Competitive location and capacity decisions for firms serving time‐sensitive customers

In this article we explore how two competing firms locate and set capacities to serve time‐sensitive customers. Because customers are time‐sensitive, they may decline to place an order from either competitor if their expected waiting time is large. We develop a two‐stage game where firms set capacities and then locations, and show that three types of subgame perfect equilibria are possible: local monopoly (in which each customer is served by a single firm, but some customers may be left unserved), constrained local monopoly (in which firms serve the entire interval of customers but do not compete with each other), and constrained competition (in which firms also serve the entire interval of customers, but now compete for some customers). We perform a comparative statics analysis to illustrate differences in the equilibrium behavior of a duopolist and a coordinated monopolist. © 2008 Wiley Periodicals, Inc. Naval Research Logistics, 2008     

地下战场——未来战争的新空间

武器装备科研生产军民融合效率关系到国家的军事效益、经济效益和社会效益。其效率的提升对于军民融合向更广范围、更高层次、更深程度发展具有重要意义。文章将以"马歇尔冲突"为背景,就如何协调武器装备市场中的竞争效率和规模经济效率关系从而实现综合效率最大化进行分析。     

Some implications of pricing bundles

In this article, we consider a problem in which two suppliers can sell their respective products both individually and together as a bundle, and study the impact of bundle pricing. Four pricing models (centralized, decentralized, coop–comp, and comp–coop) are analyzed with regard to the competition formats and sequences. As one would expect, the firms are always better off when pricing decisions are centralized. However, rather surprisingly, we find that firms may be worse off if the bundle prices are set in a cooperative way; we provide analytical characterization of those instances. Numerical studies show that these insights also hold for some nonlinear demand. © 2013 Wiley Periodicals, Inc. Naval Research Logistics, 2013     

Wisdom without tears: Statecraft and the uses of history

The world is mired in history again, as historical modes of competition return and historical grievances fuel the policies of multiple revisionist actors. If the end of history has ended, then it follows that the time is ripe for an engagement with history’s wisdom. We argue that the making of American statecraft—the deliberate, coordinated use of national power to achieve important objectives—can be significantly enhanced by a better understanding of the past. This essay, which draws on the extensive literature on history and statecraft, U.S. foreign policy, and the author’s own research and experiences, offers a defense of the use of history to improve statecraft, as well as a typology of ten distinct ways in which an understanding of history can improve government policy.     

Research communication

A UK House of Commons Defence Committee (HCDC) Report on the Gulf War recommended that the UK should be self‐sufficient in supporting its Armed Forces in times of crisis and not even rely on its Allies. This recommendation is at odds with UK Government policy which rejects any formal strategy of support for the defence industrial base preferring international open competition as its procurement philosophy. This paper examines the various factors ranging from the supply of raw materials, production capacity, stockpiling, international joint ventures, and competition through to the effects on the technological update of weapon systems resulting from this philosophy. It draws conclusions supporting the HCDC recommendation and calls for joint MOD‐Industry action to address the issues involved and thereby reduce the risks to the Defence of the Realm.     

Rent‐seeking models of international competition: An experimental investigation*

This paper experimentally tests a number of hypotheses that follow from models of international competition that are based on Tullock style rent‐seeking models. Specifically, we designed and performed experiments to see how variations in the degree of publicness in the prize as well as changes in the values assigned to the prize affect alliances in terms of individual nation contributions, total contributions, burden sharing, and the likelihood of winning the prize. While there was substantial variation in individual behavior, the results of the experiments generally conform to the theoretical predictions of the rent‐seeking model of international competition and alliances.     

Evergreening and operational risk under price competition

“Evergreening” is a strategy wherein an innovative pharmaceutical firm introduces an upgrade of its current product when the patent on this product expires. The upgrade is introduced with a new patent and is designed to counter competition from generic manufacturers that seek to imitate the firm's existing product. However, this process is fraught with uncertainty because the upgrade is subject to stringent guidelines and faces approval risk. Thus, an incumbent firm has to make an upfront production capacity investment without clarity on whether the upgrade will reach the market. This uncertainty may also affect the capacity investment of a competing manufacturer who introduces a generic version of the incumbent's existing product but whose market demand depends on the success or failure of the upgrade. We analyze a game where capacity investment occurs before uncertainty resolution and firms compete on prices thereafter. Capacity considerations that arise due to demand uncertainty introduce new factors into the evergreening decision. Equilibrium analysis reveals that the upgrade's estimated approval probability needs to exceed a threshold for the incumbent to invest in evergreening. This threshold for evergreening increases as the intensity of competition in the generic market increases. If evergreening is optimal, the incumbent's capacity investment is either decreasing or nonmonotonic with respect to low end market competition depending on whether the level of product improvement in the upgrade is low or high. If the entrant faces a capacity constraint, then the probability threshold for evergreening is higher than the case where the entrant is not capacity constrained. Finally, by incorporating the risk‐return trade‐off that the incumbent faces in terms of the level of product improvement versus the upgrade success probability, we can characterize policy for a regulator. We show that the introduction of capacity considerations may maximize market coverage and/or social surplus at incremental levels of product improvement in the upgrade. This is contrary to the prevalent view of regulators who seek to curtail evergreening involving incremental product improvement. © 2016 Wiley Periodicals, Inc. Naval Research Logistics 63: 71–89, 2016     

Jihad Against Palestinians? The Herostratos Syndrome and the Paradox of Targeting European Jews

Abstract

This paper addresses the waves of mass killings recently perpetrated by individuals with a weak or nonexistent ideological motivation, whose acts either appear to contradict their purported political cause or are admittedly driven by a quest for notoriety. Examples range from killers who have been waging jihad against European Jews to unattached mass killers such as the Germanwings pilot to the perpetrators of mass school shootings in America and worldwide. We argue that these phenomena can be understood as instances of the Herostratos syndrome, which has been known for thousands of years as characterizing the behavior of people who seek to survive in the collective memory by excelling in their infamous acts. We provide a model of hybrid killers which accommodates the Herostratic motive alongside a political motive and characterize a well-behaved Nash equilibrium where Herostratic killers are competing with one another with a view to make a name for themselves in infamy. The policy implications point towards reducing the publicity the killers enjoy, thus frustrating their quest for notoriety.     

Flexible capacity strategy in an asymmetric oligopoly market with competition and demand uncertainty

This article studies flexible capacity strategy (FCS) under oligopoly competition with uncertain demand. Each firm utilizes either the FCS or inflexible capacity strategy (IFCS). Flexible firms can postpone their productions until observing the actual demand, whereas inflexible firms cannot. We formulate a new asymmetrical oligopoly model for the problem, and obtain capacity and production decisions of the firms at Nash equilibrium. It is interesting to verify that cross‐group competition determines the capacity allocation between the two groups of firms, while intergroup competition determines the market share within each group. Moreover, we show that the two strategies coexist among firms only when cost differentiation is medium. Counterintuitively, flexible firms benefit from increasing production cost when the inflexible competition intensity is sufficiently high. This is because of retreat of inflexible firms, flexibility effect, and the corresponding high price. We identify conditions under which FCS is superior than IFCS. We also demonstrate that flexible firms benefit from increasing demand uncertainty. However, when demand variance is not very large, flexible firms may be disadvantaged. We further investigate the effects of cross‐group and intergroup competition on individual performance of the firms. We show that as flexible competition intensity increases, inflexible firms are mainly affected by the cross‐group competition first and then by the intergroup competition, whereas flexible firms are mainly affected by the intergroup competition. Finally, we examine endogenous flexibility and identify its three drivers: cost parameters, cross‐group competition, and intergroup competition. © 2017 Wiley Periodicals, Inc. Naval Research Logistics 64: 117–138, 2017     

球类比赛对大学生球迷竞争意识的积极影响

通过各类球赛对大学生球迷竞争意识的积极影响研究与分析,球赛对不同大学生球迷的影响具差异性。大学生球迷对竞争意识认识不足,争取优胜的信念还有待提高,对外界事物的判断、认识不够准确,参与社会活动内容贫乏,形式单一,选择性少。随着年龄和学龄的增长,在生活与实践中的竞争意识得到进一步强化。球赛本身激烈性和内容丰富性的特点,可以有效地激发和培养大学生球迷的竞争意识,同时也强化了大学生球迷的竞争意识。