Zhiqi Chen

Bio: Zhiqi Chen is an academic researcher from Carleton University. The author has contributed to research in topics: Unemployment & Competition (economics). The author has an hindex of 20, co-authored 81 publications receiving 1670 citations. Previous affiliations of Zhiqi Chen include Xiamen University & Carleton College.

A Cournot-Nash Model of Family Decision Making

Abstract: This paper develops a model of two person family. Each family member attempts to maximize his or her own utility. Yet they are interdependent in two respects. Family members are interdependent, first of all, because they care about each other. Second, there are local public goods or household expenditures within the family, such as housing. The presence of household expenditures means that one family member's consumption choices affect the other family member's level of well-being. The two family members' interdependent utility maximization problems are first solved using a non-cooperative, or Cournot-Nash, game theoretic framework then the model is extended to take the Cournot-Nash equilibrium as a threat point in a bargaining game. The model's predictions differ substantially from the "unitary" framework usually used in economic analysis, in which households maximize a single household utility function. When the spouses are relatively equal in income, or when one spouse is much wealthier than the other and the wealthier spouse has all the bargaining power in the family, the equilibrium depends, as in the unitary model, on household income but not on the division of income between spouses. In the intermediate case between equality and substantial inequality or in the case where one spouse is much wealthier than the other but the wealthier spouse does not have all the bargaining power, the distribution of income does shape expenditure patterns, contrary to the predictions of the unitary model. The contribution of the paper is to provide a rigorous derivation of the properties of household demands in the Cournot-Nash setting, a full analysis of the determinants of intra-household resource allocation, including the effect of varying household bargaining power, and an explication of the model’s implications for policy analysis.

A Cournot-Nash Model of Family Decision Making

Abstract: This paper models a two-person family. Each family member is utility maximising, yet family members are interdependent because of caring and public goods within the family. The two family members’ interdependent utility maximisation problems are first solved using a non-cooperative, or Cournot–Nash, game theoretic framework. The Cournot–Nash equilibrium is then used as a threat point in a bargaining game. The paper provides a rigorous derivation of the properties of household demands, a full analysis of the determinants of intra-household resource allocation, including the effect of varying household bargaining power, and consideration of policy implications.

Dominant retailers and the countervailing-power hypothesis

Abstract: I assess rigorously the countervailing-power hypothesis using a model that captures the main ingredients of Galbraith's (1952) arguments as well as some of the important features of the retail industry. I demonstrate that an increase in the amount of countervailing power possessed by a dominant retailer can indeed lead to a fall in retail prices for consumers. However, total surplus does not always increase with the rise of countervailing power because of the possible efficiency loss in retailing. Furthermore, the presence of fringe competition is crucial for countervailing power to benefit consumers.

Long-Run Equilibria in a Dynamic Heckscher-Ohlin Model

Abstract: The goal of this paper is to study long-run equilibria in open economies using a new dynamic Heckscher-Ohlin model with endogenous savings and endogenous labor supply. The long-run equilibria in this model exhibit the property of economic hysteresis. The model offers a Heckscher-Ohlin type explanation for the long-run trade between countries with identical preferences; that is, a difference in factor endowment ratios in the initial period causes trade to continue in the long run. It is shown that factors other than differences in preferences can lead to a difference in savings rates among countries.

Strategic Alliances, Shared Facilities, and Entry Deterrence

Abstract: We explore some possible anticompetitive effects of one particular type of strategic alliance--common in the airline industry, among others--that involves the sharing of production capacity. An offer to share an existing facility can allow an incumbent to persuade a potential entrant not to build its own facility. We establish conditions under which an agreement to share will be anticompetitive in the sense that, absent the agreement, a more competitive outcome (i.e., entry with new capacity) would have obtained. Such alliances can reduce welfare even if the incumbent and entrant will not be direct competitors.

The Economic Institutions of Capitalism

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.

A Primer on Foreclosure

Abstract: This chapter analyzes the private rationale and the social costs and benefits of market foreclosure, here defined as a firm's restriction of output in one market through the use of market power in another market. The chapter first focuses on vertical foreclosure (in which full access to a bottleneck input is denied to competitors) and provides an overview of the theory of access to an essential facility in an unregulated environment. It considers a wide array of contexts: possibility of bypass of the bottleneck facility, upstream vs downstream location of this facility, and various exclusionary activities such as vertical integration and exclusive dealing. It identifies a number of robust conclusions as to the social and private costs and benefits of foreclosure. The chapter then turns to horizontal foreclosure, where the monopoly good is sold directly to the end-users, and analyzes recent theories of anti-competitive bundling aimed at reducing competition in the adjacent markets or at protecting the monopoly market. Finally, the chapter tackles exclusive customer contracts and discusses potential efficiency defenses for exclusionary behavior.

Strategic alliances and models of collaboration

Abstract: The purpose of this paper is to engage in a comprehensive review of the research on strategic alliances in the last decade. After presenting a typology of diverse alliance governance forms, we review recent analyses of alliance formation, implementation management, and performance outcomes of collaborative activities. Our findings reveal that strategic alliances developed and propagated as formalized interorganizational relationships. These cooperative arrangements represent new organizational formation that seeks to achieve organizational objectives better through collaboration than through competition. The paper provides future research directions on partner selection, networks patterns and processes, understanding the integration in alliances through fusion, fission, and how to manage developmental dynamics. We conclude with some future directions for theory construction and empirical research.

Strategic alliances and models of collaboration

Abstract: Purpose – The purpose of this paper is to engage in a comprehensive review of the research on strategic alliances in the last decade.Design/methodology/approach – After presenting a typology of diverse alliance governance forms, reviews recent analyses of alliance formation, implementation management, and performance outcomes of collaborative activities.Findings – Strategic alliances developed and propagated as formalized interorganizational relationships. These cooperative arrangements represent new organizational formation that seeks to achieve organizational objectives better through collaboration than through competition.Practical implications – The paper provides future research directions on partner selection, networks patterns and processes, understanding the integration in alliances through fusion, fission, and how to manage developmental dynamics.Originality/value – Concludes with some future directions for theory construction and empirical research.