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In this paper, we report on an equilibrium with market dominance that exists in a simple two-firm model that features neither entry barriers nor sophisticated punishment strategies. This equilibrium induces an intertemporal market division in which the two firms alternate as monopolists--despite the fact that the model also sustains a Cournot duopoly. Even when initially both firms are active in the market, the alternating monopoly reveals itself rather quickly. Moreover, it Pareto dominates the Cournot equilibrium--as it is close to the cartel outcome. Several examples of what well may be such alternating monopolies are presented. JEL classification: C73; D43; L13 Keywords: Dynamic competition; Oligopolistic competition; Stochastic games; Monopoly.

This paper addresses two general questions. First, what is the effect of market structure on the development of a network in a dynamic model with rational expectations? Secondly, is the intuition that network externalities are 'economies of scale on the demand side' correct? These questions are examined in a model of durable good production in the presence of network externalities. Two results are presented. First, the Coase conjecture fails in its strongest sense when network benefits are increasing in the current network size. Secondly, a committed monopolist may be socially preferable to a time consistent producer when network externalities are sufficiently large. The analysis indicates an analogy between network externalities and learning-by-doing.

In a model of two-dimensional spatial competition the notion of competition between market places is analyzed. While one dimension can be interpreted as geographical distance the other dimension is some product characteristic (like maturity of a futures contract). Initially single product firms select a specific location and variety and later, at a second stage, they compete in prices. In the present framework agglomeration economies arise endogenously due to savings in transportation costs for consumers. For many parameter constellations I demonstrate that entrants might prefer to settle in existing markets rather than setting up their business somewhere in between. In particular, the emergence of new market places is less likely as transportation costs decline. Despite the strong forces towards agglomeration, multiple markets will arise under free entry of firms when markets are large enough. Furthermore, pure strategy equilibria in location do exist when search costs are sufficiently important even for linear transportation costs. The agglomeration economies provide organizers of market places with some degree of market power. Indirect competition between fiscal authorities is analyzed when jurisdictions impose transactions taxes. Equilibrium tax rates depend positively on transportation costs. Hence the deregulation wave in financial markets may be understood as an equilibrium reaction to a significant decline in transportation costs. The model features strong incentives for the harmonization of regulation. Keywords: Two-dimensional spatial competition; Thick market externalities; Agglomeration economies; Transaction costs

The increasing globalization of markets witnessed in recent years has been paralleled by growing research attention upon the internationalization of small and medium sized firms. In industrialized nations, a significant degree of dormant export potential has been identified in this firm size sector. The proliferation of extant literature can explain structural, behavioural and process-based aspects of export expansion. However, it remains that limited conceptual and empirical insights exist that explain the phenomena underlying pre-export decision making and behaviour. The present inquiry addresses this issue and investigates those obstacles that act upon domestic firms' intentions to enter overseas markets via the export channel. Specifically, the empirical study documented here establishes significant differences in the extent to which exporting obstacles discourage export engagement amongst varied groups of domestic firms considered in terms of their export intention. It also draws a similar comparison between such groups of non-exporting firms and those already engaged in export operations. The findings are interpreted and discussed in the light of current knowledge and attention is paid towards pertinent implications for export management and future research. Key words - exports, implementation, interfirm comparisons, internationalization, marketing, strategy

This paper contrasts an auction and a dealership market. In the latter, parallel to the public market, market makers are allowed to trade with each other in a separate inter-dealer market. Since market makers are assumed to be risk averse, variations in asset holdings induced by trades with outside investors generate portfolio hedging trade. We find that the price at which market makers trade with each other in the inter-dealer market determines the prices quoted in the public market for outside investors. It is shown that an investor gets a better price in the dealership market as long as the market makers and speculators are imperfectly competitive and the delay between executing the customer's order and trading in the inter-dealer market is not too large. Keywords: Auction market; Dealership market; Inter-dealer trading

This paper re-examines the relationship between the R & D intensity of an industry and its level of concentration, from the perspective of the Bounds approach to market structure. In so doing, it proposes an index which summarises those aspects of technology and tastes that are relevant to the determination of a lower bound to concentration. Keywords: Technology; Market structure; Industrial structure

This paper is the first to study the effect of European antidumping policy on market structure. We analyze the incentives for firms to engage in a domestic or international cartel of implicit collusion in a multi-stage setting and concentrate on how European antidumping policy influences the incentives for firms to collude domestically or internationally. The question whether antidumping regulation helps to establish, maintain or rather endanger full cartels as well as cartels restricted to domestic firms only is tackled. Our findings suggest that antidumping legislation can both have a procompetitive and an anticompetitive effect. Which case prevails depends crucially on the welfare objective function used by the European government and also on the cost asymmetry and the degree of product heterogeneity between domestic and foreign firms. In addition to market structure we also discuss welfare effects. We find that antidumping measures are capable of both increasing or decreasing total community welfare depending on the type of measures installed. Keywords: Antidumping regulation; Market structure; Rent-shifting; Welfare