• The Value of Information and Circular Settings (with Roman V. Belavkin, Middlesex University London).

Abstract:
We present a universal concept for the Value of Information (VoI), based on the works of Claude Shannon’s and Ruslan Stratonovich that can take into account very general preferences of the agents and results in a single number. As such it is convenient for applications and also has desirable properties for decision theory and demand analysis. The Shannon/ Stratonovich VoI concept is compared to alternatives and applied in examples. In particular we apply the concept to a circular spatial structure well known from many economic models and allow for various economic transport costs.

NEW: arXiv 2023 https://arxiv.org/abs/2303.16126

• Multiplicative Normal Noise and Nonconcavity in the Value of Information.

Abstract:
This paper investigates a Bayesian inverse problem of a price setting monopolist facing a random demand. In contrast to previous investigations an unknown true market potential of demand is distorted by two independent Gaussian errors, a zero-mean additive and a unity-mean multiplicative one. The multi-period game allows for learning from realized market demands (signals). Interestingly increasing the level of noise of a multiplicative error in this dynamic setting can actually improve the Value of Information of signals to the firm, a result that cannot hold for a single additive error or in a static context.

Paper in pdf format.

Published: Theoretical Economics Letters, 2021, Vol 11, p.116-124. https://www.scirp.org/pdf/tel_2021022410371431.pdf

• Expanding Multi-Market Monopoly and Nonconcavity in the Value of Information.

Abstract:
We investigate a Bayesian inverse problem in the specific setting of a game with a price setting monopolist facing a randomly growing demand in multiple interconnected markets. Investigating the Value of Information of a signal to the monopolist, both in full and pro-rata, we find that the former can be non-monotonic in the variance of the signal whereas the latter will always be monotonic. This implies that there are ranges of the signal noise over which the Value of Information may either decline or increase. This range critically depend on the exogenous growth rate of the market potentials.

arXiv 2021 https://arxiv.org/abs/2111.00839  

• Cournotian Dynamics of Spatially Distributed Renewable Resources (with Sebastian Anita & Ana-Maria Mosneagu, University of Iasi, Romania).

Abstract:
We extend modern Walrasian economics an in particular the results on Cournot convergence and dynamics by focusing on renewable resources in a spatial setting. Building on the harvesting model of Behringer and Upmann (2014) we endogenize prices using a linear inverse demand function and investigate the cases of durable and non-durable renewable commodities. We find that endogenizing prices is sufficient to prevent the full exploitation result and look at how competition affects not only the stock but also the inter-temporal incentives for exploitation. We derive convergence results in static and dynamic settings which suggest that the classical Cournotian outcomes may prevail.

arXiv 2017 https://arxiv.org/abs/1706.05930  

• Optimal tax policy under heterogenous environmental preferences (with Marcello Arbex & Christian Trudeau, University of Windsor, Canada).

Abstract:
We model an economy of K heterogeneous regions where agents value consumption vs. nature differently. Consumption obtained through pollution-inducing production also generates a negative externality on neighbors. We show that even with a decentralized policy we can obtain the first-best efficiency by choosing a combination of pollution taxes in both regions and lump-sum transfers. Moreover, we show that the optimal pollution taxes are determined only by the externality parameters, independent of agents' preferences for consumption and nature.

Paper in pdf format.

Supplementary Material.

Published: Economics Letters, 2017, Vol. 157, p.79-82  

• Product Repositioning in the UK Newspaper Industry.

Abstract:
This paper investigates the alleged predatory behaviour in the UK quality newspaper industry in the 1990s in terms of product repositioning using a horizontal differentiation model and industry data. It supports the call for an 'effects based' approach to competition law by showing that non-price conduct can be a critical and less visible, complementary means to achieve a predatory goal than mere price cuts.

Paper in pdf format.

Published: Theoretical Economics Letters, 2016, 6.5, p.986-999.
 

• Network Effects, Spillovers, and Market Structure.

Abstract:
The paper investigates the effect of spillovers in a model of endogenous technical change resulting from network effects, e.g. in the market for hand-held video consoles on the existence of a lower bound to market concentration.
Paper in pdf format.
Published: The Manchester School, 2013, Vol 82, Issue 2, p.143-159.
 
• Optimal Harvesting of a Spatial Renewable Resource (with Thorsten Upmann, University Duisburg-Essen).

Abstract:
In this paper we investigate optimal harvesting of a renewable natural resource. While in the standard approach the resource is located at a single point in space we allow for the resource to be distributed over the plane. Consequently, an agent who exploits the resource has to travel from one location to another. For a fixed planning horizon we investigate the speed and the time path of harvesting chosen by the agent. We show that the agent adjusts the speed of movement so that he accomplishes to visit each location only once, even in the absence of travelling cost. Since he does not come back to any location for a second harvest, it is optimal for him to fully deplete the resource upon arrival. A society interested in conserving some of the resource thus has to take measures suitable to limit the exploitative behaviour of the agent.
CESifo Working Paper No.4019 in pdf format.
Published: Journal of Economic Dynamics and Control, 2014, Vol. 42, p.105-120.
 
• Harvesting a Remote Renewable Resource (with Thorsten Upmann, University Bielefeld).

Abstract:
In standard models of spatial harvesting, a resource is distributed over a continuous domain with an agent who may harvest everywhere all the time. For some cases though (e.g., fruits, mushrooms, algae), it is more realistic to assume that the resource is located at a fixed point within that domain so that an agent has to travel in order to be able to harvest. This creates a combined travelling–and–harvesting problem where slower travel implies a lower travelling cost and, due to a later arrival, a higher abundance of the resource at the beginning of the harvesting period; this, though, has to be traded off against less time left for harvesting, given a fixed planning horizon. Possible bounds on the controls render the problem even more intricate. We scrutinise this bioeconomic setting using a two-stage optimal control approach, and find that the agent economises on the travelling cost and thus avoids to arrive at the location of the resource too early. More specifically, the agent adjusts the travelling time so as to be able to harvest with maximum intensity at the beginning and the end of the harvesting period, but may also find it optimal to harvest at a sustainable level, where the harvesting and the growth rate of the stock coincide, in an intermediate time interval.
CESifo Working Paper No.6742 in pdf format.
Published: Theoretical Ecology, 26 August 2020, Open Access, Final paper in pdf format .
 
• A Survey on Machine Replacement, and Chains of Machines in Mangement (with Anton Belyakov, Lomonossov Moscow State University).

Abstract:
The Paper surveys literature on Machine Replacements.
Published: Math. Inst. Steklova, 2016, p.17-23, Final paper in pdf format .
 
• Direct Provision of a Public Good with Many Agents.

Abstract:
The literature on the private provision of public goods suggests a proportional relationship between incentives to free-ride and group size. However recent empirical research and casual observation of modern information technologies suggests otherwise. This paper purports a solution to the apparent paradox within a mechanism design framework tailored to modular developments within these technologies and provides a positive limit result as the number of agents gets large. (New Version 3/2013)
Paper in pdf format .
 
• Public Good Provision with many Agents: The kn-success technology (with Yukio Koriyama, Ecole Polytechnique).

Abstract:
In this paper, we consider a class of public good provision problems in which the production function takes the form of kn-success technology, an extension of the direct provision technology considered in Behringer (2013). These models are suitable to describe the free-rider problems in which there are a large number of agents who are both users and bene- ficiaries of a public good at the same time, e.g. open-source software or social networks. We provide results on asymptotic efficiency which connect a negative result of Mailath and Postlewaite (1990) and a positive result of Hellwig (2003), as well as a set of examples which allow us welfare comparison with the standard technologies. (New Version 3/2015)
Paper in pdf format .
  
• Entry, Access Pricing, and Welfare in the Telecommunications Industry.
  
  Abstract:
  The paper looks at the effects of entry on welfare in the Telecommunications industry. The equilibrium pricing parameters for an incumbent (state) monopoly and for a duopoly situation are determined. A welfare comparison between the monopoly and duopoly equilibrium situation is undertaken and the welfare consequences of alternative access pricing regimes are investigated.
  Paper in pdf format
  Published: Economics Letters, 2009, Vol. 102(3), p.185-188.
  
  
• Equilibrium Market and Pricing Structures in Virtual Platform Duopoly: Coexistence on Competing Online Auction Sites revisited.
  
  Abstract:
  We investigate the equilibrium market structure in virtual platform duopoly such as that of eBay and Yahoo! auctions. Building on the model of Ellison, Fudenberg, & Möbius (2004) we take full account of the complexity of network effects on such platforms. We extend the model by looking at the implication of exogenous and endogenous buyer and seller charges (i.e. vertical product differentiation) making use of the concept of insulating tariffs. This extension brings in line the theory with the empirical findings of Brown & Morgan (2006). Eventually we investigate welfare effects, look at the viability of duopoly with size differentials, and the implications for large markets. (Version 5/2013)
  Paper in pdf format
  Published: Analysis of Competition Policy and Sectoral Regulation, CRESSE, eds. Peitz, M. and Spiegel, Y. 2014, World Scientific.
  
  
• Asymmetric Equilibria and Competitive Access Pricing in the Telecommunications Industry.
  
  Abstract:
  This paper looks at competition in the telecommunications industry with non-linear tariffs and network-based price discrimination. Allowing for asymmetric networks and non-cooperatively chosen access prices simultaneously allows to explicitly derive non-reciprocal equilibrium access price choices that are above the efficient level and thus reconcile theory with regulatory practice.
  Paper in pdf format
  Published: Int. J. Management and Network Economics, 2012, Vol.2, No.3, p.257-281.
  
  
• Mobile Access Charges and Collusion under Asymmetry (with Edmond Baranes and Jean-Christophe Poudou, University Montpellier 1).
  
  Abstract:
  This paper considers collusion between asymmetric networks in the telecommunications industry. Its primary purpose is to fill the gap between the literature on collusion between asymmetric firms and the literature on collusion in the telecommunications industry. Employing the standard Hotelling framework of horizontal product differentiation with non-linear tariffs and network based price discrimination we allow for differentiation in a second dimension. Modulo the locations, the consumers of each network operator face an asymmetry parameter that directly impacts their demands and can capture asymmetries in demand elasticities, in demand size, or even both. The implications of these asymmetries for the possibility of sustaining collusion are investigated under alternative access pricing regimes. (Version 10/2015)
  Paper in pdf format
  Published: Annals of Economics and Statistics, 2017, September, p.33-60. Formerly Annales de l'INSEE available at http://www.jstor.org/stable/10.15609/annaeconstat2009.127.0033.


• Price Wars in Two-Sided Markets: The case of the UK Quality Newspaper Industry (with Lapo Filistrucchi, University of Florence).
  
  Abstract:
  This paper investigates the price war in the UK quality newspaper industry in the 1990s. We show that the empirical evidence is in accordance with a substantial change in the optimal finance mix of newspapers as advertising becomes the dominant source of newspaper revenue. The evidence brought forward at the time is not sufficient to establish a case of predatory pricing as it has neglected the critical two-sidedness of firms and necessitates further study.
  Paper in pdf format
  
  
• Hotelling Competition and Political Differentiation with more than two Newspapers (with Lapo Filistrucchi, University of Florence).
  
  Abstract:
  We analyse a market where media firms compete for advertising as well as for readership. Firms first choose their political differentiation, then set cover prices and advertising tariffs. We build on the duopoly model of Gabszewicz, Laussel, and Sonnac (2001, 2002) who show that advertising financing can lead to minimum political differentiation of the newspapers and hence a lack of plurality of political views or pensée unique. We extend their model to more than two newspapers and show that, contrary to popular belief in competition policy, concern for such lack of plurality may diminish but does not disappear as the number of firms increases.
  Paper in pdf format
  Published: Information Economics and Policy, 2015, Vol. 30, p.36-49.
  
  
• Areeda-Turner in Two-Sided Markets (with Lapo Filistrucchi, University of Florence).
  
  Abstract:
  We first extend the Areeda-Turner rule to two-sided markets. Since prices below marginal cost on one side of the market cannot be considered a sign of predation, our proposed extension takes into account revenues and costs from both sides. We then analyse two alleged cases of predatory behaviour in the market for daily newspapers. These examples highlight that applying a one-sided Areeda-Turner rule may lead to assess a perfectly legitimate profit-maximizing pricing policy as a predatory attempt or, on the contrary, to consider legitimate prices that should be deemed predatory in the spirit of the original Areeda-Turner rule.(New version 2/2015)
  Paper in pdf format
  Published: Review of Industrial Organization, 2015, Vol. 46, pp.287-306.