Persistent Link:
http://hdl.handle.net/10150/596000
Title:
Technology Advancement in Network Markets and Agent Bargaining
Author:
Ingersoll, William Robert
Issue Date:
2016
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
I extend the Katz and Shapiro (1985) oligopoly model with network effects to encompass products with differing technological levels. I focus on a version of the model in which firms can invest in order to improve the probability that they advance their technology from a low level to a high level. I find that better available technology, lower adoption costs, and stronger network effects increase the rate of technological advancement and social welfare. Incompatible networks have lower total surplus but higher adoption rates. The investment competition dissipates to some degree the potential producer rents from successful advancement, particularly in the incompatible network case where increased competition can result in lower total welfare. A policy imposing a technology standard (via a high type technology requirement) yields the highest adoption rates, but negatively affects overall welfare. Analysis of the optimal tax/subsidy policy shows that taxes are optimal in most cases, since the private incentive to advance technology outweighs the social incentive. Negotiations in the real world can rarely be represented by a simple bargaining session between two parties. Agent bargaining, when one player represents another party in a bargaining situation for some form of compensation, is one such complicating circumstance from the real world. I explore the effects that this third entity has on the outcome of negotiations. I conduct a laboratory experiment emulating a simple example of agent bargaining. I test a hypothesis formulated using sequential-Nash-bargaining and also propose behavioral explanations for the observed behavior. I find that sequential-Nash-bargaining does a poor job of explaining our observations, and that using a weighted minimization of the differences between each of the three parties as a focal point provides a promising alternative.
Type:
text; Electronic Dissertation
Keywords:
Economics; Experiment; Industrial Organization; Networks; Technology; Bargaining
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Graduate College; Economics
Degree Grantor:
University of Arizona
Advisor:
Reynolds, Stanley

Full metadata record

DC FieldValue Language
dc.language.isoen_USen
dc.titleTechnology Advancement in Network Markets and Agent Bargainingen_US
dc.creatorIngersoll, William Roberten
dc.contributor.authorIngersoll, William Roberten
dc.date.issued2016en
dc.publisherThe University of Arizona.en
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en
dc.description.abstractI extend the Katz and Shapiro (1985) oligopoly model with network effects to encompass products with differing technological levels. I focus on a version of the model in which firms can invest in order to improve the probability that they advance their technology from a low level to a high level. I find that better available technology, lower adoption costs, and stronger network effects increase the rate of technological advancement and social welfare. Incompatible networks have lower total surplus but higher adoption rates. The investment competition dissipates to some degree the potential producer rents from successful advancement, particularly in the incompatible network case where increased competition can result in lower total welfare. A policy imposing a technology standard (via a high type technology requirement) yields the highest adoption rates, but negatively affects overall welfare. Analysis of the optimal tax/subsidy policy shows that taxes are optimal in most cases, since the private incentive to advance technology outweighs the social incentive. Negotiations in the real world can rarely be represented by a simple bargaining session between two parties. Agent bargaining, when one player represents another party in a bargaining situation for some form of compensation, is one such complicating circumstance from the real world. I explore the effects that this third entity has on the outcome of negotiations. I conduct a laboratory experiment emulating a simple example of agent bargaining. I test a hypothesis formulated using sequential-Nash-bargaining and also propose behavioral explanations for the observed behavior. I find that sequential-Nash-bargaining does a poor job of explaining our observations, and that using a weighted minimization of the differences between each of the three parties as a focal point provides a promising alternative.en
dc.typetexten
dc.typeElectronic Dissertationen
dc.subjectEconomicsen
dc.subjectExperimenten
dc.subjectIndustrial Organizationen
dc.subjectNetworksen
dc.subjectTechnologyen
dc.subjectBargainingen
thesis.degree.namePh.D.en
thesis.degree.leveldoctoralen
thesis.degree.disciplineGraduate Collegeen
thesis.degree.disciplineEconomicsen
thesis.degree.grantorUniversity of Arizonaen
dc.contributor.advisorReynolds, Stanleyen
dc.contributor.committeememberReynolds, Stanleyen
dc.contributor.committeememberFishback, Price V.en
dc.contributor.committeememberStegeman, Marken
dc.contributor.committeememberWalker, Marken
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