Open Access. Powered by Scholars. Published by Universities.®
- Discipline
- Keyword
-
- Business cycle (1)
- Competition (1)
- Dynamic Models (1)
- Economic development (1)
- Endogenous Ordering (1)
-
- Energy (1)
- Energy price shock (1)
- Free entry (1)
- General equilibrium (1)
- Healthcare market. (1)
- Heterogeneous firms (1)
- Information Cascade (1)
- Inventories (1)
- Lumpy investment (1)
- MRI industry (1)
- Nonlinear Pricing (1)
- Productivity differences (1)
- Stages of diversification (1)
- Structural transformation (1)
- Two-sector model (1)
- Vertical Relationships (1)
- Vertical relationship (1)
Articles 1 - 6 of 6
Full-Text Articles in Industrial Organization
Free Entry And Social Inefficiency In Vertical Relationships: The Case Of The Japanese Mri Industry, Ken Onishi, Naoki Wakamori, Chiyo Hashimoto, Shun-Ichiro Bessho
Free Entry And Social Inefficiency In Vertical Relationships: The Case Of The Japanese Mri Industry, Ken Onishi, Naoki Wakamori, Chiyo Hashimoto, Shun-Ichiro Bessho
Research Collection School Of Economics
This paper quantifies the welfare consequences of the medical arms race in the context of MRI adoption. We build and estimate a model of the vertical structure of the industry where MRI manufacturers sell high- and low-quality MRIs in the upstream market, whereas medical institutions provide medical services to patients in the downstream market. Simulation results suggest that the current free-entry policy in Japan leads to excess MRI adoption. Furthermore, regulating medical institutions’ MRI adoption, taxing MRI purchases, or softening competition among MRI manufacturers would increase social welfare substantially by mitigating the business-stealing effect in the downstream market.
Lumpy Investment, Lumpy Inventories, Ruediger Bachmann, Lin Ma
Lumpy Investment, Lumpy Inventories, Ruediger Bachmann, Lin Ma
Research Collection School Of Economics
The link between the microenvironment (frictions and heterogeneity) and the macroeconomic dynamics of general equilibrium macromodels is influenced by exactly how general equilibrium closes the model. We make this observation concrete using the recent literature on how nonconvex capital adjustment costs influence aggregate investment dynamics. We introduce inventories into a two-sector lumpy investment model and find that nonconvex capital adjustment costs dampen and propagate investment impulse responses, more so than without inventories. With two means of transferring consumption into the future, fixed capital and inventories, the tight link between aggregate saving and fixed capital investment is broken.
Productivity Growth And Structural Transformation, Roberto Samaniego, Juliana Y. Sun
Productivity Growth And Structural Transformation, Roberto Samaniego, Juliana Y. Sun
Research Collection School Of Economics
Economies diversify and then re-specialize as they develop. These “stages of diversification” may result from productivity-driven structural change if initially resources are concentrated in industries other than those that dominate economic structure in the long run. A calibrated multi-industry growth model with many countries and with industry differences in productivity growth rates replicates the main features of the “stages of diversification”. We also present evidence that countries systematically shift resources towards manufacturing industries with rapid productivity growth, and towards sectors with low productivity growth, consistent with the model and supporting the “productivity mechanism” for structural transformation.
Macroeconomic Effects Of Energy Price Shocks On The Business Cycle, Bao Tan Huynh
Macroeconomic Effects Of Energy Price Shocks On The Business Cycle, Bao Tan Huynh
Research Collection School Of Economics
This paper proposes a framework of endogenous energy production with convex costs to investigate the general equilibrium effects of energy price shocks on the business cycle. This framework explicitly models the consumption of durables and nondurables and implements a high complementarity between energy and the usage of durables and capital. The model predicts energy price elasticities of various consumption variables that fall within reasonable agreement with empirical estimates. Convex costs in energy production produce energy price and energy supply dynamics that tallies well with empirical behavior. Our analysis confirms in a theoretical setting recent observations that not all energy price …
Quantity Discounts And Capital Misallocation In Vertical Relationships, Ken Onishi
Quantity Discounts And Capital Misallocation In Vertical Relationships, Ken Onishi
Research Collection School Of Economics
I study transactions between aircraft manufacturers and airlines as well as airlines' utilization of their fleet. Aircraft production is characterized by economies of scale via learning-by-doing, which creates a trade-off between current profit and future competitive advantage in the aircraft market. The latter consideration makes large buyers more attractive than small buyers and induces quantity discounts. The resulting nonlinear pricing strategy may distort both production and allocation in favor of large buyers. In the data, there is a negative correlation between the size of aircraft orders and the per-unit price, and a positive correlation between the price paid and the …
Robust Information Cascade With Endogenous Ordering, Yi Zhang
Robust Information Cascade With Endogenous Ordering, Yi Zhang
Research Collection School Of Economics
We analyze a sequential decision model with endogenous ordering in which decision makers are allowed to choose the time of acting (exercising a risky investment option) or waiting. We show the existence of a unique symmetric equilibrium and characterize information cascade under endogenous ordering. Further, if there are two or more risky investment options, individuals tend to wait longer with competition. Hence, we could end up with a dilemma: more options might be worse.