In this study a macro model is outlined in which noncompetitive as well as competitive product price behaviour can be incorporated and the macro implications compared. A variety of non-competitive pricing models are considered and on the basis of these (and in conjunction with a chapter linking the micro to the macro analysis), it is argued that non-competitive pricing is potentially important in a macro model. It can generate macro relative share, price, and output behaviour different from that generated by price - equals - marginal cost competitive behaviour. In the empirical investigations of Canadian manufacturing industries, evidence of non-competitive price behaviour is found. The pro-cyclical standard competitive behaviour of gross-margins (mark-ups on variable costs) is not generally observed. Combining the theoretical with the empirical results, it is concluded that non-competitive pricing is not only potentially important, but of actual importance because of the empirical significance of non-competitive price behaviour. The importance of this for macro policy is briefly considered in the final chapter. / Arts, Faculty of / Vancouver School of Economics / Graduate

The current Internet is a hierarchical architecture comprising heterogeneous entities of privately owned infrastructures, where higher tier Internet service providers (ISPs) supply connectivity to the lower tier ISPs and charge them for the transit service. One of the most challenging problems service providers facing today is how to increase the profitability while maintaining good service qualities as the network scales up. For the higher tier ISPs, the main concern is how to increase the profit by attracting more lower tier ISPs (or traffic), while the lower tier ISPs concern about the connectivity, quality of service as well as the cost of the transit service. In this thesis, we seek to understand the interaction between different hierarchies of ISPs. Note that the lower tier ISPs can transmit traffic to each other, either by purchasing the service from higher tier ISPs, or by setting "private peering links" between themselves. Higher tier ISPs, on the other hand, cannot charge the transit service at will since there is competition among higher tier ISPs. We model the interaction of these ISPs via a game theoretic approach. Under this competitive framework, we study the issues of (a) impact of private peering relationship among the lower tier ISPs, (b) resource allocation of the higher tier ISPs so that resource monopoly can be avoided, (c) under a competitive market, how can the higher tier ISPs perform revenue maximization, and (d) conditions wherein higher tier ISPs are willing to perform network upgrade when we scale up the network size. We divide the above investigation into single higher tier ISP and multiple higher tier ISPs scenarios. In each scenario, firstly, a generalized model is presented to characterize the behaviors of the lower tier and higher tier ISPs, in which their economic interests are reflected. We study how a lower tier ISP can distributively determine its optimal routing strategy. Furthermore, we show how a higher tier ISP is able to utilize the available information to infer its optimal pricing strategy, under which a revenue maximization is achieved. Two distributed algorithms are proposed to help them to provide a fair and efficient bandwidth allocation to lower tier ISPs. Last but not least, we investigate the above issues in a many-ISPs-regime, i.e. we scale up the network size. Our mathematical framework provides insights on the interaction among ISPs and show these ISPs can still gain profits as they upgrade the network infrastructures. Extensive simulations are carried out to quantify and support our theoretical claims. / Lee Cheuk Man. / "February 2008." / Adviser: John C. S. Lui. / Source: Dissertation Abstracts International, Volume: 69-08, Section: B, page: 4849. / Thesis (Ph.D.)--Chinese University of Hong Kong, 2008. / Includes bibliographical references (p. 104-109). / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. [Ann Arbor, MI] : ProQuest Information and Learning, [200-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstracts in English and Chinese. / School code: 1307.

Keywords. Competitive strategy, Supply chain strategy, Leanness, Agility, Environmental uncertainty, Moderator, Cumulative model. / Supply chain management has become one of the most popular approaches to enhance the global competitiveness of business corporations today. Thus, it has received more and more attention from practitioners and the academia. However, how to effectively manage the flow of materials from supply sources to the ultimate customer represents a major challenge for today's managers. From the viewpoint of business competition, Porter (1980) identified three general types of strategies, i.e., overall cost leadership, differentiation, and focus. This research tries to make an extension of this typology from an angle of supply chain management. Two general supply chain strategies including leanness and agility are identified in this study. / This research is composed of three studies. Study 1 makes a contribution to investigate the moderating effect of environmental uncertainty on the relationship between competitive strategy and supply chain strategy, and between supply chain strategy and financial performance. The findings prove that environmental uncertainty works as a homologizer in the proposed framework. Using multiple group structural equation analysis, the different strengths of the impact of competitive strategy on supply chain strategy and that of supply chain strategy on financial performance are identified. Study 2 tests the validity of the matrix proposed by Fisher (1997) and Christopher (2000) in which the relationship between product characteristics and supply chain structure is proposed. The findings show that the functional product needs a higher level of the use of the lean supply chain, while innovative products need a higher level of the use of the agile or leagile supply chain. The regression results demonstrate that the match between product characteristics and supply chain strategy indeed lead to higher performance. Finally, study 3 identifies several supply chain management practices through a thorough literature review of about 300 academic papers and classifies them into eight bundles. Based on Ferdows and De Meyer (1990)'s cumulative model, we propose that lean manufacturers should focus on such practices that help them build lean capabilities, and agile manufacturers need to build lean capabilities first before pursuing agility. / Qi Yinan. / "May 2006." / Adviser: Xiande Zhao. / Source: Dissertation Abstracts International, Volume: 68-02, Section: A, page: 0644. / Thesis (Ph.D.)--Chinese University of Hong Kong, 2006. / Includes bibliographical references (p. 175-187). / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. [Ann Arbor, MI] : ProQuest Information and Learning, [200-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstracts in English and Chinese. / School code: 1307.

Spatial competition, in the context of industry-wide changes in retailing formats and strategies, is addressed in this dissertation from a theoretical modelling perspective. Chapter2 develops a normative individual choice model to explore how "power retailers" affect grocery shopping behaviour, and, consequently, market share. Power retailers are very large retail outlets that compete primarily on price, and are known variously as warehouse clubs, category killers, and superstores. The model shows that consideration of consumer stockpiling can lead to an "increasing returns" nonlinear response of market share to price reductions, and that the effect is not noticeable when competitors have small price differences. The model also differentiates between perishable and nonperishable goods, and shows that this may drive planned multistore shopping. Chapter 3 starts with the observation that competent management in many sectors of retailing, including grocery retailing, requires an ability to respond quickly and effectively to unexpected adversity. This dynamic is included in an oligopolistic spatial interaction model, and the system is shown to evolve to a novel and robust stochastic steady state known as self-organized criticality (SOC). One characteristic of the SOC state is that it allows small exogenous shocks to produce large responses at a rate greater than would be expected if the law of large numbers applied. This work represents the first known investigation of SOC in a marketing setting.

Spatial competition, in the context of industry-wide changes in retailing formats and strategies, is addressed in this dissertation from a theoretical modelling perspective. Chapter2 develops a normative individual choice model to explore how "power retailers" affect grocery shopping behaviour, and, consequently, market share. Power retailers are very large retail outlets that compete primarily on price, and are known variously as warehouse clubs, category killers, and superstores. The model shows that consideration of consumer stockpiling can lead to an "increasing returns" nonlinear response of market share to price reductions, and that the effect is not noticeable when competitors have small price differences. The model also differentiates between perishable and nonperishable goods, and shows that this may drive planned multistore shopping. Chapter 3 starts with the observation that competent management in many sectors of retailing, including grocery retailing, requires an ability to respond quickly and effectively to unexpected adversity. This dynamic is included in an oligopolistic spatial interaction model, and the system is shown to evolve to a novel and robust stochastic steady state known as self-organized criticality (SOC). One characteristic of the SOC state is that it allows small exogenous shocks to produce large responses at a rate greater than would be expected if the law of large numbers applied. This work represents the first known investigation of SOC in a marketing setting. / Business, Sauder School of / Graduate

Japan has experienced a prolonged stagnation since bursting the asset market bubble early in the 1990's. It is very important to understand the underlying problems in order to find a remedy to escape this stagnation. This thesis aims to theoretically analyse the current Japanese economy, especially from the viewpoint of multiple equilibria. According to this view, the same fundamentals can yield a multiple outcome depending on history or expectations. This thesis argues that Japan's situation can be regarded as a bad equilibrium which has been provoked by wide-spread pessimism and a bubble collapse. Three chapters independently attempt to construct theoretical models describing the current Japanese situation. Chapter 2 demonstrates that demand externalities yield multiple equilibria. In a bad equilibrium, firms dare not participate in trade, which causes aggregate demand and welfare to decrease. A global games approach then illustrates how equilibrium is selected. Chapter 3, with the objective of seeing if Japan's depression was provoked by the misconduct of monetary policy, investigates the relation between indeterminacy and a monetary policy rule using a sticky price and firm-specific investment model. The standard Taylor principle is shown to be almost sufficient to eliminate indeterminacy, which suggests that the Bank of Japan did not exacerbate the economy while interest rate rules functioned, that is, until 1999. Chapter 4 focuses on a zero nominal interest rate bound, which has been observed since 1999. The ineffectiveness of the monetary policy yields a bad short-run outcome where real economic activity and asset prices become lower. There are long-run multiple equilibria in this story, and that is our explanation for the problem. Within this model, however, our .analysis does not justify a claim that a zero bound for the interest rate causes a long-run equilibrium to be a bad one.

Po-yan Chiu. / Thesis (M.Phil.)--Chinese University of Hong Kong, 1998. / Includes bibliographical references (leaves 83-86). / Abstract also in Chinese. / Abstract --- p.i / Acknowledgements --- p.iv / List of Figures --- p.vi / Chapter Chapter 1. --- Introduction --- p.1 / Chapter Chapter 2. --- Literature Review --- p.7 / Chapter 2.1 --- Monopolistic Competition and Policy Intervention --- p.7 / Chapter 2.2 --- Policy Interventions in Monetary Economies --- p.17 / Chapter Chapter 3. --- The Model --- p.19 / Chapter 3.1 --- Commodities --- p.19 / Chapter 3.2 --- Demands --- p.20 / Chapter 3.3 --- Equilibrium --- p.21 / Chapter 3.4 --- Open Economy --- p.24 / Chapter Chapter 4. --- Optimal Production Taxation --- p.28 / Chapter Chapter 5. --- Welfare Effect of Trade and the Optimal Tariff --- p.34 / Chapter 5.1 --- Welfare Effect of Trade --- p.34 / Chapter 5.2 --- Optimal Import Tariff --- p.38 / Chapter Chapter 6. --- Consumption Tax --- p.52 / Chapter 6.1 --- Closed Economy --- p.53 / Chapter 6.2 --- Open Economy --- p.55 / Chapter 6.3 --- Welfare Effects of Trade under Different Policies --- p.56 / Chapter Chapter 7. --- Concluding Remarks --- p.62 / Appendix --- p.65 / References --- p.83

Lam, Wing Tung. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2011. / Includes bibliographical references (leaves 43-45). / Abstracts in English and Chinese. / Chapter 1. --- Introduction --- p.1 / Chapter 2. --- Literature Review --- p.3 / Chapter 3. --- Model Setting --- p.8 / Chapter 4. --- Equilibria of Price Competition --- p.12 / Chapter 5. --- Equilibrium number of outlets --- p.20 / Chapter 5.1 --- Equilibrium number of outlets when almost all consumers are naive --- p.22 / Chapter 5.2 --- Equilibrium number of outlets when almost all consumers are sophisticated --- p.23 / Chapter 6. --- Incentive for Obfuscation --- p.26 / Chapter 7. --- Conclusions --- p.27 / Chapter A. --- Appendix --- p.28 / Chapter A.1 --- An Example of Equilibrium with a Disproportional Pricing Strategy --- p.28 / Chapter A.2 --- An Example in which a Pure Strategy Equilibrium does not exist for Stage 1 --- p.29 / Chapter A.3 --- Formal Proofs --- p.31

This dissertation develops variants of the well-known Hotelling’s location model to examine the nature of competition in the audit market where audit firms make strategic specialization and pricing decisions. In a multi-period spatial oligopoly model of auditing competition, audit firms obtain market power through their service specialization with respect to client characteristics relevant to audit production. This market power allows audit firms to price discriminate among clients. Competition among audit firms is localized: an audit firm optimally charges a client, to whom it has the lowest auditing cost to serve, the marginal auditing cost of the second lowest-cost audit firm. These equilibrium audit firms’ pricing strategies result in an allocation of clients’ surplus and audit firms’ profits that lies in the core of the economy. The existence of a specialization-pricing equilibrium is also established. In equilibrium, given its rivals’ specializations, each audit firm’s profit is maximized by choosing a specialization that maximizes the social welfare (the sum of clients’ surplus and audit firms’ profits). Moreover, audit firms never choose the same specialization in equilibrium. Instead, in order to earn rents as ‘local monopolists’, audit firms differentiate themselves from each other. This result is consistent with a widely held notion that audit firms search for ‘niche’ markets, such as industry specialization, to increase their profits. The dissertation then focuses on a two-period spatial duopoly model in which the market power created by audit firm specialization is now further fortified by the presence of auditors’ learning and clients’ switching costs. In this case, audit firms optimally price discriminate among clients by offering them ‘specialization-and-relationship-specific’ audit fee schedules. The practice of ‘low-balling’ is found to be a natural consequence of the competition among audit firms. However, low-balling occurs only in a certain market segment where audit firms compete quite fiercely. The analysis also demonstrates how equilibrium audit fee schedules, audit firms’ specializations and profits, clients’ surplus, and social welfare depend on the auditing costs, the learning rate, and the switching costs. Some interesting policy implications are illustrated. Finally, the model is used to analyze the impact of banning audit firms from the practice of low-balling. It is demonstrated that even though a policy of banning low-balling always reduces competition, it improves social efficiency in some cases.

This dissertation develops variants of the well-known Hotelling’s location model to examine the nature of competition in the audit market where audit firms make strategic specialization and pricing decisions. In a multi-period spatial oligopoly model of auditing competition, audit firms obtain market power through their service specialization with respect to client characteristics relevant to audit production. This market power allows audit firms to price discriminate among clients. Competition among audit firms is localized: an audit firm optimally charges a client, to whom it has the lowest auditing cost to serve, the marginal auditing cost of the second lowest-cost audit firm. These equilibrium audit firms’ pricing strategies result in an allocation of clients’ surplus and audit firms’ profits that lies in the core of the economy. The existence of a specialization-pricing equilibrium is also established. In equilibrium, given its rivals’ specializations, each audit firm’s profit is maximized by choosing a specialization that maximizes the social welfare (the sum of clients’ surplus and audit firms’ profits). Moreover, audit firms never choose the same specialization in equilibrium. Instead, in order to earn rents as ‘local monopolists’, audit firms differentiate themselves from each other. This result is consistent with a widely held notion that audit firms search for ‘niche’ markets, such as industry specialization, to increase their profits. The dissertation then focuses on a two-period spatial duopoly model in which the market power created by audit firm specialization is now further fortified by the presence of auditors’ learning and clients’ switching costs. In this case, audit firms optimally price discriminate among clients by offering them ‘specialization-and-relationship-specific’ audit fee schedules. The practice of ‘low-balling’ is found to be a natural consequence of the competition among audit firms. However, low-balling occurs only in a certain market segment where audit firms compete quite fiercely. The analysis also demonstrates how equilibrium audit fee schedules, audit firms’ specializations and profits, clients’ surplus, and social welfare depend on the auditing costs, the learning rate, and the switching costs. Some interesting policy implications are illustrated. Finally, the model is used to analyze the impact of banning audit firms from the practice of low-balling. It is demonstrated that even though a policy of banning low-balling always reduces competition, it improves social efficiency in some cases. / Business, Sauder School of / Accounting, Division of / Graduate