Symmetry-breaking in two-player games via strategic substitutes and diagonal nonconcavity: A synthesis

Amir, Rabah; Garcia, Filomena; Knauff, Małgorzata

doi:10.1016/j.jet.2010.01.013

Cited by 43 publications

(31 citation statements)

References 34 publications

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“…A sufficient condition for the integral above to be positive is that G θ ð Þ + k þ g θ ð Þ be an increasing function, which holds trivially if g θ ð Þ + θg ′ θ ð Þ≥0, i.e., under Assumptions 1 and 2. Now existence of at least one pair of asymmetric equilibria follows from Theorem 3.1. in Amir et al (2010) as ( Regarding uniqueness the result follows from the fact that the slope of the best correspondence function of the small firm is smaller than the one corresponding to the large firm so that they can cross only once, i.e.,…”

Section: Discussionmentioning

confidence: 99%

“…4 Endogenous asymmetries also arise in a broad family of studies in applied microeconomics. They all share two important features with our model: some form of non concavity in payoffs, and submodularity in first period actions (Amir et al, 2010). Among these studies, our approach for proving equilibrium existence closely follows Amir and Wooders (2000), who analyze a two stage game of R&D investments followed by product market competition.…”

Section: Introductionmentioning

confidence: 99%

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Endogenous capacities and price competition: The role of demand uncertainty

Frutos

Fabra

2011

International Journal of Industrial Organization

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We analyze the role of demand uncertainty in markets of fixed size, in which firms take long run capacity decisions prior to competing in prices. We characterize the set of subgame perfect Nash equilibria under various assumptions regarding the nature and timing of demand uncertainty. In order to prove equilibrium existence, we identify a sufficient condition for the capacity choice game to be submodular. This condition resembles the standard downward sloping marginal revenue condition used in Cournot games. A robust conclusion of the analysis is that equilibrium capacity choices are asymmetric, even when firms are ex ante identical. Concerning the equivalence between the capacity price game and the Cournot game, we find that with inelastic demands, the equilibria of the former belong to the equilibrium set of the latter. However, as compared to the Cournot game, the capacity price game leads to lower prices and generates price dispersion.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Endogenous capacities and price competition: The role of demand uncertainty

Frutos

Fabra

2011

International Journal of Industrial Organization

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“…The first point of Proposition 2 is that an equilibrium in pure strategy always exists (this draws on Amir et al , ). Next, the proposition emphasizes the dual effects on development strategies of the value of preemption and of the combination on resources.…”

Section: Investment In Resource Quality (Stage 1)mentioning

confidence: 99%

How do strategic factor markets respond to rivalry in the product market?

Chatain

2013

Strategic Management Journal

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This paper explores the interplay between product market, strategic factor market, and resource development. More competition in the product market makes resource buyers bid higher for resources, as the value of trying to preempt the resources is higher. Holding other initial conditions constant, resources are developed more in industries with factor markets than in industries without. When buyers of resources cannot integrate more than one resource, developers choose to develop either at a low or high level, generating a type of heterogeneity that would not arise otherwise. Changes in the intensity of competition in the product market can have the opposite effect on resource development efforts depending on the presence or absence of factor markets. Abstract This paper explores the interplay between product market, strategic factor market and resource development. More competition in the product market makes resource buyers bid higher for resources, as the value of trying to preempt the resources is higher. Holding other initial conditions constant, resources are developed more in industries with factor markets than in industries without. When buyers of resources cannot integrate more than one resource, developers choose to develop either at a low or high level, generating a type of heterogeneity that would not arise otherwise. Changes in the intensity of competition in the product market can have opposite effect on resource development efforts depending on the presence or absence of factor markets.

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“…Such asymmetric equilibria in oligopoly R&D games, although in different contexts, are already captured by some studies (see Tesoriere, ; Amir et al, , ). In the open economy setting, we find that the asymmetric equilibria may arise where the governments, as first mover players, play asymmetric trade policies.…”

Section: The Analysismentioning

confidence: 76%

International R&D Collaboration and Strategic Trade Policy

Dong

Song

Qian³

2016

Review Development Economics

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We study an international trade model with symmetric countries and symmetric firms, with countries making strategic trade policies, anticipating the decisions of firms on R&D collaboration at the subsequent stage. In general we should observe a conflict between the equilibrium outcome and the efficient one. We find that an asymmetric outcome where one country unilaterally liberalizes trade while the other does not is likely to occur. We also find that while banning international R&D collaboration may help to reach free trade equilibrium in certain situations, it provides little assistance in reaching the outcome that maximizes global welfare.

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Symmetry-breaking in two-player games via strategic substitutes and diagonal nonconcavity: A synthesis

Cited by 43 publications

References 34 publications

Endogenous capacities and price competition: The role of demand uncertainty

Endogenous capacities and price competition: The role of demand uncertainty

How do strategic factor markets respond to rivalry in the product market?

International R&D Collaboration and Strategic Trade Policy

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