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Trust In Cohesive Communities, Felipe Balmaceda Assoc Prof., Juan Escobar Assistant Professor
Trust In Cohesive Communities, Felipe Balmaceda Assoc Prof., Juan Escobar Assistant Professor
Felipe Balmaceda
This paper studies which social networks maximize trust and welfare when agreements are implicitly enforced. We study a repeated trust game in which trading opportunities arise exogenously and a social network determines the information each player has. We show that cohesive communities, modeled as social networks of complete components, emerge as the optimal community design. Cohesive communities generate some degree of common knowledge of transpired play that allows players to coordinate their punishments and, as a result, yield relatively high equilibrium payoffs. We also show that when news swiftly travel through the network, Pareto efficient networks are minimally connected: the …
Competitive Intensity And Its Two-Sided Effect On The Boundaries Of Firm Performance, Joao Montez, Francisco Ruiz-Aliseda, Michael D. Ryall
Competitive Intensity And Its Two-Sided Effect On The Boundaries Of Firm Performance, Joao Montez, Francisco Ruiz-Aliseda, Michael D. Ryall
Michael D Ryall
The new perspective emerging from strategy's value-capture stream is that the effects of competition are two-fold: competition for an agent bounds its performance from below, while that for its transaction partners bounds from above. Thus, assessing the intensity of competition on either side is essential to understanding firm performance. Yet, the literature provides no formal notion of "competitive intensity" with which to make such assessments. Rather, some authors use added value as their central analytic concept, others the core. Added value is simple, but misses the crucial, for-an-agent side of competition. The core is theoretically complete, but difficult to interpret …
Research And Development Cooperatives And Market Collusion: A Global Dynamic Approach, Jeroen Hinloopen, Grega Smrkolj, Florian Wagener
Research And Development Cooperatives And Market Collusion: A Global Dynamic Approach, Jeroen Hinloopen, Grega Smrkolj, Florian Wagener
Jeroen Hinloopen
We present a continuous-time generalization of the seminal research and development model of d’Aspremont and Jacquemin (Am Econ Rev 78(5):1133–1137, 1988) to examine the trade-off between the benefits of allowing firms to cooperate in research and the corresponding increased potential for product market collusion. Weshow the existence of a solution to the optimal investment problem using a combination of results from viscosity theory and the theory of planar dynamical systems. In particular, we show that there is a critical level of marginal cost at which firms are indifferent between doing nothing and starting to develop the technology.We findthat colluding firms …