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Proposes a model which shows that Stackelberg competition is not necessarily welfare‐ enhancing compared with Cournot competition. Shows that, although in a simple duopoly model prices in a Stackelberg equilibrium are lower than in a Cournot equilibrium, this is not necessarily true in an entry‐deterrence framework, where post‐entry competition is Stackelberg rather than Cournot. Derives conditions under which in this framework Stackelberg competition leads to lower expected welfare, in the case where demand is linear.

I study the economic implications of the world oil market dominated by OPEC and non-OPEC major oil producing countries using a general equilibrium model of trilateral trade with oil duopoly. There are three countries and three goods, x, y, and oil (z). Home (H) is endowed with good x . Foreign (F) is endowed with good y and also produces oil (z). Middle (M) is an oil producing country and supplies oil only. I consider two types of oil market structure; (1) Cournot duopoly and (2) perfect competition. I find that Foreign is actually worse off under Cournot duopoly despite being a duopolist for wide range of parameter values that reflect real world situations. This is mainly due to reduced consumption of oil and reduced value of good y endowment under duopoly when Foreign is a net oil exporter or oil autarky, and is also due to worsening terms-of-trade effect under duopoly when Foreign is a net oil importer. Welfare reversal with higher welfare of Foreign under oil duopoly occurs only under highly unrealistic parameter values, and hence the main results of the study remain robust.

States that the Stackelberg leadership model is rarely used to describe market price determination perhaps because of the lack of a theoretical basis for selecting the minimum size necessary for leadership. Provides structural sufficiency conditions for selecting a unique Stackelberg leader based on the concept of Pareto dominance, in which the structural criterion involves the relative capacity shares of the first and second largest market rivals. Suggests that the Stackelberg price game is a viable static equilibrium construct even though the fringe firms are not atomistic. Applies the Stackelberg model to antitrust merger analysis.

We contribute to the emerging literature on strategic corporate social responsibility (CSR) and its antecedents by undertaking a systematic analysis of the effect of rivalry on firm and industry CSR. We deal with the codetermination of competition and CSR by using instrumental variables in the firm-level analysis and by modeling it directly in the industry-level analysis. We find that higher intensity of rivalry and CSR of competitors increase firm CSR, ceteris paribus; however, in a more dynamic setting when firms can change their production output, more competition in fact decreases aggregate industry CSR. While seemingly contradictory, these findings suggest interesting implications for both managers and public policy makers.

The fragmentation can either lead to an all-out civil war as in Sri Lanka or a frozen conflict as in Georgia. One of the main characteristics of fragmentation is the control of group members by their respective leaders. The chapter applies standard models of non-cooperative game theory to explain the endogenous fragmentation, which seeks to model the equilibrium formation of rival groups. Citizens become members of these rival groups and some sort of clientelism develops in which political leaders control their respective fragments of citizens. Once the divisions are created, the inter-group rivalry can trigger violent conflicts that may seriously damage the social fabric of a nation and threaten the prospect of peace for the people for a very long time. In other words, our main goal in this chapter is to understand the formation of the patron–client relationship or what is called clientelisation.

This paper aims to examine the optimal sourcing strategies and pricing decisions of competing toy manufacturers and to discuss how manufacturers’ decisions are impacted by competition.

The authors consider a single-period model to characterise the competition between two competing toy manufacturers. Both of them are free to choose between virgin material and recycled material. The authors consider two types of consumers: sensitive consumers who are concerned about product safety and prefer the toy made of virgin material and insensitive consumers who do not care what material is used in the toy. The competing manufacturers play a Cournot competition.

The results reveal a special case of a win-win situation for both the manufacturer and the consumer. In addition, an increasing number of sensitive consumers does not always raise the price of virgin-material toys.

The authors derive the manufacturer’s equilibrium sourcing strategies, corresponding market-clearing prices and profits obtained.

The paper investigates how toy manufacturers’ optimal sourcing strategies are impacted by competition, considering market segments.

The purpose of this paper is to analyse a key research hypothesis: Do firms ruled by managers have a greater rationale to implement a mergers and acquisitions (M&A) than (family) firms managed by their owners?

This paper uses an organizational-delegation-quantity oligopoly game to examine the profitability of M&As for firms that strategically delegate production decisions to managers versus family firms with no strategic delegation. This paper delimits the condition for delegation as aimed at increasing merger profitability: non-family CEOs will implement mergers more frequently than family CEOs and more so for inefficient firms because these require fewer synergies. The paper tests the main propositions with data on all M&As by small and medium firms in Spain in 2017 and 2018.

The greater the average operating margin of a firm, the more likely a merger, which is also more likely between non-family firms. The evidence of higher ex post synergies by firms is not statistically significant due to large variability, suggesting that some family firms did not obtain the expected ex ante synergies. The lesson is that family firms competing in an environment of high marginal costs (e.g. industries in the early stage of the life cycle) seeking to grow through inorganic means such as M&As have an incentive to professionalize management.

This paper models competition in a Cournot fashion, representative of industries where firms compete in terms of sales growth and increased market share. Other results might hold in industries where firms are oriented to price competition or to service differentiation. The empirical research uses proxies for key variables such as the form of firm governance and unit costs, while hypotheses on ex ante synergies driving merger decisions had to be tested through ex post synergies.

M&As by small firms and family firms remain largely unexplored in the literature. This paper contributes with both a theoretical model and empirical research that highlight the implications of strategic delegation contracts for M&A deals.

In this chapter, we will review the history, deregulation, policy reforms, and airline consolidations and mergers of the Chinese airline industry. The measurement of airline competition in China’s domestic market will also be discussed. Although air deregulation is still ongoing, the Chinese airline industry has become a market-driven business subject to some mild regulations. Then, we will review the impressive development of the high-speed rail (HSR) network in China and its effects on the domestic civil aviation market. In general, previous studies have found that the introduction of HSR services has a significant negative impact on airfare and air travel demand in China. The rapidly expanding network of HSR has important policy implications for Chinese airlines.

The purpose of this paper is to extend a theoretical framework for analyzing competition and innovation in the presence of horizontal spillovers.

A theoretical analysis approach is adopted to drive the paper’s findings.

It is shown that when firms behave non-cooperatively in both the R&D and production stages, the degree of spillover has a negative relationship with the effective and respective R&D expenditures of each firm as well as the level of social welfare. An inverted-U relationship between competition and social welfare also holds. When firms behave cooperatively in the R&D stage, and non-cooperatively in the production stage the relationship between the R&D expenditure of the joint research lab and the number of firms in the market is negative.

In the literature on R&D spillovers and process innovation, efforts are mostly focused on the comparative R&D expenditures and the relative social welfare between non-cooperative and cooperative R&D. The question of the effectiveness of R&D technology on the optimal number of firm, however, is not explicitly addressed. The paper is intended to address this lacuna.

This study aims to investigate whether the contract manufacturer (CM) should take the first-mover advantage in the end-product without supplying core components to the original equipment manufacturer (OEM) immediately, or should fully squeeze the benefit of the learning effect through an amplified production quantity by letting the OEM enter the end-product market early.

The authors propose a two-period model for a supply chain consisting of a CM and an OEM where the CM has four alternative entry strategies concerning it competition to the OEM in the end-product market. For each strategy, the authors derive the equilibrium solutions of the two firms using a backward approach. Comparison leads to the CM’s final choices among the four strategies.

For both CM and OEM, the monopoly and the first-entry strategies will be dominated by either the post-entry or the simultaneous-entry strategy, and thus, their preferred strategy is chosen from the latter two. Regarding the two firms choices between the post- and simultaneous-entry strategy, the CM prefers the post-entry strategy when the OEMs brand premium is at a moderate level, whereas the OEM prefers the post-entry strategy when its brand premium is low, and the learning effect can amplify the interval for the CMs adopting the post-entry strategy as well as changes the interval for the OEMs preference related to the two strategies.

This paper is the first one to explore the optimal strategy for a CM to maximize its profit in a co-opetitive supply chain situation with a CM and an OEM. The authors believe that our paper contributes to both literature and the market.