We examine the force of three types of behavioral dynamics in quantity-setting triopoly experiments: (1) mimicking the successful firm, (2) rules based on following the exemplary firm, and (3) rules based on belief learning. Theoretically, these three types of rules lead to the competitive, the collusive, and the CournotNash outcome, respectively. In the experiment we employ three information treatments, each of which is hypothesized to be conducive to the force of one of the three dynamic rules. To a large extent, the results are consistent with the hypothesized relationships between treatments, behavioral rules, and outcomes.

We use experiments to examine whether the auctioning of entry rights affects the behavior of market entrants. Standard economic arguments suggest that the license fee paid at the auction will not affect prices since it constitutes a sunk cost. This argument is not uncontested though and this paper puts it to an experimental test. Our results indicate that an auction of entry licenses may affect prices. The payment of an entry fee increases the probability that the market entrants tacitly coordinate on a collusive price path

In examining the evolution of small and medium enterprises in Japan in the postwar period, this paper shows that entry rates for new firms have declined sharply in the last quarter century or so, a trend observed across most sectors of the economy as well as across most firm-size categories. To explain this pattern, the paper investigates the determinants of entry in Japan. Among other factors, it finds that cost disadvantages owing to small scale and the shortage of technical resources are significant deterrents to entry. It also finds that the availability of government-directed credit deters entry which suggests that, in their current form, such credit programs protect incumbents. Among positive factors, it finds that subcontracting opportunities promote entry which suggests that the subcontracting system in Japan is open to newcomers and helps give them a foothold in the economy

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: Abstract: When competition is tough, firms which do not implement the least expensive When competition is tough, firms which do not implement the least expensive technology are forced to exit, or the low cost firms are able to increase their market technology are forced to exit, or the low cost firms are able to increase their market share. Persistent cost or profit differences require some form of restricted entry, share. Persistent cost or profit differences require some form of restricted entry, specific intangible assets or oligopolistic co-ordination. If technology or skills is specific intangible assets or oligopolistic co-ordination. If technology or skills is easy to transfer but it is not transferred because of collusion, we have to add a cost easy to transfer but it is not transferred because of collusion, we have to add a cost side effect ("the staircase") - stemming from the non-proliferation of the best side effect ("the staircase") - stemming from the non-proliferation...

On an increasing scale auctions are used to allocate the licenses to operate on markets which are thought not suited for free entry. According to standard economic arguments, the license fees paid at the auction will not affect consumer prices since they constitute a sunk cost. This standard view is not uncontested though. In the present paper we experimentally investigate two arguments for a potential upward effect of auctioning on prices: the incorporation of entry fees in prices due to the use of mark-up pricing rules, and the tendency of auctions to select the more collusive firms. Our results indicate that auctioning increases the probability of high prices, and that this is mainly due to the use of mark-up pricing rules. Often also the firms' customers adhere to this line of reasoning. For example, the International 1 Telecommunications Users Group is strongly opposed to auctioning of scarce telecom resources like radio frequencies, numbering space and orbital slots on the grou...

This paper empirically examines variations and changes in industry concentration and their determinants in the UK over the period 1993-1997 for a sample of 99 industries. The analysis indicates that average industrial concentration has increased during the 1990s, but is now lower than during the 1980s. Employing both static and dynamic panel data models to the sample, we find that industry-specific effects play a significant role in explaining both the level and change in concentration. Technological factors and mergers are found to have a positive effect on concentration. Key Words: Market structure; industrial concentration; panel data JEL Classification: C23; L10 * Corresponding author. E-mail: a.r.gourlay@lboro.ac.uk; Fax.: +44 (0)1509 223910; Tel.: +44 (0)1509 214011. 1 I INTRODUCTION The analysis of seller concentration, that is the extent to which an individual industry (or market) is dominated by its largest sellers, plays a central role in Industrial Organisatio...

The introduction of technological innovations is induced by changes in product and factor markets to which firms cannot adjust by means of changes in a given technical space, because of limited information, localized knowledge and irreversibility of tangible and intangible production factors. Firms can counteract the decline in their performance and the increase in actual costs by changing their technologies, with the introduction of process and product innovations Proximity in the Lancastrian product space matters when relevant knowledge is acquired and localized by learning by doing current products, learning by using the techniques in place and learning by interacting with current customers and rivals. The rate of technological change and the mix between product and process innovations are endogenous and localized by the key role of irreversibility and by the competence accumulated by means of learning processes.

This paper seeks to explore the economics and ethics of competition in the context of two important economic relationships: vertical (buyer-supplier) relations between firms and horizontal (rivalrous) relations between firms. We start by developing concepts of fairness within each of the three types of relationship with reference to the Bible. We go on to illustrate and analyse these concepts with 4 case studies of best practice and poor competitive relationships. The case studies involve Hewlett Packard, the UK clothing industry, United Biscuits and the British Airways ‘Dirty Tricks’ campaign. JEL Classification: M1 Further information about the Centre for Business Research can be found at the