Many industries with avoidable fixed costs face competitive price instability problems in an attempt to maintain profitability. We designed an experimental environment where profitability is eroded by the addition of sunk and avoidable fixed costs. While we cannot reject the hypothesis that sunk fixed costs have no effect on prices, we observe a pattern of price signaling and responses which ma...

Over the last 15 to 20 years, cluster analysis has emerged as a new way of looking at economic development, integrating regional differences in development and economic specialization (Porter 1990, 2003; Sweeney and Feser 1998; Feser 2004, Cortright 2006). An increasing number of states and regions in the United States and overseas have modified their economic development strategies to focus an...

Firms choose their competitive strategies to achieve competitive advantage. With the help of a dynamic model we demonstrate that in platform industries, any market structure can be mapped into different types of competitive (dis-) advantage. Numerically simulating the model allows us to find the optimal competitive strategy for each competitive position of a firm within a given market structure...

The view of line-bound energy industries as "natural monopolies" has changed considerably during recent years upon the perception that each of the industries could be seen as a combination of different functions. The natural monopoly perception for each function has been reassessed, resulting in many cases in transportation functions such as transmission and distribution as well as dispatch rem...