Judo economics in markets with asymmetric firms

Information Gatekeeper with Asymmetric Firms

Asymmetry exists among the firms selling homogeneous product in online market. This paper provides a theoretical study on the equilibrium behavior of the firms and the information gatekeeper in a duopoly market with asymmetric sizes of loyal consumers. In equilibrium, the firm with larger number of loyal consumers tends to advertise less frequently but charges a lower average price whenever adv...

Equilibrium in Labor Markets with Few Firms

We study competition between firms in labor markets, following a combinatorial model suggested by Kelso and Crawford [14]. In this model, each firm is trying to recruit workers by offering a higher salary than its competitors, and its production function defines the utility generated from any actual set of recruited workers. We define two natural classes of production functions for firms, where...

Firms In Markets Under Uncertainty

We analyze a rational-expectations model of price formation in an intermediategood market under uncertainty. There is a continuum of dyads, each consisting of an upstream party and a downstream party. Both parties can make speci…c investments at private cost. As in property-rights models, di¤erent governance structures induce di¤erent investments. As in rational-expectations models, some partie...

Islamic Economics and Banking in the Global Economy Governing Firms and Financial Markets

Finding Supply Function Equilibria with Asymmetric Firms

Firms compete in supply functions when they offer a schedule of prices and quantities into a market; for example, this occurs in many wholesale electricity markets. We study the equilibrium behaviour when firms differ, both with regard to their costs and their capacities. We characterize the types of equilibrium solution that can occur. If the demand can be low enough for it to be met economica...