Pitfalls in vertical arrangements

A popular way of obtaining essential inputs requires the establishment of an input production joint venture (IPJV) in the upstream (U) section of the vertical chain of production by firms competing and selling final goods in the downstream (D) section of the vertical chain. In spite of the apparently simple arrangement there are many possible governances for the management of the IPJV according to the ownership structure and to the degree of delegation granted to the IPJV by parent firms. We explore the best sustainable governance arrangement for the IPJV. We address this question in a duopoly framwork and we find a large area of impossible vertical arrangements associated with technological asymmtery. The most likely governance of the vertical arrangment associated to the IPJV is total independence.

Compatibility Choice in vertically differentiated technologies

We analyse firms’ incentives to provide two-way compatibility between two network goods with different intrinsic qualities. We study how the relative importance of vertical differentiation with respect to the network effect influences the price competition as well as the compatibility choice. The final degree of compatibility allows firms to manipulate the overall differentiation. Under weak network effect, full compatibility may arise : the low quality firm has higher incentives to offer it in order to prevent the rival from dominating the market. Under strong network effect we observe multiple equilibria for consumers’ demand. However, in any equilibrium of the full game, coordination takes place on the high quality good which, we assume, always maintains its overall quality dominance.compatibility, vertical differentiation, network effect

Verso il sistema unitario dei servizi per il lavoro = Towards the unitary system of employment services. WP C.S.D.L.E. “Massimo D’Antona”.IT – 351/2018

The development of employment services can be an important factor in supporting the labor market and economic recovery. The new organizational design of the role of public and private actors, introduced by Legislative Decree no. 150/2015, wants to support this development through the promotion of state and regional cooperation. The essay follows the plans of possible unitary work, highlighting the preconditions for the progressive unification of state and regional functions into a system logic. The talk about the organization is accompanied by the underlining of the renewed attention given to the unemployed citizen, whose order now reserves specific attention, a more defined lega

Market integration and network industries

What is the effect of product market integration on the market equilibrium in the presence of international externalities in consumption ? To address this question, we set up a spatial two-country model and we find that the economic forces at work may have an ambiguous effect on prices.compatibility; horizontal differentiation; network effect

Bargaining and delay in patent licensing

We consider a model of licensing of a non-drastic innovation in which the patent holder (an outside innovator) negotiates either up-front fixed fees or per-unit royal- ties with two firms producing horizontally differentiated brands and competing à la Cournot. We investigate how licensing schemes (fixed fee or per-unit royalty) and the number of licenses sold (exclusive licensing or complete technology diffusion) affect price agreements and delays in reaching an agreement. We show that the patent holder prefers to license by means of up-front fixed fees except if market competition is mild and the innovation size is small. Once there is private information about the relative bargaining power of the parties, the patent holder may prefer licensing by means of per-unit royalties even if market competition is strong. Moreover, the delay in reaching an agreement is greater whenever the patent holder chooses to negotiate up-front fixed fees instead of per-unit royalties.patent licensing, fixed fee, royalty, bargaining, private information

Input Production Joint Venture

In many industries it is quite common to observe firms delegating the production of essential inputs to independent ventures jointly established with competing rivals. The diffusion of this arrangement and the favourable stance of competition authorities call for the assessment of the social and private desirability of Input Production Joint Ventures (IPJV), which represent a form of input production cooperation, not investigated so far. IPJV can be seen as an intermediate organizational setting lying between the two extremes of vertical integration and vertical separation. Our investigation is based on an oligopoly model with horizontally differentiated goods. We characterize the conditions under which IPJV is privately optimal finding that firms’ incentives may be welfare detrimental. We also provide a rationale for the empirical relevance of IPJV both in terms of its ability to survive and in terms of disengagement incentives.Input Production Joint Venture, Horizontal Differentiation, Oligopoly

Multitemporal dendrogeomorphological analysis of slope instability in Upper Orcia Valley (Southern Tuscany, Italy)

The Upper Orcia Valley (Southern Tuscany, Italy) is a key site for the comprehension of denudation processes typically acting in Mediterranean badlands (calanchi) areas, thanks to the availability of long-lasting erosion monitoring datasets and the rapidity of erosion processes development. These features make the area suitable as an open air laboratory for the study of badlands dynamic and changes in geoheritage due to erosion (i.e. active geomorphosites). Decadal multitemporal investigations on the erosion rates and the geomorphological dynamics of the study area allowed to highlight a decrease in the average water erosion rates during the last 60 years. More in detail, a reduction of bare land and, consequently, of erosion processes effectiveness and a contemporary increasing frequency of mass wasting events were recorded. These trends can be partly related to the land cover changes occurred in the study area from the 1950s onwards, which consist of the significant increase of reforestation practices and important other forms of human impacts on slopes, mainly land levelling for agricultural exploitation. In order to better identify the most significant phases of geomorphological instability occurred in this area during the last decades, an integrated approach based on multitemporal geomorphological mapping and dendrogeomorphology analysis on specimen of Pinus nigra Arn. was used. In detail, trees colonizing a denudation slope located in the surrounding of the Radicofani town (Tuscany, Italy) and characterized by calanchi and shallow mass movements deposits, were analyzed for the 1985-2012 time period. The analysis of the growth anomaly indexes and of compression wood allowed to determine a spatio-temporal differentiation along the slope and respect to an undisturbed reference site. The negative anomaly index results to be more pronounced in the trees located on the investigated slope with respect to the ones sampled in a non-disturbed area. Compression wood characterizes trees on slope sectors mainly affected by runoff and/or mass movements with a different persistence. Erosion rates were finally calculated through dendrogeomorphological analysis on tree roots exposure (0.31-3 cm/y runoff prevailing; 5.86-27.5 cm/y, mass movements prevailing). Dendrogeomorphological results are in accordance with those obtained in the investigated areas with multitemporal photogrammetric and geomorphologic analyses

Compatibility choice in vertically differentiated technologies

We analyse firms' incentives to provide two-way compatibility between two network goods with different intrinsic qualities. We study how the relative importance of vertical differentiation with respect to the network effect influences the price competition as well as the compatibility choice. The final degree of compatibility allows firms to manipulate the overall differentiation. Under weak network effect, full compatibility may arise: the low quality firm has higher incentives to offer it in order to prevent the rival from dominating the market. Under strong network effect we observe multiple equilibria for consumers' demands. However, in any equilibrium of the full game, coordination takes place on the high quality good which, we assume, always maintains its overall quality dominance.compatibility, vertical differentiation, network effect.

Market integration in network industries

What is the effect of product market integration on the market equilibrium in the presence of international network externalities in consumption? To address this question, we set up a spatial two-country model and we find that the economic forces at work may have an ambiguous effect on prices.compatibility, horizontal differentiation, network effect