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Author

Hodaka Morita

Other affiliations: University of New South Wales
Bio: Hodaka Morita is an academic researcher from Hitotsubashi University. The author has contributed to research in topics: Oligopoly & Duopoly. The author has an hindex of 17, co-authored 73 publications receiving 963 citations. Previous affiliations of Hodaka Morita include University of New South Wales.


Papers
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Journal ArticleDOI
TL;DR: In this paper, the authors analyzed a successive vertical oligopoly model that explicitly incorporates vertical relationships between industries and showed that free entry in an industry that produces a homogeneous product can lead to a socially insufficient, rather than excessive, number of firms.
Abstract: We offer a new perspective on social efficiency of free entry through analyzing a successive vertical oligopoly model that explicitly incorporates vertical relationships between industries. We demonstrate that free entry in an industry that produces a homogeneous product can lead to a socially insufficient, rather than excessive, number of firms. This is in contrast to the previous findings in the theoretical industrial organization literature, which found that, in homogeneous final-product markets with Cournot oligopoly and fixed set-up costs, level of entry in the free-entry equilibrium is always socially excessive. In our framework, this previous finding arises as a special case where the downstream or the upstream sector has no market power. It has often been argued that this standard result can provide a justification for apparently anticompetitive entry regulations. Our insufficient entry result indicates that such a justification is not necessarily valid, when vertical relationships are taken into account. This yields an important policy implication, given that entry regulations have often been imposed on industries that produce relatively homogeneous intermediate products.

84 citations

Journal ArticleDOI
TL;DR: In this paper, the holdup problem in repeated transactions between a seller and a buyer such that the seller makes relation-specific investments in each period is studied, where the investment affects the renegotiation price in general, and the alternative-use value in particular.
Abstract: We study the holdup problem in repeated transactions between a seller and a buyer such that the seller makes relation-specific investments in each period. We show that where, under spot transaction, formal contracts have no value because of the cooperative nature of investment, writing a simple fixed-price contract can be valuable under repeated transactions: There is a range of parameter values in which a higher investment can be implemented only if a formal price contract is written and combined with a relational contract. We also show that there are cases in which not writing a formal contract but entirely relying on a relational contract increases the total surplus of the buyer and the seller. The key condition is how the investment affects the renegotiation price in general, and the alternative-use value in particular.

76 citations

Journal ArticleDOI
TL;DR: In this article, a successive vertical oligopoly model that incorporates vertical relationships between industries is analyzed and it is shown that free entry in an industry that produces a homogeneous product can lead to a socially insufficient number of firms.
Abstract: We analyze a successive vertical oligopoly model that incorporates vertical relationships between industries and demonstrate that free entry in an industry that produces a homogeneous product can lead to a socially insufficient number of firms. This is in contrast with the proevious findings that, under Cournot oligopoloy with fixed set-up costs, level of entry in the free-entry equilibrium is socially excessive. It has often been argued that this result can provide a justification for apparently anticompetitive entry regulations. Our finding yields an important policy implication that such a justification is not necessarily valid when vertical relationships ar taken into account.

73 citations

Journal ArticleDOI
TL;DR: In this article, the authors present a theoretical and empirical analysis of internal promotion versus external recruitment, using a job-assignment model involving competing firms with heterogeneous productivities and two-level job hierarchies with one managerial position.
Abstract: We present a theoretical and empirical analysis of internal promotion versus external recruitment, using a job-assignment model involving competing firms with heterogeneous productivities and two-level job hierarchies with one managerial position. The model predicts that, controlling for the number of managers, increasing the number of lower-level workers is associated with (1) greater internal promotion as opposed to external recruitment, (2) higher profit, and (3) more general training. Empirical analysis of a large cross section of British employers is consistent with these predictions.

60 citations

Journal ArticleDOI
TL;DR: This article showed that free entry in an industry producing a homogeneous final product leads to a socially insufficient number of firms when the suppliers of the intermediate products have sufficiently strong bargaining power, which is in contrast to previous findings in the theoretical industrial organization literature, which demonstrate that the level of entry in the free-entry equilibrium is always socially excessive.

55 citations


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Posted Content
01 Jan 2012
TL;DR: The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray as discussed by the authors, and a good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan's economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker's Rule.
Abstract: The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

3,447 citations

Journal Article

741 citations

Journal ArticleDOI
TL;DR: Support is found for the hypothesis that intergroup discrimination in cooperation is the result of ingroup favoritism rather than outgroup derogation, and situations that contain interdependence result in stronger ingroups favoritism.
Abstract: Although theory suggests individuals are more willing to incur a personal cost to benefit ingroup members, compared to outgroup members, there is inconsistent evidence in support of this perspective. Applying meta-analytic techniques, we harness a relatively recent explosion of research on intergroup discrimination in cooperative decision making to address several fundamental unresolved issues. First, summarizing evidence across studies, we find a small to medium effect size indicating that people are more cooperative with ingroup, compared to outgroup, members (d = 0.32). Second, we forward and test predictions about the conditions that moderate ingroup favoritism from 2 influential perspectives: a social identity approach and a bounded generalized reciprocity perspective. Although we find evidence for a slight tendency for ingroup favoritism through categorization with no mutual interdependence between group members (e.g., dictator games; d = 0.19), situations that contain interdependence result in stronger ingroup favoritism (e.g., social dilemmas; d = 0.42). We also find that ingroup favoritism is stronger when there is common (vs. unilateral) knowledge of group membership, and stronger during simultaneous (vs. sequential) exchanges. Third, we find support for the hypothesis that intergroup discrimination in cooperation is the result of ingroup favoritism rather than outgroup derogation. Finally, we test for additional moderators of ingroup favoritism, such as the percentage of men in the sample, experimental versus natural groups, and the country of participants. We discuss the implications of these findings for theoretical perspectives on ingroup favoritism, address implications for the methodologies used to study this phenomenon, and suggest directions for future research.

582 citations