During the late 1990s, Jamaica’s telecommunications industry was poised for growth with an increased demand for new telecommunication services. At this time however, there was only one player, Cable and Wireless Ja. Ltd, which had a monopoly licence until the year 2013. However, this licence was revoked in 1999, bringing new players to the market, such as Digicel and Claro which revolutionised ...

This paper develops a simple model of piracy to analyze its effects on prices and welfare and to study the optimal enforcement policy. A monopolist produces an information good (involving a “large” development cost and a “small” reproduction cost) that is sold to two groups of consumers differing in their valuation of the good. We distinguish two settings: one in which the monopoly is regulated...

South Africa has one of the most sophisticated information and communication technology (ICT) infrastructures in Africa, and was one of the early adopters of the Internet on the continent. This paper describes a longitudinal analysis of Internet diffusion in South Africa over the period 1994 to 2004 by making use of the Global Diffusion of the Internet (GDI) framework. It also analyses the dete...

In this paper we study market environments where information is costly to acquire and is also useful to potential competitors. Agents may sell, or buy, reports over the information acquired and choose their trades in the market on the basis of what they learnt. Reports are unverifiable cheap-talk messages hence the quality of the information transmitted depends on the conflicts of interest face...

Investments in cost reductions are critical for the long run success of companies that operate in dynamic and stochastic market environments. This paper studies optimal investment in cost reductions as a real option under the assumption that a single firm faces two different sources of risk, stochastic demand and input prices. We derive optimal investment strategies for a monopoly as well as a ...

The purpose of this paper is to characterise the demand for wine. In contrast to the majority of current research efforts this paper treats wine as a heterogeneous good with a range of inherent characteristics. Each wine included in the study is described by twelve variables including, among others, price, quality, sensory attributes and country of origin. Using unique data that cover 90 percen...

Unlike Arrow’s result for process innovations, the gain from a product innovation can be larger to a secure monopolist than to a rivalrous …rm that would face competition from independent sellers of the old product. A monopolist incurs pro…t diversion from its old good but may gain more than a rivalrous …rm on the new good by coordinating the prices. In a Hotelling framework, we …nd simple cond...

This paper explores some implications for valuation and investment of challenging the standard assumption that there are no aggregate pure profits in the US economy. First, it highlights the theoretical importance of monopoly rents for fluctuations in average Q. A series for such rents is then computed by assuming that production is Cobb-Douglas, as fluctuations in the output share of pure prof...

To examine the interaction between buyer power and competition intensity in a downstream market, we construct a model in which oligopolistic retailers compete in quantity in the downstream market and one of them is a large retailer that has its own exclusive supplier. We demonstrate that an increase in the buyer power of the large retailer against its supplier leads to a fall in retail price an...

In many shopping scenarios, e.g., in online shopping, customers have a large menu of options to choose from. However, most of the buyers do not browse all the options and make decision after considering only a small part of the menu. To study such buyer’s behavior we consider the standard Bayesian monopoly problem for a unit-demand buyer, where the monopolist displays the menu dynamically page ...