Interference, Contracts and Authority with Insecure Communication

No abstract.

Mergers in Emerging Markets with Network Externalities: The Case of Telecoms

This paper develops a unifying framework to understand competition issues in networkindustries. It focuses on the telecom(munication) industry and takes two specific effectsof this industry into account. First, the telecom industry is in continuous evolution andalliances affect not only the current market power of the firms but also the evolution ofthe industry. Second, the production of services in the industry is evolving towards theprovision of integrated services in a "system" that benefits from strong "networkexternalities". The analysis suggests that the antitrust authorities should capture as wellsuch effects as the magnitude of the installed bases, the compatibility of the alliance’ssystem with other systems, the switching costs for customers and application writers,and the "credibility" of the alliance to offer the service. The developed frameworkbuilds on the existing models of networks and combines the different network effects. The relevance of the framework is shown for two important merger cases (WorldCom-MCI and MSG cases), involving respectively an existing market and an emerging one. ZUSAMMENFASSUNG - (Unternehmenszusammenschlüsse in entstehenden Märkten mit Netzexternalitäten: Das Beispiel der Telekommunikationsindustrie) In diesem Beitrag wird ein einheitlicher Bezugsrahmen zur Analyse des Wettbewerbs in Netzwerkindustrien entwickelt. Er zielt auf die Analyse der Telekommunikationsindustrie ab und berücksichtigt dabei spezielle Effekte dieser Industrie. Erstens ist die Telekommunikationsindustrie durch eine stetige Evolution gekennzeichnet und Allianzen zwischen den Unternehmen beeinflussen nicht nur die aktuelle Marktmacht der Unternehmen, sondern auch die Entwicklung der Industrie. Zweitens entwickelt sich die Produktion der Dienste in dieser Industrie immer stärker in Richtung auf das Angebot integrierter Dienste (Systemangebote), die Vorteile aus Netzexternalitäten nutzen. Die Analyse zeigt auch, daß die Wettbewerbsbehörden ebenfalls Merkmale wie die Anzahl der verfügbaren Anschlüsse, die Kompatibilität des Systems der Allianz mit anderen Systemen, die Wechselkosten der Kunden sowie die Glaubwürdigkeit der Dienstleistungsqualität der Allianz berücksichtigen sollten. Der entwickelte Bezugsrahmen stützt sich auf die vorhandenen Netzmodelle und kombiniert die unterschiedlichen Netzeffekte und -merkmale. Die Bedeutung des Ansatzes wird am Beispiel von zwei wichtigen Fusionsfällen aufgezeigt (WorldCom-MCI und MSG), bei denen es sich jeweils um einen existierenden und einen entstehenden Markt handelt.

Competing for Ownership

We develop a tractable model of the allocation of ownership and control in firms in competitive markets that permits study of how the scarcity of assets in the market translates into control allocations inside the organization. The model identifies a price-like mechanism whereby local liquidity or productivity shocks propagate and lead to widespread organizational restructuring. Firms will be more integrated when the terms of trade are more favorable to the short side of the market, when liquidity is unequally distributed among existing firms and following a uniform increase in productivity. Shocks to the first two moments of the liquidity distribution have multiplier effects on the corresponding moments of the distribution of ownership.

Neighborhood Effects in Spatial Housing Value Models The Case of the Metropolitan Area of Paris (1999).

In hedonic housing models, the spatial dimension of housing values are traditionally processed by the impact of neighborhood variables and accessibility variables. In this paper we show that spatial effects might remain once neighborhood effects and accessibility have been controlled for. We notably stress on three sides of neighborhood effects: social capital, social status and social externalities and consider the accessibility to the primary economic center as describing the urban spatial trend. Using spatial econometrics specifications of the hedonic equation, we estimate whether spatial effects impact the housing values. Our empirical case concerns the Metropolitan Area (MA) of Paris in France which is divided in 2 636 neighborhood areas. We estimate the housing price distribution from a sample of 21,000 apartments sold in 1999. Our empirical results highlight the lumpy distribution of unit price along the general decreasing spatial trend from the Central Business District once neighborhood effects have been introduced. More precisely, a spatial error model is estimated revealing a positive and significance spatial effects across housing values which extend beyond their neighborhood area. Social capital, social status and social externalities play local role and may positively or negatively impact the housing prices. We showed a positive impact of diversified building patterns but a negative impact of social mixity which is somewhat conflictual but which is in fact in line with many current questions about social segregation and spatial segregation in urban areas.Hedonic model, housing value, neighborhood effects, spatial econometrics

French firms’ strategies for protecting their intellectual property.

In attempting to protect their innovations, firms can choose from a range of mechanisms, which may be either non-statutory (trade secrets, design complexity, and lead-time advantage over competitors) or statutory (patent, design registration, trademark, copyright). Yet, little is known about how firms do actually make their choices from among these different appropriability mechanisms. The aim of this paper is to determine how French firms’ use of intellectual property protection mechanisms relates to the type of innovation, the characteristics of the market sector in which they operate, the firms’ characteristics, and their human resources strategies. Our empirical model draws on four French databases covering the period 2001–2004. Our results show that the choice of a means of protection matters and emerges out of a complex strategy. Our results also reveal that the different statutory and non-statutory means of protection are complementary within their own categories but hardly so between categories.Intellectual property rights; Multivariate probit; Appropriability; Innovation; Human resources strategies;

Managerial Firms, Vertical Integration, and Consumer Welfare

We show that vertical integration decisions of managers may affect adversely consumers even in the absence of monopoly power in either supply or product markets. This effect is most likely to come about when demand is initially high and there is a negative supply shock or when demand is low and there is a positive demand shock. The results are robust to the introduction of active shareholders and to other extensions.

Innovation and training: a dynamic count data model.

This paper explores the relationship between innovation and vocational training. We consider a linear feedback model to explain the dynamics of count data processes relative to patenting activities, R&D and training expenditures. Estimations are made on a panel data set relative to French industrial rms over the period 1986-1992. Our results indicate that the vocational training have a positive impact on the technological innovation.count panel data; linear feedback model; patents; R&D; training;

Auditing and property rights

This is the official published version. Copyright @ 2004 RANDThird-party audit provides incentives to an agent whose actions affect the value of an asset. When audit intensity and outcome are unverifiable, we show that with interim-participation constraints the optimal mechanism may use only the auditor's report, disregarding the agent's information. Furthermore, the auditor obtains the asset and the agent a monetary compensation, when a high asset value is reported. This suggests regulating renewable resources or utility networks by giving entrants the option to buy the right to use the asset at a predetermined price, and financially rewarding incumbents for good performance.The second author used financial support of the Communaute francaise de Belgique (projet ARC 98/03-221) and EU TMR Network contract no. FMRX-CT98-0203

How to Win Twice at an Auction. On the Incidence of Commissions in Auction Markets

We analyze the welfare consequences of an increase in the commissions charged by the organizer of an auction. Commissions are similar to taxes imposed on buyers and sellers and the economic problem that results looks similar to the question of tax incidence in consumer economics. We argue, however, that auction markets deserve a separate treatment. Indeed we show that an increase in commissions makes sellers worse off, but some (or all) buyers may gain. The results are therefore strikingly different from the standard result that all consumers lose after a tax or a commission increase. We apply our results to comment on the class action against Christie’s and Sotheby’s and argue that the method used to distribute compensations was misguided.Auction, Intermediation, Commissions, Welfare

In situ TEM study of twin boundary migration in sub-micron Be fibers

Deformation twinning in hexagonal crystals is often considered as a way to palliate the lack of independent slip systems. This mechanism might be either exacerbated or shut down in small-scale crystals whose mechanical behavior can significantly deviate from bulk materials. Here, we show that sub-micron beryllium fibers initially free of dislocation and tensile tested in-situ in a transmission electron microscope (TEM) deform by a $\{ 10\bar{1}2 \}$ $\langle 10\bar{1}1 \rangle$ twin thickening. The propagation speed of the twin boundary seems to be entirely controlled by the nucleation of twinning dislocations directly from the surface. The shear produced is in agreement with the repeated lateral motion of twinning dislocations. We demonstrate that the activation volume ($V$) associated with the twin boundary propagation can be retrieved from the measure of the twin boundary speed as the stress decreases as in a classical relaxation mechanical test. The value of $V \approx 8.3 \pm 3.3 \times 10^{-29}m^3$ is comparable to the value expected from surface nucleation.Comment: 13 pages, 9 figure