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The purpose of this thesis is to investigate the competition structure in the market for crossing Øresund and which price setting techniques are used. The results show that the market for crossing Øresund Bridge is monopolistically competitive market. While Øresund Bridge can in some cases be seen as a monopoly. Furthermore the results show how the firms that are operating in the market offer their consumers various pricing schedules to self-select from. The results based upon the information collected found that Øresund Bridge uses price discriminatory pricing schedules such as two-part tariff, quantity discount and peak-load pricing. According to the theory of price discrimination the firm needs to have market power in order to price discriminate and it is found that Øresund Bridge have a market share of 76%. The negative consequences of price discrimination in the particular market can mostly be seen in the ferry market where the two largest firms have to start collaborating in order to sustain as a part of the market. The positive consequences is found to be that a wider range of consumer groups are able to travel over Øresund due to the extensive range of different prices offered by the market operators.

Chapter 1: Downstream Competition and the Effects of Buyer Power The first chapter examines the interaction between buyer power and competition intensity in the downstream market in affecting consumer and total welfare. We study a model where oligopolistic retailers compete in quantity in the downstream market and one of them is a large retailer that has its own exclusive supplier. Negotiation between this retailer and its supplier is modeled as a generalized Nash bargaining game. We demonstrate that an increase in the buyer power of the large retailer against its supplier leads to a fall in retail price and consequently an improvement in consumer surplus and this is true even in the extreme case where the downstream market is served by a monopoly. More interestingly, we find that the effects of buyer power are large when the intensity of downstream competition is low, with the effects being the largest in the case of downstream monopoly. This suggests that buyer power and downstream competition are substitutes. Chapter 2: Subsidy, Product Diversity and Buyer Power The objective of the second chapter is to analyze the effectiveness of government subsidies in promoting product diversity when the downstream firm (a retailer) has buyer power. We extend the standard Dixit-Stiglitz model of monopolistic competition and compare the effects of subsidies on equilibrium number of product varieties and social welfare in the case where products are sold directly to consumers and the case where they are sold through a monopoly retailer with buyer power. Two types of subsidies are considered, a subsidy on marginal cost and a subsidy on fixed cost. We find that while the two types of subsides have different effects on the quantity and retail price of each variety, they both raise the number of product varieties and the social welfare. Moreover, a combination of the two types of subsidies is able to achieve the social optimum. These results are true even when products are distributed through a downstream monopoly retailer who has all the bargaining power, but the mechanism through which a subsidy increases product varieties is different. In comparison with the case where products are distributed directly to consumers, retailer buyer power reduces product variety and social welfare. Furthermore subsidies become less effective in the presence of buyer power. To be more specific, retailer buyer power has both a level effect and a marginal effect on product diversity. At any given subsidy rate, the equilibrium number of varieties is smaller and a marginal increase in subsidy leads to a smaller increase in the number of varieties. Chapter 3: Subsidy on Complementary Products in a Model of Monopolistic Competition The third chapter seeks to re-examine the market provision of product diversity under monopolistic competition and the effects of an infinitesimal subsidy on product variety and social welfare in the case of complementary products. This examination builds on the standard Dixit-Stiglitz model of monopolistic competition but assumes an alternative demand linkage. The results show that, different from the case of substitutable products, demand complementarity leads to multiple equilibriums and the number of product varieties could be higher or lower than the constrained optimum depending on the level of the fixed cost of production. When the fixed costs are small, the market yields too many products and an infinitesimal subsidy exacerbates the problem leading to an over-supply of product varieties. On the other hand, when the fixed costs are large, there are too few products and in some cases the complementary goods industry becomes non-existent. A subsidy that induces a switch of equilibriums enhances product variety and improves social welfare.

Chapter 1: Downstream Competition and the Effects of Buyer Power The first chapter examines the interaction between buyer power and competition intensity in the downstream market in affecting consumer and total welfare. We study a model where oligopolistic retailers compete in quantity in the downstream market and one of them is a large retailer that has its own exclusive supplier. Negotiation between this retailer and its supplier is modeled as a generalized Nash bargaining game. We demonstrate that an increase in the buyer power of the large retailer against its supplier leads to a fall in retail price and consequently an improvement in consumer surplus and this is true even in the extreme case where the downstream market is served by a monopoly. More interestingly, we find that the effects of buyer power are large when the intensity of downstream competition is low, with the effects being the largest in the case of downstream monopoly. This suggests that buyer power and downstream competition are substitutes. Chapter 2: Subsidy, Product Diversity and Buyer Power The objective of the second chapter is to analyze the effectiveness of government subsidies in promoting product diversity when the downstream firm (a retailer) has buyer power. We extend the standard Dixit-Stiglitz model of monopolistic competition and compare the effects of subsidies on equilibrium number of product varieties and social welfare in the case where products are sold directly to consumers and the case where they are sold through a monopoly retailer with buyer power. Two types of subsidies are considered, a subsidy on marginal cost and a subsidy on fixed cost. We find that while the two types of subsides have different effects on the quantity and retail price of each variety, they both raise the number of product varieties and the social welfare. Moreover, a combination of the two types of subsidies is able to achieve the social optimum. These results are true even when products are distributed through a downstream monopoly retailer who has all the bargaining power, but the mechanism through which a subsidy increases product varieties is different. In comparison with the case where products are distributed directly to consumers, retailer buyer power reduces product variety and social welfare. Furthermore subsidies become less effective in the presence of buyer power. To be more specific, retailer buyer power has both a level effect and a marginal effect on product diversity. At any given subsidy rate, the equilibrium number of varieties is smaller and a marginal increase in subsidy leads to a smaller increase in the number of varieties. Chapter 3: Subsidy on Complementary Products in a Model of Monopolistic Competition The third chapter seeks to re-examine the market provision of product diversity under monopolistic competition and the effects of an infinitesimal subsidy on product variety and social welfare in the case of complementary products. This examination builds on the standard Dixit-Stiglitz model of monopolistic competition but assumes an alternative demand linkage. The results show that, different from the case of substitutable products, demand complementarity leads to multiple equilibriums and the number of product varieties could be higher or lower than the constrained optimum depending on the level of the fixed cost of production. When the fixed costs are small, the market yields too many products and an infinitesimal subsidy exacerbates the problem leading to an over-supply of product varieties. On the other hand, when the fixed costs are large, there are too few products and in some cases the complementary goods industry becomes non-existent. A subsidy that induces a switch of equilibriums enhances product variety and improves social welfare.

京都大学 / 0048 / 新制・課程博士 / 博士(経済学) / 甲第18753号 / 経博第504号 / 新制||経||272(附属図書館) / 31704 / 京都大学大学院経済学研究科経済学専攻 / (主査)教授 柴田 章久, 教授 佐々木 啓明, 教授 神事 直人 / 学位規則第4条第1項該当 / Doctor of Economics / Kyoto University / DGAM

We consider the problem of capacity expansion in telecommunication networks under uncertain economic conditions with various market structures. We assume that the demands for network capacity have constant price-elasticity, and demand functions are parameterized by an economic condition that is modeled by a discrete time Markov process. We apply dynamic programming to obtain a state-dependent capacity expansion strategy that maximizes expected total discounted cash flow. We incorporate partial reversibility of investment by differentiating the purchasing cost and the salvage value of the capacity. This partial reversibility makes the value function non-differentiable and divides the solution space into BUY, KEEP, and SELL regions. By identifying certain structural properties of the optimal solution, we perform sensitivity analyses on the optimal investment decisions with respect to market parameters. Under the condition that the level of cost depreciation is larger than that of the downside movement of the economic condition in each time period, we are able to obtain an analytical expression for the optimal capacity level and reduce the multi-period investment decision problem into a single-period myopic problem. As a result, optimal capacity increment depends only on the current economic condition. We study this problem under both monopolistic and oligopolistic market structures. In particular, we investigate investment decisions by two firms in a duopoly setting with Cournot competition. We prove the existence and the uniqueness of the Cournot equilibrium strategies in the duopolistic capacity investment problem. In addition, we show how competition between firms affects total available capacity in the market, capacity price, consumer surplus, expected time to a certain level of price reduction, and expected time to the first investment. We perform an empirical analysis to test a theoretical prediction obtained from our model through linear regression utilizing historical market data. By examining several alternative indices as a proxy to the economic condition considered in our model, we show that the Civilian Employment is the best proxy to use in validating the linear relationship between telecommunications capacity expansion and the economic indicator.

En économie, l'analyse de la concurrence entre les firmes est d'une importance capitale. Cette thèse examine les interactions stratégiques sur les marchés différenciés en équilibre général tout en proposant les politiques publiques à mettre en œuvre afin de réduire les distorsions dues aux comportements imparfaits des firmes. La thèse prend en compte la différenciation des produits afin d'aboutir à de nouvelles conclusions ou d'étendre celles existantes et mises en avant dans la littérature. Elle vise ainsi, principalement deux objectifs. En premier lieu, la construction d'un modèle de concurrence imparfaite sur les marchés différenciés et ceci dans un cadre d'analyse en équilibre général. En second lieu, l'évaluation des conséquences du modèle en termes de politiques économiques. Les travaux ont débuté par une revue de littérature où sont abordés successivement les mécanismes de prix dans les jeux stratégiques de marché, les concepts de différenciation des produits et les modèles de théorie des jeux traitant des interactions stratégiques en équilibre général afin de modéliser les comportements imparfaitement concurrentiels. Le chapitre 2 a ainsi conduit au concept d'équilibre Cournot-Walras symétrique sur les marchés différenciés. Pour prendre en compte la différenciation des produits, il est affecté à chaque agent économique un vecteur fini de coefficients de différenciation qui exprime la préférence de l'agent pour la diversité. A la suite du modèle de différenciation, le chapitre 3 propose des mécanismes de politiques fiscales afin de réguler les pertes dues aux comportements imparfaits des firmes. Des exemples illustrent que le modèle de différenciation admet un équilibre trivial qui est nice et les prix et les allocations de l'équilibre Cournot-Walras symétrique sur produit différencié, sous certaines conditions, convergent vers l'équilibre walrasien. / In economy, the competition analysis among firms have a significance importance because of the complexity of some elements. This thesis examines the strategic interactions on differentiated markets in general equilibrium while proposing the public policies to reduce the distortions due to the imperfect behaviors. This thesis takes into account the differentiation of products in order to obtain the new conclusions and/or to extend those existing. We thus pursues two objectives. Fisrt, the construction of a model of imperfect competition on differentiated markets in a general equilibrium framework. Second, the evaluation of the consequences of the model in terms of economic policies. At beginning, we use literature review to tackle successively price mechanisms in strategic market games, product differentiation concepts and game theory models dealing with strategic interactions in order to model imperfect behaviors. This led in chapter 2 to the symmetric Cournot-Walras equilibrium concept on differentiated markets where we assign to each economic agent a finite vector of differentiation coefficients which expresses the agent's love for diversity. Following the differentiation model, chapter 3 offers tax policy mechanisms to control losses due to perfect behavior of firms. From the analysis, it appears that some examples illustrate that the differentiation model admits a trivial equilibrium which is nice and the price and allocations of symmetrical Cournot-Walras equilibrium on differentiated product, under certain conditions, converge towards the Walrasian ones.