This paper formulates a duopoly model in which firms care about relative profits as well as their own profits. Our purpose is to investigate the relationship between the weight of relative performance and R&D expenditure. We find a non-monotone relationship between the weight of relative...

This paper formulates a duopoly model of firms concerned with relative profits as well as their own profits and investigates the relationship between the degree of competitiveness in a market and R&D expenditure. We find a non-monotone relationship between the two variables. When the duopoly...

This paper investigates the long-run effect of foreign penetration in product markets on privatization policies. We find that the optimal degree of privatization is increasing in foreign penetration. This result is in sharp contrast to the existing short-run result that it is decreasing. Our...

The purpose of this paper is to provide a systematic treatment of tax policies in mixed markets with endogenous entry. We consider three types of tax-subsidy policies: a simple unit subsidy, an entry-license tax, and a policy mixture of the two instruments. Under the unit-subsidy policy, in...

This paper investigates how horizontal mergers affect the optimal entry barrier (tax) in the presence of free entry and exit. We show that the government should raise the entry tax when a merger reduces the total number of firms entering.

A conventional wisdom in economics posits that more intense market competition, measured in almost any way, reduces firm profit. In this paper, we challenge this conventional wisdom in a simple Cournot model with strategic R&D investments wherein an efficient firm (dominant firm) competes...

This paper investigates an asymmetric duopoly model with a Hotelling line. We find that helping a small (minor) firm can reduce both social and consumer surplus. This makes a sharp contrast to existing works showing that helping minor firms can reduce social surplus but always improves consumer...

We investigate the manner in which vertical separation affects lobbying activities as well as the access charges for essential facilities. We find that vertical separation either increases or decreases the access charge, and this depends on the relative efficiency between the incumbent and new...

We investigate whether or not privatization is beneficial from the viewpoint of social welfare in a monopolistic competition model. We discuss the relationship between the welfare effects of privatization and the degree of foreign direct investment in the private sector, which is an important...