Separate essays on entrepreneurship, joint venturing, and trade comprise this thesis.
The emergence of entrepreneurship is common in the real world but relatively less so in classical
economic models. If industry incumbents are attributed with full rationality and perfect foresight,
then there are few, if any, profitable opportunities left for new entrants (entrepreneurs) to
exploit. This essay explains how entrepreneurs can emerge in a dynamic world when firms must
choose between a technology strategy that is either statically or dynamically efficient. A model
is developed which shows how such opportunities for new entry can occur when incumbents are
caught in a Prisoners’ Dilemma game involving technology strategy. A relevance measure and
policy implications are then explored.
Joint ventures, especially of the R&D type, are becoming increasingly important as a way to
gain needed technological and market competencies. Unfortunately, many joint ventures have
the characteristics of a Prisoners’ Dilemma. Firms may cooperate or defect in the venture. If
contracts, side-payments, and third-party verification of the venture outcome are unavailable,
then the dominant solution to the Prisoners’ Dilemma (mutual defection) results. This paper
proposes the use of an ex-ante auction to obtain a Pareto-improvement for these ventures. A
Pareto-improvement is assured when non-transferable costs and benefits of firms are not
conditional on joint venture strategies. When this condition is not met restrictions are required
to obtain the Pareto-improvement.
The problem of trade between countries that share an international open access resource is
becoming significant as the world reaches the limits of critical shared resource stocks. It is
modelled as a world with one primary factor, two intermediate goods, one final good (harvested
from the open access resource), and two nations where it is assumed that either the trading takes
place over one stage (nations are price-takers), or two stages (nations have market power).
Imperfect competition and open access generated externalities affect the trading efficiency. To
maximize world welfare this essay recommends subsidizing R&D where comparative advantage
exists, and creating international agreements to ensure the one-stage game structure is used when
trading. / Business, Sauder School of / Graduate
| Identifer | oai:union.ndltd.org:UBC/oai:circle.library.ubc.ca:2429/7162 |
| Date | 11 1900 |
| Creators | Arend, Richard James |
| Source Sets | University of British Columbia |
| Language | English |
| Detected Language | English |
| Type | Text, Thesis/Dissertation |
| Format | 4589098 bytes, application/pdf |
| Rights | For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use. |
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