A Model of the Evolution of Duopoly: Does the Asymmetry between Firms Tend to Increase or Decrease?

Budd, Christopher Houghton; Harris, Christopher; Vickers, John

doi:10.2307/2298124

Cited by 180 publications

(129 citation statements)

References 16 publications

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“…This result is in the same spirit as Budd, Harris and Vickers (1993). In a one-dimensional R&D race between two players, they show that, in expected terms, the system moves away from the symmetric state.…”

Section: Then the State Moves Away From I * In Expected Termssupporting

confidence: 67%

Dynamic Price Competition with Network Effects

Cabral

2008

SSRN Journal

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I consider a dynamic model of competition between two proprietary networks. Consumers die and are replaced with a constant hazard rate. Firms compete for new consumers to join their network by offering network entry prices (which may be below cost). New consumers have a privately known preference for each network. Upon joining a network, in each period consumers enjoy a benefit which is increasing in network size during that period. Firms receive revenues from new consumers as well as from consumers already belonging to their network.Using a combination of analytical and numerical methods, I discuss various properties of the equilibrium. I show that very small or very large networks tend to price higher than networks of intermediate size. I also show that, around symmetric states, the gap between the large and the small network tends to widen (increasing dominance) whereas the opposite is true (reversion to the mean) around very asymmetric states. * Stern School of Business, New York University; lcabral@stern.nyu.edu. I am grateful to Mike Riordan for extensive discussions on matters related to this paper. I also thank seminar participants at (in chronological order) Yale,

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Section: Then the State Moves Away From I * In Expected Termssupporting

confidence: 67%

Dynamic Price Competition with Network Effects

Cabral

2008

SSRN Journal

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“…On the other hand, the current employer may also have strong incentives to retain the inventor in order to secure monopoly profits by preventing her from moving to a competitor. The joint-profit effect (Budd et al, 1993) suggests that, in the absence of strong property rights, incumbents will have stronger incentives than their rivals to bid for their inventors, unless their products are differentiated enough in the market (Fosfuri et al, 1 Survey evidence gathered by Cohen et al (2000) suggests that firms may prefer alternative mechanisms of protection, such as secrecy or lead time, over patents in a wide range of settings. Our study considers the universe of inventions for which an application for patent protection has been filed.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Patent Protection on Inventor Mobility

2017

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This paper investigates the effect of obtaining a patent on the mobility of employee inventors who are at the beginning of their careers. We suggest that patents make human capital more specific to the employer. As a result, we expect that patenting leads to lower levels of mobility. We draw on U.S. patent application data for the period 2001-2012 to analyze this issue. Using average examiner leniency as an exogenous source of variation in granted patents, we find that one additional patent granted decreases inventor mobility by approximately 25 percent. The estimated negative effect is nearly twice as large for discrete technologies (chemicals and pharmaceuticals) for which patent effectiveness is greater. The effect is also more pronounced in cases where the inventor's knowledge can be independently transferred (e.g., inventors with few co-authors) and for moves concerning technologically similar employers. The results have implications for the effect of patents on knowledge diffusion. ABSTRACTThis paper investigates the effect of obtaining a patent on the mobility of employee inventors who are at the beginning of their careers. We suggest that patents make human capital more specific to the employer. As a result, we expect that patenting leads to lower levels of mobility. We draw on U.S. patent application data for the period 2001-2012 to analyze this issue. Using average examiner leniency as an exogenous source of variation in granted patents, we find that one additional patent granted decreases inventor mobility by approximately 25 percent. The estimated negative effect is nearly twice as large for discrete technologies (chemicals and pharmaceuticals) for which patent effectiveness is greater. The effect is also more pronounced in cases where the inventor's knowledge can be independently transferred (e.g., inventors with few co-authors) and for moves concerning technologically similar employers. The results have implications for the effect of patents on knowledge diffusion.

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“…This is not a perfect measure of comprehension for many reasons. 9 Nonetheless, it suggests that understanding the strategic setting led subjects to increase their flipping as the continuation probability increased. Indeed, no other characteristic, such as sex, exposure to statistics, and so on, seems to better predict their behavior; comprehension of the strategic environment best predicts whether or not a subject acted in accordance with our hypothesis.…”

Section: Resultsmentioning

confidence: 99%

“…This condition also appears to apply in many conflictual settings. For situations that may involve actual warfare, the condition implies a level of absence of trust (or, equivalently of institutions of governance) between 9 Clearly not all subjects who said they were more likely to flip under the higher continuation probability did so. The question was asked after subjects completed their choices and had time to consider an optimal strategy.…”

Section: Resultsmentioning

confidence: 99%

Conflict, settlement, and the shadow of the future

McBride

Skaperdas

2014

Journal of Economic Behavior & Organization

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In many instances of potential violent and non-violent conflict the future strategic positions of adversaries are very di erent when there is open conflict than when there is settlement. Then, as the future becomes more important, open conflict becomes more likely than settlement. We theoretically demonstrate this result and discuss its applicability in war, litigation, and other settings. We test for this e ect in a laboratory experiment and find that subjects are more likely to engage in risky conflict as the shadow of the future increases.JEL Classifications: C72, C91, D01, D74.

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A Model of the Evolution of Duopoly: Does the Asymmetry between Firms Tend to Increase or Decrease?

Cited by 180 publications

References 16 publications

Dynamic Price Competition with Network Effects

Dynamic Price Competition with Network Effects

The Effect of Patent Protection on Inventor Mobility

Conflict, settlement, and the shadow of the future

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