Gabszewicz Jean

Gabszewicz Jean
Catholic University of Louvain | UCLouvain · Center for Operations Research and Econometrics

Ph.D Economics

About

174
Publications
33,205
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5,463
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January 1992 - December 2012
Catholic University of Louvain

Publications

Publications (174)
Article
Full-text available
This paper explores how social interactions among consumers shape markets. In a two‐country model, consumers meet and exchange information about the quality of the goods. As information spreads, demand evolves, affecting the prices and quantities manufactured by profit‐maximizing firms. We show that market prices with informational frictions reach...
Article
We prove that a sufficient condition for the core existence in a n-firm vertically differentiated market is that the qualities of firms' products are equispaced along the quality spectrum. This result contributes to see that a fully collusive agreement among firms in such markets is more easily reachable when product qualities are not distributed t...
Article
Les manuels de théorie microéconomique s'ouvrent généralement sur un premier chapitre consacré à la théorie du consommateur individuel. On y décrit le consommateur rendant maximale sa satisfaction sur l'ensemble des complexes de biens qu'il peut acheter, compte tenu de son revenu réel exprimé en termes d'un système de prix donné. Le second chapitre...
Research
Full-text available
We prove that a sufficient condition for the core existence in a n-firm vertically differentiated market is that the qualities of firms' products are equally-spaced along the quality spectrum. This result contributes to see that a fully collusive agreement among firms in such markets is more easily reachable when product qualities are not distribut...
Article
In this paper, we extend the concept of stability to vertical collusive agreements involving downstream and upstream firms, using a setup of successive Cournot oligopolies. We show that a stable vertical agreement, the unanimous vertical agreement involving all downstream and upstream firms, always exists. Thus, stable vertical collusive agreements...
Article
We analyze labor migration flows between two countries (regions) with different-sized populations and different levels of productive efficiencies to determine the effects of such flows on income taxation. The residents are heterogeneous because they incur different migration costs, although they are otherwise identical. Each resident compares her p...
Article
We model platform competition in a market where products are characterized by cross network externalities. Consumers differ in their valuation of these externalities. Although the exogenous set-up is entirely symmetric, we show that platform competition induces a vertical differentiation structure that allows for the co-existence of asymmetric plat...
Article
This paper analyses price competition between two firms producing horizontally and vertically differentiated goods. These are assumed to be credence goods, as consumers can hardly ascertain the quality of the commodities. To illustrate the model, we adapt it to represent a newspaper industry with two outlets, when the population of readers have pre...
Article
We explore a variant of the Hotelling model which allows to nest horizontal and vertical differentiation into a unified setup whose key parameter is the relative natural market size of the firms. In this setup, equilibrium prices increase whenever population's disparity decreases. We also explore the properties of the model in the case of entry by...
Article
Full-text available
We model platform competition in a market where products are characterized by cross net-work externalities. Consumers differ in their valuation of these externalities. Although the exogenous setup is entirely symmetric, we show that platform competition induces a vertical differentiation structure that allows for the co-existence of asymmetric plat...
Article
This paper explores (i) the incentives for an incumbent firm to acquire an entrant willing to sell a product innovation rather than openly competing with this entrant, and (ii) in case of acquisition, the incentives to sell simultaneously both the existing products and the new one rather than specializing on a single variant. We prove that, in some...
Article
This paper develops a model of the daily newspaper industry in order to provide a tentative explanation for the rise of free newspapers. This explanation is based on the growth of net advertising revenues per reader, i.e. of the difference between advertising revenue per reader and unit printing cost. Our analysis explains why the new entrant choos...
Article
Full-text available
This paper analyses price competition between two firms producing horizontally and vertically differentiated goods. These are assumed to be credence goods, as consumers can hardly ascertain the quality of the commodities. We provide sufficient conditions for the existence of a unique price equilibrium and we characterize it. To illustrate the model...
Article
Full-text available
The fierce growth in global competition has led politicians and economists in Italy to shift the focus of the debate to the pressing need for the country’s small firms to formulate appropriate strategic responses. In particular, the discussion has prompted the question of how best to ensure their survival: should these firms expand to a size that w...
Article
In the present paper, we propose an extension of Spengler's (1950) analysis of successive oligopolies, to study the effects of entry in the downstream and upstream markets. Free entry is analyzed using replica economies à la Debreu and Scarf (1963). We find that free entry may have different effects in the upstream and in the downstream market. Nam...
Article
Full-text available
This paper examines how and why people migrate between two re- gions with asymmetric size. The agglomeration force comes from the scale economies in the provision of local public goods, whereas the disper- sion force comes from congestion in consumption of public goods. Public goods considered resemble club goods (or public goods with congestion) a...
Article
Full-text available
We examine patterns of acquiring non-native languages in a model with two linguistic communities with heterogeneous learning skills, where every individual faces the choice of self-learning the foreign language or acquiring it at a profit-maximizing linguistic school. We consider a one-school model with divisions in both communities and various two...
Article
Full-text available
This article first provides an alternative formulation of the Cancian, Bills and Bergström (1995)1. Cancian , M. , Bills , A. and Bergstrüm , T. 1995. Hotelling location problem with directional constraints: An application to television news scheduling.. Journal of Industrial Economics, 43: 121–124. View all references problem, which discards th...
Article
In this paper, we examine how uncertainty can affect successive markets, when uncertainty can affect both upstream and downstream markets' conditions. The main result of the paper is that the equilibrium solution depends on how much dependent are the events.
Article
Full-text available
The aim of this paper is to develop a dynamic model of migrations, in which migration is driven by size asymmetries between countries and by the relative preferences of consumers between private consumption and consumption of public goods. The dynamic tra jectories heavily depend on the degree of attractiveness for public goods We show that monoton...
Article
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We define a two-variant model of product differentiation which, depending on the number of consumers prefering one variant to the other, provides equilibrium prices reflecting the natural valuation of these variants by the market.
Article
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The paper addresses the issue of linguistic diversity and its impact on economic policy and political decisions. Importance of the topic is illustrated by examination of optimal sets of official languages in the European Union. It is shown that alternative estimation methods of language disenfranchisement alter the order in which the languages ente...
Article
Full-text available
In this paper, we propose an example of successive oligopolies where the downstream firms share the same decreasing returns technology of the Cobb-Douglas type. We stress the differences between the conclusions obtained under this assumption and those resulting from the traditional example considered in the literature, namely, a constant returns te...
Article
Full-text available
In this paper we address the following question : is it more profitable, for an entrant in a differentiated market, to acquire an existing firm than to compete ? We illustrate the answer by considering competition in the banking sector
Article
Full-text available
This paper analyses price competition under product differentiation when goods are defined in a two dimensional characteristic space, and consumers do not know which firm sells which quality. Equilibrium prices consist of two additive terms, which balance consumers' relative valuation of goods' expected quality and consumers' preferences for variet...
Article
Full-text available
In this paper we address the following question: is it more profitable, for an entrant in a differentiated market, to acquire an existing firm than to compete? We illustrate the answer by considering competition in the banking sector. Keywordsvertical differentiation–acquisition–entry–banking competition
Article
Full-text available
The present note first provides an alternative formulation of the Cancian, Bills and Bergström (1995)-problem which discards the non-existence difficulty and consequently allows to consider some extensions of the TV-newscast scheduling game. The extension we consider consists in assuming that viewers'preferences between the competing channels do no...
Article
We obtain explicitly the optimal path of prices for a monopolist in a network industry with a horizon. We describe this optimal path as a function of network intensity and horizon length.
Article
We examine patterns of acquiring non-native languages in a model with two languages and two populations with heterogeneous learning skills, where every individual faces a binary choice of learning the foreign language or refraining from doing so. We show that both interior and corner linguistic equilibria can emerge in our framework, and that the f...
Article
This paper investigates how an incumbent monopolist can weaken potential rivals or deter entry in the output market by manipulating the access of these rivals in the input market. We analyse two polar cases. In the first one, the input market is assumed to be competitive with the input being supplied inelastically. We show that this situation opens...
Article
Full-text available
Intermarket network externalities occur when the utility of a good produced in a given industry varies with the size of the demand for a good produced in another. A particularly significant example of this phenomenon is provided by the interaction between the media and advertising industries. Media consumers vary according to their willingness to p...
Article
Full-text available
In this paper we analyze how the technology used by downstream firms can influence input and output market prices. We show via an example that both these prices increase under a decreasing returns technology while the countrary holds when the technology is constant.
Article
The present note first provides an alternative formulation of the Cancian, Bills and Bergström (1995) - problem which discards the non-existence difficulty and consequently allows to consider some extensions of the TV-newscast scheduling game. The extension we consider consists in assuming that viewers’ preferences between the competing channels do...
Article
Full-text available
We study the incentives for a "diagonal" merger between two Internet Service Providers, one a wireless retail only ISP in two origination markets, and the second a vertically integrated wired retailer in one market and an upstream provider in the other. The merger's effects depend on differentiation in access modalities; only with high differentiat...
Article
Full-text available
In this note, we start to claim that established marriages can be heavily destabilized when the population of existing couples is enriched by the arrival of new candidates to marriage. Afterwards, we discuss briefly how stability concepts can be extended to account for entry and exit phenomena affecting the composition of the marriage market.
Article
Full-text available
We study the incentives for a "diagonal" merger between two Internet Service Providers, one a wireless retail only ISP in two origination markets, and the second a vertically integrated wired retailer in one market and an upstream provider in the other. The merger's effects depend on differentiation in access modalities; only with high differentiat...
Article
This study is based on my observation that high quality markets are indispensable for the healthy growth of a modern economy. Many problems surrounding markets are attributable to the lack of high quality markets. An industrial revolution creates extremely vibrant but unhealthy markets. This study introduces a concept of fairness in dealing and pri...
Article
We characterize the unique mixed-strategy equilibrium of an extension of the "television news sheduling game" of Cancian, Bergstrom and Bills (1995) where viewers want to watch the first newscast broadcast after they return home. A fraction of the viewers record randomly one of the newscast to watch them in case they are too late. At equilibrium, n...
Article
This paper introduces a new approach to successive oligopolies. We draw on market games a la ShapleyShubik to examine how successive oligopolies operate between downstream and upstream markets when the input price is determined by the action of all firms, downstream and upstream both. This approach differs from the classical one as it allows us to...
Article
Full-text available
We study a simple bilateral oligopoly model in which individual agents, who are initially endowed with capital, decide sequentially (1) whether they want to act as producers (entrepreneurs) or as capital lenders (rentiers) and, then (2) which quantity of capital they would like to borrow or lend, though exchange of capital units against units of th...
Article
We analyze the optimal pricing choice of an incumbent firm that sells a good with network externalities and is threatened by the entry of a higher intrinsic quality variant. In the framework of a vertical differentiation model, we find a necessary and sufficient condition under which intrinsic quality improvement occurs as a result of this competit...
Article
We explore the issue of minorities' survival in the presence of positive network externalities. We rely on a simple example of thematic clubs to illustrate why and how such survival problems might appear, first considering the case of simple-network effects (fully anonymous externalities) and then the case of cross-network effects (type-dependent e...
Article
Full-text available
In this paper, we survey the literature on optimal pricing of a monopolist operating on a network industry. We also describe explicitly the optimal path of prices for a monopolist facing an expanding demand due to the presence of network effects. The optimal path of prices appears as a function of the network effect intensity and horizon length. Pr...
Article
This paper analyses successive markets where the intra-market linkage depends on the technology used to produce the final output. We investigate entry of new firms, when entry obtains by expanding the economy, as well as collusive agreements between firms. We highlight the differentiated effects of entry corresponding to a constant or decreasing re...
Article
We study access pricing by platforms providing internet services or pay-TV to users while they allow advertisers to have access to these users against payment via ads or banners. Users are assumed to be ad-haters. It is shown that equilibrium access prices in the usersÕ market are increasing in the dimension of the advertising market : the larger t...
Chapter
Concentration Industries Producing Content and Diversity of Preferences The object of this paper is to find out if the wide range of products available as a result of the tendency of cultural enterprises to form clusters will be able to satisfy the diversity of tastes and the pluralism of opinions better than the situation that existed before the e...
Article
We examine how media competition is affected when making endogenous advertising rates. To this end, we revisit some well-known contributions in which advertising rates and volumes are viewed as exogenous, so that the effects of advertising on diversity and industry concentration only depend on the size of the audience, without taking into account h...
Article
Media industries are important drivers of popular culture. A large fraction of leisure time is devoted to radio, magazines, newspapers, the Internet, and television (the illustrative example henceforth). Most advertising expenditures are incurred for these media. They are also mainly supported by advertising revenue. Early work stressed possible ma...
Article
We analyze the competition between two newspapers in a vertical differentiation model where the qualities of the journals are determined endogenously in the first stage of the game. We show that when the advertising revenues per reader increase there is a critical value above which the quality of the low quality newspaper discontinuously falls whil...
Article
Full-text available
We consider a model of daily newspapers' competition to test the validity of the so called "theory of the circulation spiral". According to it, the interaction between the newspapers and the advertising markets drives the newspaper with the smaller readership into a vicious circle, finally leading it to death. In a model with two newspapers, we sho...
Article
Full-text available
Media industries are important drivers of popular culture. A large fraction of leisure time is devoted to radio, magazines, newspapers, the Internet, and television (the illustrative example henceforth). Most advertising expenditures are incurred for these media. They are also mainly supported by advertising revenue. Early work stressed possible ma...
Article
This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...
Article
We analyse the optimal pricing choice of an incumbent firm that sells a good with network externalities and is threatened by the entry of a higher quality variant. In the framework of a vertical differentiation model, we find a necessary and sufficient condition under which quality improvement occurs as a result of this competition.
Article
Full-text available
Intermarket network externalities take place when the utility of a good produced in a givenindustry varies with the size of the demand for a good produced in another. A particularlysignificant example of this phenomenon is provided by the interaction between the media andadvertising industries. Media consumers vary according to their willingness to...
Article
Full-text available
We model duopoly competition between two platforms.They operate in a two-sided market where agents are heterogeneous on both sides of the market and are allowed to mulithome. Network effects are captured within a vertical differentiation framework.Under single-homing there exists an interior equilibrium where networks exhibit asymmetric sizes and b...
Article
We analyze competition between two private television channels that derive their profits from advertising receipts. These profits are shown to be proportional to total population advertising attendance. The channels play a sequential game in which they first select their profiles (program mixes) and then their advertising ratios. We show that these...
Article
This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...
Article
Full-text available
In this paper we model a situation of competition between two editors who are rivals in both the newpapers' and advertising industries.. To identify the consequences of this competition, we analyse a two-period sequential game whose players are the editors each selling a differentiated newspaper, like newspapers of different political content.We ch...
Article
Full-text available
Within the framework proposed by Mussa and Rosen (1978) for modelling quality differentiation, we allow consumers to buy simultaneously different variants of the same indivisible good. We call this the "joint purchase option". We show that this option dramatically affects price competition: while a unique equilibrium always prevails when consumers...
Article
Full-text available
We briefly review the rationale behind technological alliances and provide a snapshot of their role in global competition, especially insofar as it is based around intellectual capital. They nicely illustrate the increased importance of horizontal agreements and thus establish the relevance of the topic. We move on to discuss the organisation of in...
Article
Full-text available
In this paper we model a situation of competition between two editors who are rivals in both the newpapers' and advertising industries.. To identify the consequences of this competition, we analyse a two-period sequential game whose players are the editors each selling a differentiated newspaper, like newspapers of different political content.We ch...
Article
In the Mussa and Rosen model [J Econ Theory 18 (1978) 301] of vertical differentiation, a monopolist may optimally choose to underprovide quality if consumers are allowed to buy several units of the indivisible good, even if quality provision involves no cost of any sort.
Article
Full-text available
This contribution investigates the effectiveness and welfare implications of fiscal policies in a context of multilateral trade, when traders behave strategically. The present approach deals simultaneously with two aspects of fiscal policies: collecting resources for redistributive purposes and correcting distortions related to imperfectly competit...
Article
Full-text available
We consider a situation of duopolistic competition in the press industry, involving two editors competing in both the newspapers' and advertising markets. The population of readers in this market is differentiated in terms of their attitudes toward advertising; some of them are assumed to be advertising-lovers, while the remaining ones are assumed...
Article
The press industry depends in a crucial way on the possibility of financing an important fraction of its activities by advertising receipts. We show that this may induce the editors of the newspapers to moderate the political message they display to their readers, compared with the political opinions they would have expressed otherwise. "As mass ad...
Article
Full-text available
We briefly review the rationale behind technological alliances and provide a snapshot of their role in global competition, especially insofar as it is based around intellectual capital. They nicely illustrate the increased importance of horizontal agreements and thus establish the relevance of the topic. We move on to discuss the organisation of in...
Article
The press industry depends in a crucial way on the possibility of financing an important fraction of its activities by advertising receipts. We show that this induces the editors of newspapers to moderate, in several cases, the political message they display to their readers, compared with the political opinions they would have expressed otherwise....
Article
Full-text available
We show that thesiL2 fact that a monop olip sells a good iuni whi h areiLL2 may wellilL2 hi to select aquali y for hi product whi hi s not thehiL20 one, even i no cost of any sorti attached toquali y i vement. # CORE,uni ersi ecatholi de Louvai + CEREC, Facultesuni ersiL2 Sai t-Loui & CORE,uni ersi ecatholi0 de Louvai 1. Even leavingaside price dis...
Article
We consider a duopoly industry with two separate firms each selling an indivisible product. The joint consumption of these goods has a specific value for the consumers which exceeds the mere addition of utilities when products are consumed in isolation: the higher this excess, the larger the complementarity between the goods. We analyse price equil...
Article
The press industry depends in a crucial way on the possibility of financing an important fraction of its activities by advertising receipts. We show that this induces the editors of the newspapers to moderate the political message they display to their readers in order to make their newspaper more attractive as a media support for the advertisers,...
Article
Full-text available
We analyse the rivalry between two TV-channels competing both on the market for audience and the market for advertising. We identify the nature of TV-programs emerging from this competition, and the quantity of advertising that TV-viewers will have to attend at equilibrium. Finally, we examine how a government's regulation of this quantity will aff...
Book
Perfect competition provides a model of a frictionless economy in which economic agents behave independently of each other, abandoning to the market the task of coordinating their individual decisions. This model is extensively studied in traditional price theory textbooks. Imperfect competition is the paradigm that develops when, on the contrary,...
Chapter
Perfect competition provides a model of a frictionless economy in which economic agents behave independently of each other, abandoning to the market the task of coordinating their individual decisions. This model is extensively studied in traditional price theory textbooks. Imperfect competition is the paradigm that develops when, on the contrary,...
Chapter
Perfect competition provides a model of a frictionless economy in which economic agents behave independently of each other, abandoning to the market the task of coordinating their individual decisions. This model is extensively studied in traditional price theory textbooks. Imperfect competition is the paradigm that develops when, on the contrary,...
Chapter
Perfect competition provides a model of a frictionless economy in which economic agents behave independently of each other, abandoning to the market the task of coordinating their individual decisions. This model is extensively studied in traditional price theory textbooks. Imperfect competition is the paradigm that develops when, on the contrary,...
Chapter
Perfect competition provides a model of a frictionless economy in which economic agents behave independently of each other, abandoning to the market the task of coordinating their individual decisions. This model is extensively studied in traditional price theory textbooks. Imperfect competition is the paradigm that develops when, on the contrary,...
Chapter
Perfect competition provides a model of a frictionless economy in which economic agents behave independently of each other, abandoning to the market the task of coordinating their individual decisions. This model is extensively studied in traditional price theory textbooks. Imperfect competition is the paradigm that develops when, on the contrary,...
Chapter
Perfect competition provides a model of a frictionless economy in which economic agents behave independently of each other, abandoning to the market the task of coordinating their individual decisions. This model is extensively studied in traditional price theory textbooks. Imperfect competition is the paradigm that develops when, on the contrary,...
Chapter
Perfect competition provides a model of a frictionless economy in which economic agents behave independently of each other, abandoning to the market the task of coordinating their individual decisions. This model is extensively studied in traditional price theory textbooks. Imperfect competition is the paradigm that develops when, on the contrary,...

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