We specify and estimate a dynamic game to study the equilibrium relationship between market structure and innovation in the automobile industry. The quality of each firm's product for the average consumer, the key state variable, is modeled as stochastically increasing in innovation, the dynamic...

The question that how market structure and innovation are related has been extensively studied in the literature. However, there is hardly any notable study on this question for the global automobile industry. We fill this gap by studying the relationship between market structure and innovation...

We first estimate a dynamic game for the global automobile industry and then compute a Markov Perfect equilibrium to study the equilibrium relationship between market structure and innovation. The key state variable in the model is the efficiency level of each firm and the market structure is...

Existing long-term energy and climate scenarios are typically a rather simple extrapolation of past trends. Both qualitative and quantitative outlooks co-exist, but they often focus narrowly on individual perspectives, which is opposed to the interlinked and complex nature of energy and climate....

We analyze collusion under demand uncertainty by cartels such as OPEC that care about the utility derived from profits by citizens. When citizens are sufficiently risk averse and fixed operating costs are non-trivial, it becomes difficult for cartels to collusively restrict output both when...

Existing long-term energy and climate scenarios are typically a rather simple extrapolation of past trends. Both qualitative and quantitative outlooks co-exist, but they often focus narrowly on individual perspectives, which is opposed to the interlinked and complex nature of energy and climate....

Core-periphery trading networks arise endogenously in over-the-counter markets as an equilibrium balance between trade competition and inventory efficiency. A small number of firms emerge as core dealers to intermediate trades among a large number of peripheral firms. The equilibrium number of...

In this paper, we examine the link between innovative activity on the part of firms, the competitive pressure to introduce innovations and punitive damage awards. While innovative activity brings forth valuable new products for consumers, competitive pressure in the ensuing innovation race...

We present a continuous-time generalization of the seminal R&D model of d’Aspremont and Jacquemin (American Economic Review, Vol. 78, No. 5) to examine the trade-off between the benefits of allowing firms to cooperate in R&D and the corresponding increased potential for product market...

In the last few years, U.S. telecoms policy has shifted from encouraging the sharing of existing networks to facilitating the deployment of advanced communications networks. Given the large capital expenditures required for these networks, there can be only a few of such networks. In light of...