Miguel Gonzalez-Maestre

• University of Murcia

We assume a multistage oligopoly wherein a given number of innovators compete by selling their substitutive technologies. Each innovator sequentially and independently chooses how many licenses to sell, and subsequently, all licensees compete à la Cournot in the product market. We show that, in equilibrium, the total number of licensees grows expon...

In a two-sector economy, we consider the endogenous determination of the level of competition in the imperfectly competitive sector, under democratic, non-manipulated voting. In the context of the Salop’s (1979) circular model, we identify conditions such that in addition to a competitive equilibrium (with most voters choosing the efficient level o...

Under spatial product differentiation and product design, we identify conditions for either excessive or insufficient firm entry. We extend previous settings, based on the Salop circular model, to analyze the combined role of positive demand elasticity and endogenous targeted product design. First, we show that, given the number of firms, the equil...

We consider the price and welfare effects of competition in targeted product design, in the context of the Salop circle model. Changes in product design lead to demand rotations that set the stage for our analysis. With an exogenous number of firms, we show that the degree of targeted product design tends to increase with the number of firms. Moreo...

Motivated by the fact that some regulations involve extra costs for those firms at a size beyond a critical threshold, this paper contributes to the analysis of the welfare distortions due to these regulations. In the context of a duopoly, our results show that social welfare is not monotonic with the regulatory threshold. In particular, we obtain...

We analyze optimal merger policy in R&D-intensive industries with product innovation aiming to improve the quality of products. Our results suggest that a permissive merger policy is rarely optimal in high-tech industries when the antitrust authority considers a welfare standard that balances the impact of mergers on consumers’ surplus and firms’ p...

This paper considers the role of basic research and development (R&D) investment in vertical markets in which an incumbent owner of a basic technological input faces potential competition. We identify the conditions under which the socially optimal investment in basic research involves entry by new firms. Our main insight is that there is a role fo...

In this study, we consider the role of a publicly owned platform and programme quality in the free-to-air broadcasting industry. We compare the equilibrium levels of advertising under private and mixed duopoly competition, and show that the connection between programme quality and advertising incentives is drastically different in each scenario. We...

Reaching high levels of artistic creation in a society requires institutions that facilitate the sorting of the most talented individuals of each generation and the development of their skills throughout the artistic career. The impact of long copyrights is not straightforward in this respect. This paper takes a professional career approach to anal...

We consider the role of the endogenous choice of platform quality in a broadcasting duopoly market where competing media platforms choose also their level of advertising. We compare the equilibrium levels of quality, advertising and welfare under private and mixed duopoly competition. We show that the welfare comparison between the private and mixe...

We provide a new perspective on the impact of unauthorized copying and copy levies on artistic creation. Our analysis emphasizes three important aspects of artistic markets: the predominance of superstars, the dynamics of talent sorting, and the importance of promotion expenditures. In the short run, piracy reduces superstars’ earnings and market s...

Can an increasing number of firms exacerbate problems related to asymmetric information on product quality? We analyze the potential trade-off between variety and information using Salop’s (1979) framework by introducing quality uncertainty and a simple information diffusion process. As the number of firms increases, the marginal benefits of low pr...

We consider the role of a publicly-owned platform and program quality in the free to air broadcasting industry. We compare the equilibrium levels of advertising under private and mixed duopoly competition, and show that the connection between program quality and advertising incentives are drastically different between both scenarios. We also consid...

This paper focuses on the optimal regulation regarding technology transfer and mergers in a duopoly model where two complementary technologies can be developed. On the one hand, we show that there are cases where a prohibitive policy regarding (cross) licensing agreements can be socially desirable. On the other hand, our analysis stresses that, in...

Continuous growth, innovation and globalization have produced an outburst in the number of brands available to consumers. If prod-ucts' quality is uncertain and the total amount of information that consumers are able to gather is somewhat limited, a larger number of brands may bring about less average information about each product's quality. This...

One of the most conspicuous changes in the economic environment over the last decades has been the increase in the number of brands available to consumers. In this paper we argue that if consumers' uncertainty about the quality of goods is significant, a larger number of brands may bring about less average information about quality; this in turn ma...

This paper deals with the role of basic R&D investment in vertical markets where an incumbent owner of a basic technological input faces potential competition. We show that the socially optimal investment in basic research is the maximum level of this variable such that this

This paper analyzes the optimal antitrust policy in the context of a patent race. In a simplified model, we identify the conditions under which allowing cooperation yields greater welfare than imposing competition. In view of our results, we discuss, critically, the current European policy towards R&D cooperation.

We consider the interactions between innovation and merger policy under di erent assumptions on technology transfer. In the absence of licencing, we show that in some cases the government must commit to a permissive policy to ensure that socially desirable innovations take place, while in other cases it must commit to a prohibitive policy to deter...

In this paper, we consider the effect of union structure on the adoption of innovation in the context of Cournot duopoly. With a market size large enough, we show that the incentive to innovate is higher under a decentralized union structure (with each firm facing its own independent union) than under an industry-wide union. However, for a small ma...

In this paper, we consider the interactions between the use of strategic delegation and mergers in the context of a Cournot oligopoly with linear demand and cost functions. It is assumed that, after the merging process is completed, the owner of every independent firm decides its managerial incentive for his manager. In the case of exogenous merger...

In this paper we study the optimal import policy in an oligopolistic market with a given number of quantity-setting firms. In the absence of fixed costs, we show that if the policy instrument is an import quota, the optimal policy is either free trade or autarky, while if the instrument is a tariff the optimal policy is neither free trade nor autar...

This paper assumes that firms can create independent divisions which compete in a market where the product is spatially differentiated. Our first result is that if the number of firms is exogenous and higher than some critical level, then the symmetric subgame perfect equilibrium converges to perfect competition when the cost of divisionalization c...

We consider a model where oligopolistic firms create independent divisions or franchises, which subsequently delegate output decisions to managers. We show that the number of firms required to make divisionalization privately profitable is greater in our model than in previous pure divisionalization models. However, in contrast with pure delegation...

In this paper, we assume that firms can create independent divisions which compete in quantities in a homogeneous good market. Assuming identical firms and constant returns to scale, we prove that the strategic interaction of firms yields Perfect Competition if the number of firms is beyond some critical level. Assuming a fixed cost per firm and an...

In this paper we analyze the effect strategic delegation on the profitability of mergers in the context of a Cournot oligopoly with linear demand and cost functions. It is assumed that, after the merging process is completed, the owner of every independent firm decides its managerial incentive for his manager. We show that the required fraction of...

In this paper we consider the interactions between the use of strategic delegation and mergers in the context of a Cournot oligopoly with linear demand and cost functions. It is assumed that, after the merging process is completed, the owner of every independent firm decides its managerial incentive for his manager. In the context of endogenous mer...

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...

We identify incentives generated by the Bretton Woods II system that may have contributed to the sub-prime liquidity crisis now working its way through the international monetary system. We then evaluate the persistent conjecture that the liquidity crisis is or will become a balance of payments crisis for the United States. Given that it happens, t...

We analyze artistic markets considering three key distinctive fea-tures that have been overlooked by the standard analysis on intellec-tual property. These features are the dynamic link between the cur-rent number of young artists and future high-quality artistic creation, Rosen's superstars phenomenon, and the role played by promotion costs. Intro...

This paper discusses the role of copying and intellectual property rights in the context of artistic markets. Based on the distinction between stars and modest artists and on the use of advertising, we show in a static model that, under reasonable conditions, weakening intellectual property rights reduces stars'rents but widens the market for modes...

This paper assumes that firms can create independent divisions which compete in a market where the product is spatially differentiated. Our first result is that if the number of firms is exogenous and higher than some critical level, then Perfect Competition is the only Subgarne Perfect EquiLibrium. On the other hand, if we assume free entry and a...