry and tends to reduce the degree of … substitutability that maximizes investment. Five examples illustrate this feature and highlight the fact that technical progress is not …
Persistent link: https://www.econbiz.de/10012965244
investment decisions via both adjustment costs and marginal profitability of capital. The authors test these hypotheses using a …
Persistent link: https://www.econbiz.de/10013107308
The paper analyzes investment behavior of industrial enterprises in the period immediately following price and foreign … microeconomic decisions. A dynamic investment function with symmetric adjustment cost function based on the Euler equation has been … estimated. The derived and estimated investment function accounts for export sales in order to determine whether firms evaluate …
Persistent link: https://www.econbiz.de/10013149074
The paper builds up a macro function of investment to capture various key determinants and explore the intricate … determination mechanism of aggregate investment. It explicates the basic trend determinant of investment, locates the cause of … investment volatility and identifies the magnifier of volatility, recognizes the sluggish force and its sluggish and …
Persistent link: https://www.econbiz.de/10012899004