This paper builds on the theory-based view and the theory of the entrepreneur in economics to describe three archetypal value-creating theories that economic actors can possess and shows that each theory implies a set of prescriptions for how entrepreneurs can organize and govern the process of value creation. These patterns for value creation reveal important insights about the entrepreneurial process, influencing (among other things) entrepreneurial experimentation, economic organization, intellectual property protection, and financing.
{"title":"Entrepreneurial Theories","authors":"Robert Wuebker, Todd R. Zenger","doi":"10.2139/ssrn.3917981","DOIUrl":"https://doi.org/10.2139/ssrn.3917981","url":null,"abstract":"This paper builds on the theory-based view and the theory of the entrepreneur in economics to describe three archetypal value-creating theories that economic actors can possess and shows that each theory implies a set of prescriptions for how entrepreneurs can organize and govern the process of value creation. These patterns for value creation reveal important insights about the entrepreneurial process, influencing (among other things) entrepreneurial experimentation, economic organization, intellectual property protection, and financing.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"599 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122624256","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Suppose an economy that seeks to maintain, in perpetuity, population size and distributions for income, savings, and consumption. Regardless of births, deaths, retirements, and entry into the work force, asymptotically, there exists an infinite lived agent and only technical change facilitates increases to income. Suppose emergence of technical change that is source of `new effectiveness'. Formal theoretical predictions show technical change results in progressiveness of improvements to economic welfare if and only if independently, (a) natural resources last forever; (b) changes to wages always equilibrate with changes to price levels; (c) some proportion of increases to tax receipts progressively are applied towards facilitation of decreases to costs of social services; and all technical change that is accepted (d) induces decreases to costs of production; (e) and can be diffused across all industries. Suppose technical change is source only of `new efficiencies'. In stated context, conditions (a) and (b) cease to be binding necessary conditions. For avoidance of ambiguity, in presence of an economy in context of which technical change is sole source of increases to income, regardless, technical change lacks characterization as a sufficient condition for generation of improvements to welfare of economic agents. In aggregate, study findings show government policies that are appropriately formulated are necessary conditions for translation of technical change into progressiveness of improvements to welfare of economic agents. In stated respect, while condition (c) facilitates either of first or second-best improvements to welfare, all other conditions only suffice for maintenance of existing welfare.
{"title":"Contextualizing Importance of Government for Progressiveness of Improvements to Welfare of Economic Agents","authors":"Oghenovo A. Obrimah","doi":"10.2139/ssrn.3897346","DOIUrl":"https://doi.org/10.2139/ssrn.3897346","url":null,"abstract":"Suppose an economy that seeks to maintain, in perpetuity, population size and distributions for income, savings, and consumption. Regardless of births, deaths, retirements, and entry into the work force, asymptotically, there exists an infinite lived agent and only technical change facilitates increases to income. Suppose emergence of technical change that is source of `new effectiveness'. Formal theoretical predictions show technical change results in progressiveness of improvements to economic welfare if and only if independently, (a) natural resources last forever; (b) changes to wages always equilibrate with changes to price levels; (c) some proportion of increases to tax receipts progressively are applied towards facilitation of decreases to costs of social services; and all technical change that is accepted (d) induces decreases to costs of production; (e) and can be diffused across all industries. Suppose technical change is source only of `new efficiencies'. In stated context, conditions (a) and (b) cease to be binding necessary conditions. For avoidance of ambiguity, in presence of an economy in context of which technical change is sole source of increases to income, regardless, technical change lacks characterization as a sufficient condition for generation of improvements to welfare of economic agents. In aggregate, study findings show government policies that are appropriately formulated are necessary conditions for translation of technical change into progressiveness of improvements to welfare of economic agents. In stated respect, while condition (c) facilitates either of first or second-best improvements to welfare, all other conditions only suffice for maintenance of existing welfare.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"78 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116733983","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
James M. Buchanan’s 1969 book Cost and Choice speaks directly to the socialist calculation debate from the perspective of the “London Tradition” in the theory of cost. More than this, however, it places Buchanan alongside Adam Smith, Friedrich Hayek, and Milton Friedman as an exemplar of what Thomas Sowell called “the constrained vision” in his 1987 [2007] book A Conflict of Visions. This essay explores Buchanan’s radical subjectivism in Cost and Choice, why it aligns him with Sowell’s “constrained vision,” and what this implies about Buchanan’s place within political theory generally. His radically subjectivist analysis of cost underlies his constitutional liberalism, and it obviates a more activist, interventionist political agenda.
James M. Buchanan在1969年出版的《成本与选择》一书中，从成本理论中的“伦敦传统”的角度，直接谈到了社会主义计算辩论。不仅如此，它还将布坎南与亚当·斯密、弗里德里希·哈耶克和米尔顿·弗里德曼并列，成为托马斯·索威尔在其1987年[2007年]出版的《愿景的冲突》一书中所称的“受约束的愿景”的典范。本文探讨了布坎南在《成本与选择》中的激进主观主义，为什么他与索厄尔的“受约束的视野”保持一致，以及这意味着布坎南在政治理论中的地位。他对成本的极端主观主义分析奠定了他的宪政自由主义的基础，并避免了一个更激进的、干预主义的政治议程。
{"title":"James M. Buchanan's Constrained Vision in Cost and Choice","authors":"Art Carden, M. King, A. Redford, J. Hanley","doi":"10.2139/ssrn.3723111","DOIUrl":"https://doi.org/10.2139/ssrn.3723111","url":null,"abstract":"James M. Buchanan’s 1969 book Cost and Choice speaks directly to the socialist calculation debate from the perspective of the “London Tradition” in the theory of cost. More than this, however, it places Buchanan alongside Adam Smith, Friedrich Hayek, and Milton Friedman as an exemplar of what Thomas Sowell called “the constrained vision” in his 1987 [2007] book A Conflict of Visions. This essay explores Buchanan’s radical subjectivism in Cost and Choice, why it aligns him with Sowell’s “constrained vision,” and what this implies about Buchanan’s place within political theory generally. His radically subjectivist analysis of cost underlies his constitutional liberalism, and it obviates a more activist, interventionist political agenda.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"92 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125534109","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I use firm panel data and a quantitative framework to document the extent of misallocation in Russia. I find that there are large wedges between state-owned and private firms that prevent labour and capital inputs from flowing to more productive private firms. I quantify the degree of misallocation attributed to state ownership. I find that the aggregate TFP would increase by at least 11% if the wedge between state-owned enterprises and private firms is removed. Using a unique natural experiment of staggered firm-level sanctions, I find one channel through which resources become misallocated between state-owned a private firms: excessive shielding from negative shocks. I find that misallocation grew after the sanctions episode and the Russian TFP dropped at least by 0.33% overall, reaching -3% in some sectors as a combined effect of sanctions and shielding.
{"title":"Misallocation and State Ownership: Evidence from the Russian Sanctions","authors":"Dzhamilya Nigmatulina","doi":"10.2139/ssrn.3825246","DOIUrl":"https://doi.org/10.2139/ssrn.3825246","url":null,"abstract":"I use firm panel data and a quantitative framework to document the extent of misallocation in Russia. I find that there are large wedges between state-owned and private firms that prevent labour and capital inputs from flowing to more productive private firms. I quantify the degree of misallocation attributed to state ownership. I find that the aggregate TFP would increase by at least 11% if the wedge between state-owned enterprises and private firms is removed. Using a unique natural experiment of staggered firm-level sanctions, I find one channel through which resources become misallocated between state-owned a private firms: excessive shielding from negative shocks. I find that misallocation grew after the sanctions episode and the Russian TFP dropped at least by 0.33% overall, reaching -3% in some sectors as a combined effect of sanctions and shielding.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124851212","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper introduces the concept of marginal labour value in the framework of perfect competition and shows that prices are proportional to marginal labour values. By this marginal analysis overcomes the classical contradiction of labour commanded and labour embodied. Furthermore the curves of marginal and average labour values are discussed and the cost curve of the Cobb-Douglas production function in terms of labour values is calculated.
{"title":"A Marginal Analysis of Labour Values","authors":"Klaus Hagendorf","doi":"10.2139/ssrn.3793569","DOIUrl":"https://doi.org/10.2139/ssrn.3793569","url":null,"abstract":"This paper introduces the concept of marginal labour value in the framework of perfect competition and shows that prices are proportional to marginal labour values. By this marginal analysis overcomes the classical contradiction of labour commanded and labour embodied. Furthermore the curves of marginal and average labour values are discussed and the cost curve of the Cobb-Douglas production function in terms of labour values is calculated.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131876861","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Administrative tasks, bureaucracy lead to more constraints in the enterprise, we propose to consider explicitly these activities in the production theory and its implications on productivity and economic growth. We propose an alternative production function which encompasses not only inputs needed for the production of the good sold on the market (the core production), but also explicitly all administrative and logistic departments (the ancillary activities). We assume complementarity between them. The main contribution of this paper is the determination of ancillary inputs productivity and therefore their retribution. In the last section we give two succinct applications of our model. The first application concerns the Productivity Paradox debate. Indeed, the impact of a technological innovation depends with the model if it is ancillary oriented or not. Complementarity assumption prevents any spillover effects between activities. The second application is about growth theory. The model explains the mechanism at work about why bureaucracy hampers economic growth. Again the complementarity assumption is all the story.
{"title":"Ancillary Activity and Productivity","authors":"Stéphane Carvalho","doi":"10.2139/ssrn.3715812","DOIUrl":"https://doi.org/10.2139/ssrn.3715812","url":null,"abstract":"Administrative tasks, bureaucracy lead to more constraints in the enterprise, we propose to consider explicitly these activities in the production theory and its implications on productivity and economic growth. We propose an alternative production function which encompasses not only inputs needed for the production of the good sold on the market (the core production), but also explicitly all administrative and logistic departments (the ancillary activities). We assume complementarity between them. The main contribution of this paper is the determination of ancillary inputs productivity and therefore their retribution. In the last section we give two succinct applications of our model. The first application concerns the Productivity Paradox debate. Indeed, the impact of a technological innovation depends with the model if it is ancillary oriented or not. Complementarity assumption prevents any spillover effects between activities. The second application is about growth theory. The model explains the mechanism at work about why bureaucracy hampers economic growth. Again the complementarity assumption is all the story.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"60 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121829815","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-08-31DOI: 10.15587/1729-4061.2020.208764
D. Raiko, O. Podrez, V. Cherepanova, O. Melnikov, Alla Kharchenko
Cost price reduction is one of the ways to improve the competitiveness of products. It is possible by establishing the set of factors affecting the production costs at an industrial enterprise and building on this basis a mathematical model of in-house cost management. The study objective was to develop and substantiate an economic-and-mathematical model of management to minimize the enterprise costs taking into account the utilization of secondary resources obtained in the production of basic products. The model consists of two stages. At the first stage, full costs of production of basic and additional products are determined. The peculiarity of this production implies the generation of significant amounts of secondary resources that have both independent value and opportunities for their use in the main technological process. This leads to complex material flows within the production process, which were accounted for in the study with the help of an adapted "cost-output" balance model. A plant can function with the use of a variety of raw materials which differ in both prices and rates of the output of basic products and secondary resources. This brings about the problem of finding an optimal combination of input resources to minimize costs or maximize profits. The problem is solved in the second stage. It is formalized as a linear programming problem. It features the provision of the ability to establish indicative plans of production of both main products and by-products. The model was tested on the example of coke-chemical plants producing coke of KDM-2 grade with 6 % humidity content and KDM-1 grade coke of improved quality as the main products. Coke oven gas, coke fines, beans, and sludge are produced as by-products. After purifying the coke oven gas, it is further used in the production of heat and electricity, compressed air, and a fuel for coke ovens. Thus, the produced fuel and energy, utilizable material resources, and circulating water supply are secondary resources. A certain portion of by-products is sold to third parties. When applied, the model will make it possible to improve the efficiency of cost management at enterprises
{"title":"Managing Costs of an Industrial Enterprise When Using Secondary Resources","authors":"D. Raiko, O. Podrez, V. Cherepanova, O. Melnikov, Alla Kharchenko","doi":"10.15587/1729-4061.2020.208764","DOIUrl":"https://doi.org/10.15587/1729-4061.2020.208764","url":null,"abstract":"Cost price reduction is one of the ways to improve the competitiveness of products. It is possible by establishing the set of factors affecting the production costs at an industrial enterprise and building on this basis a mathematical model of in-house cost management. The study objective was to develop and substantiate an economic-and-mathematical model of management to minimize the enterprise costs taking into account the utilization of secondary resources obtained in the production of basic products. The model consists of two stages. At the first stage, full costs of production of basic and additional products are determined. The peculiarity of this production implies the generation of significant amounts of secondary resources that have both independent value and opportunities for their use in the main technological process. This leads to complex material flows within the production process, which were accounted for in the study with the help of an adapted \"cost-output\" balance model. A plant can function with the use of a variety of raw materials which differ in both prices and rates of the output of basic products and secondary resources. This brings about the problem of finding an optimal combination of input resources to minimize costs or maximize profits. The problem is solved in the second stage. It is formalized as a linear programming problem. It features the provision of the ability to establish indicative plans of production of both main products and by-products. The model was tested on the example of coke-chemical plants producing coke of KDM-2 grade with 6 % humidity content and KDM-1 grade coke of improved quality as the main products. Coke oven gas, coke fines, beans, and sludge are produced as by-products. After purifying the coke oven gas, it is further used in the production of heat and electricity, compressed air, and a fuel for coke ovens. Thus, the produced fuel and energy, utilizable material resources, and circulating water supply are secondary resources. A certain portion of by-products is sold to third parties. When applied, the model will make it possible to improve the efficiency of cost management at enterprises","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125795322","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-12-01DOI: 10.4067/s0718-52862019000200157
Xu Guo, W. Wong
Previous studies focused on the comparison of the optimal output levels of regret-averse firms under uncertainty and firms under certainty. This paper extends the theory by further investigating the effects of regret-aversion on production. We compare the optimal output levels of regret-averse firms with purely risk-averse firms under uncertainty and firms under certainty. We first show that the linear-regret firms will surely produce more than their purely risk-averse counterparts and surely produce less than firms under certainty. Thereafter, we give sufficient conditions to ensure the regret-averse firms to produce more than the purely risk-averse counterparts and study the comparative statics of the optimal production. We also develop properties of regret-aversion on production by using a binary model. The findings in this paper are useful for production managers in their decisions on the production.
{"title":"Comparison of the Production Behavior of Regret-Averse And Purely Risk-Averse Firms","authors":"Xu Guo, W. Wong","doi":"10.4067/s0718-52862019000200157","DOIUrl":"https://doi.org/10.4067/s0718-52862019000200157","url":null,"abstract":"Previous studies focused on the comparison of the optimal output levels of regret-averse firms under uncertainty and firms under certainty. This paper extends the theory by further investigating the effects of regret-aversion on production. We compare the optimal output levels of regret-averse firms with purely risk-averse firms under uncertainty and firms under certainty. We first show that the linear-regret firms will surely produce more than their purely risk-averse counterparts and surely produce less than firms under certainty. Thereafter, we give sufficient conditions to ensure the regret-averse firms to produce more than the purely risk-averse counterparts and study the comparative statics of the optimal production. We also develop properties of regret-aversion on production by using a binary model. The findings in this paper are useful for production managers in their decisions on the production.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"819 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114225176","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Christian Schmidt, Yannik Schneider, Sascha Steffen, D. Streitz
This paper provides empirical evidence suggesting that misallocation of capital distorts competition and impedes innovation and productivity. Using a sample of Spanish firms over the 2010 to 2016 period, we document that industries with more severe misallocation of capital have both lower exit rates of low-type firms and lower entry rates of young and innovative firms. In these industries output declines and concentration increases. Consistent with negative effects associated with a reduction in competition on innovation, we find that capital misallocation depresses patent applications, particularly in high-tech sectors, and industries with neck-and-neck competition.
{"title":"Capital Misallocation and Innovation","authors":"Christian Schmidt, Yannik Schneider, Sascha Steffen, D. Streitz","doi":"10.2139/ssrn.3489801","DOIUrl":"https://doi.org/10.2139/ssrn.3489801","url":null,"abstract":"This paper provides empirical evidence suggesting that misallocation of capital distorts competition and impedes innovation and productivity. Using a sample of Spanish firms over the 2010 to 2016 period, we document that industries with more severe misallocation of capital have both lower exit rates of low-type firms and lower entry rates of young and innovative firms. In these industries output declines and concentration increases. Consistent with negative effects associated with a reduction in competition on innovation, we find that capital misallocation depresses patent applications, particularly in high-tech sectors, and industries with neck-and-neck competition.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"57 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116142787","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Many markets feature an economic structure with value co-created by multiple producers whose outputs are sold as a common bundle by a producer-consortium or independent firm. Examples include in-home video entertainment, technology goods and services, multi-sourced data platforms, and patent pools. This paper develops an economic model to study demand, production choices, revenue-sharing, and relative market power in such markets. Producers in these markets are not rivalrous competitors in the usual zero-sum sense, because output of each casts an externality on production decisions of others and total market demand expands with total output, albeit with diminishing returns. This property allows multiple producers to flourish in equilibrium (vs. just one with the most favorable technological or cost structure), and more so when the market expands less quickly with total output. Equilibrium production quantities of competitors are strategic complements, yet competition between producers does manifest itself, e.g., if one acquires better production technology (i.e., makes value units at lower cost) then the equilibrium production levels of other producers are reduced. Insights are also derived for alternative market structures, e.g., producers have more output and earn higher profit when organized into a distribution consortium (e.g., Hulu, or consortia of zoos or museums) vs. relying on a separate retailer. Mergers between producers have similar effect. The formulation enables us to rigorously answer economic questions ranging from pricing, revenue sharing, and production levels in a static setting, to market dynamics covering both the causes and effects of changes in industry structure.
{"title":"A Model for Value Co-Production and Cross-Producer Bundles","authors":"H. Bhargava","doi":"10.2139/ssrn.3490949","DOIUrl":"https://doi.org/10.2139/ssrn.3490949","url":null,"abstract":"Many markets feature an economic structure with value co-created by multiple producers whose outputs are sold as a common bundle by a producer-consortium or independent firm. Examples include in-home video entertainment, technology goods and services, multi-sourced data platforms, and patent pools. This paper develops an economic model to study demand, production choices, revenue-sharing, and relative market power in such markets. Producers in these markets are not rivalrous competitors in the usual zero-sum sense, because output of each casts an externality on production decisions of others and total market demand expands with total output, albeit with diminishing returns. This property allows multiple producers to flourish in equilibrium (vs. just one with the most favorable technological or cost structure), and more so when the market expands less quickly with total output. Equilibrium production quantities of competitors are strategic complements, yet competition between producers does manifest itself, e.g., if one acquires better production technology (i.e., makes value units at lower cost) then the equilibrium production levels of other producers are reduced. Insights are also derived for alternative market structures, e.g., producers have more output and earn higher profit when organized into a distribution consortium (e.g., Hulu, or consortia of zoos or museums) vs. relying on a separate retailer. Mergers between producers have similar effect. The formulation enables us to rigorously answer economic questions ranging from pricing, revenue sharing, and production levels in a static setting, to market dynamics covering both the causes and effects of changes in industry structure.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-09-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132366565","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：