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Strategic Quality Choice with Minimum Quality Standards

Lutz, Stefan; Lyon, Thomas P; Maxwell, John W - C.E.P.R. Discussion Papers - 1998

In many markets governments set minimum quality standards while some sellers choose to compete on the basis of quality … by exceeding them. Such ‘high-quality’ strategies often win public acclaim, especially when ‘environmental friendliness … product differentiation. A minimum quality standard leads both the high-quality and the low-quality firm to increase product …

Persistent link: https://www.econbiz.de/10005656312

Bigger and Better: A Dynamic Regulatory Mechanism for Optimum Quality

De Fraja, Gianni; Iozzi, Alberto - C.E.P.R. Discussion Papers - 2004

Vogelsang and Finsinger’s seminal paper (Bell Journal of Economics, 1979) proposes a mechanism for price regulation … quality is fixed: in practice, quality can be varied by the firm, and regulators have typically imposed constraints on the … firm’s quality choice. This Paper lays a rigorous theoretical foundation to the inclusion of quality measures in the …

Persistent link: https://www.econbiz.de/10005281372

Voracity and Growth

Lane, Philip R.; Tornell, Aaron - C.E.P.R. Discussion Papers - 1998

We analyse an economy that lacks a strong legal-political institutional infrastructure and is populated by multiple powerful groups. Powerful groups dynamically interact via a fiscal process that effectively allows open access to the aggregate capital stock. In equilibrium, this leads to slow...

Persistent link: https://www.econbiz.de/10005662300

How Should Control Theory be Used by a Time-Consistent Government?

Cohen, Daniel; Michel, Philippe - C.E.P.R. Discussion Papers - 1986

It has been recognized that the optimal strategy of a government is generally time-inconsistent: optimality requires that the government take into account expectations effects in the formulation of its policy and to ignore these effects when applying the policy. In order to analyse the problem,...

Persistent link: https://www.econbiz.de/10005666548

Decentralised Policies and Efficient Trade-Offs: An Essay on the Costs of Uncoordinated Fiscal and Monetary Policies

Hughes Hallett, Andrew; Petit, Maria Luisa - C.E.P.R. Discussion Papers - 1988

In many countries two decision-making institutions, the government and the central bank, manage fiscal and monetary policy separately. Such decentralization can lead to a change in the optimal inflation-output trade-off. In fact lack of cooperation can result in a change in the position of the...

Persistent link: https://www.econbiz.de/10005281276

Go For Broke or Play it Safe? Dynamic Competition with Choice of Variance

Anderson, Axel; Cabral, Luís M B - C.E.P.R. Discussion Papers - 2004

We consider a differential game in which the joint choices of the two players influences the variance, but not the mean, of the one-dimensional state variable. We interpret this state variable as a summary of how far ‘ahead’ player 1 is in the game. At each moment in time, players receive a...

Persistent link: https://www.econbiz.de/10005114198

The Relationship between Market Structure and Innovation in Industry Equilibrium: A Case Study of the Global Automobile Industry

Hashmi, Aamir Rafique; Van Biesebroeck, Johannes - C.E.P.R. Discussion Papers - 2012

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...

Persistent link: https://www.econbiz.de/10011084428

Equilibrium and Efficiency in the Tug-of-War

Konrad, Kai A.; Kovenock, Dan - C.E.P.R. Discussion Papers - 2005

We characterize the unique Markov perfect equilibrium of a tug-of-war without exogenous noise, in which players have the opportunity to engage in a sequence of battles in an attempt to win the war. Each battle is an all-pay auction in which the player expending the greater resources wins. In...

Persistent link: https://www.econbiz.de/10005661937

Budget Uncertainty and Faculty Contracts: A Dynamic Framework for Comparative Analysis

Khovanskaya, Irina; Sonin, Konstantin; Yudkevich, Maria - C.E.P.R. Discussion Papers - 2008

university finance. Universities with annual state-approved financing underinvest in high-quality faculty, while universities … long-term contracts. If university financing is linked to the number of students, there is additional pressure to hire low-quality …

Persistent link: https://www.econbiz.de/10005791354

Price Regulation, Investment and the Commitment Problem

Levine, Paul L; Rickman, Neil - C.E.P.R. Discussion Papers - 2002

We consider a dynamic model of price regulation with asymmetric information where strategic delegation is available to …

Persistent link: https://www.econbiz.de/10005124103