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- Privatization and government preferences in a mixed duopoly: Stackelberg versus CournotPublication . Ferreira, Fernanda A.; Ferreira, FlávioWe analyse the relationship between the privatization of a public firm and government preferences for tax revenue, by considering a (sequential) Stackelberg duopoly with the public firm as the leader. We assume that the government payoff is given by a weighted sum of tax revenue and the sum of consumer and producer surplus. We get that if the government puts a sufficiently larger weight on tax revenue than on the sum of both surpluses, it will not privatize the public firm. In contrast, if the government puts a moderately larger weight on tax revenue than on the sum of both surpluses, it will privatize the public firm. Furthermore, we compare our results with the ones previously published by an other author obtained in a (simultaneous) Cournot duopoly.
- Price-setting hotel competition with corporate social responsibilityPublication . Ferreira, Fernanda A.; Ferreira, Flávio; Gomes, Carlos Francisco SimõesPricing plays an important role in any market competition, but particularly in those businesses that hold a seat in hyper competitive economic activities such as hotels. This paper analyses a market competition between one corporate social responsibility (CSR) hotel and one for profit (FP) hotel, in which both hotels set room prices. We study three different market behaviors: (i) both hotels take their decisions simultaneously; (ii) the CSR hotel takes the leader position; (iii) the FP hotel takes the leader position. For each situation, by using game theory techniques, we compute the different outcomes of the model at equilibrium. We also describe the effects of CSR on the outcomes.
- Desirable role in an international duopoly model with tariffsPublication . Ferreira, Fernanda A.; Ferreira, FlávioIn this paper, we study an international market model in which the home government imposes a tariff on the imported goods. The model has two stages. In the first stage, the home government chooses an import tariff to maximize a function that cares about the home firm’s profit and the total revenue. Then, the firms engage in a Cournot or in a Stackelberg competition. We compare the results obtained in the three different ways of moving on the decision make of the firms.
- Environmental policies in an international mixed duopolyPublication . Ferreira, Fernanda A.; Ferreira, FlávioThe purpose of this paper is to study the effects of environmental and trade policies in an international mixed duopoly serving two markets. We suppose that the firm in the home country is a welfare-maximizing public firm, while the firm in the foreign country is its own profit-maximizing private firm. We find that the environmental tax can be a strategic instrument for the home government to distribute production from the foreign private firm to the home public firm. An additional effect of the home environmental tax is the reduction of the foreign private firm's output for local consumption, thereby expanding the foreign market for the home public firm.
- Quality competition, environmental policies and reputation of restaurantsPublication . Ferreira, Flávio; Ferreira, Fernanda A.In this paper, we incorporate environment issues into a quality and quantity competition between two asymmetric restaurants We apply Game Theory (Game Theory is the study of mathematical models of strategic interaction between rational decision-makers) to study a competition of restaurant industry, defining a three-stage model. We compute the subgame perfect equilibrium, and we analyse the effects of the effects of difference of restaurants' reputation on the equilibrium outputs. As a result, we get that the increase in the reputation difference between restaurants reduces the quality and output of the small restaurant, and increases the quality and output of the large restaurant, being the overall effect an increase in the total quality and the aggregate quantity in the market. Moreover, the increase in the reputation difference between restaurants decreases profits of the small restaurant and raises both social welfare and profits of the large restaurant. In conclusion, restaurants' reputation has an important impact on the environmental deterioration. The effects of the valuation of the environment by the government are also investigated. We show that as the government values more the environment, emission standards are reduced, as well as quality and quantity of meals produced by both small and large restaurants. Furthermore, the increase in the valuation of the environment by the government raises social welfare and decreases profits of the large restaurant, while it is ambiguous for the small restaurant's profits. So, governments have tools they can use to control environmental degradation.
- Licensing endogenous cost-reduction in a differentiated Stackelberg modelPublication . Ferreira, Flávio; Bode, Oana R.In this paper we consider a differentiated Stackelberg model, when the leader firm engages in an R&D process that gives an endogenous cost-reducing innovation. The aim is to study the licensing of the cost-reduction by a two-part tariff. By using comparative static analysis, we conclude that the degree of the differentiation of the goods plays an important role in the results. We also do a direct comparison between our model and Cournot duopoly model.
- Two new power indices based on winning coalitionsPublication . Alonso-Meijide, J. M.; Ferreira, Flávio; Álvarez-Mozos, M.; Pinto, Alberto A.Deegan and Packel (1979) and Holler (1982) proposed two power indices for simple games: the Deegan–Packel index and the Public Good Index. In the definition of these indices, only minimal winning coalitions are taken into account. Using similar arguments, we define two new power indices. These new indices are defined taking into account only those winning coalitions that do not contain null players. The results obtained with the different power indices are compared by means of two real-world examples taken from the political field.
- Partial privatization and government preferencePublication . Ferreira, Fernanda A.; Ferreira, FlávioStudies of mixed oligopoly models have been increasingly popular in recent years. We can say that the main concerns of the privatization studies are the welfare effect and the method of privatization. Ferreira and Ferreira (2014) analysed the relationship between the privatization of a public firm and government preferences for tax revenue in a duopoly model, by assuming that the government payoff is given by a weighted sum of tax revenue and the sum of consumer and producer surplus. In this paper, we study the relationship between the partial privatization of the public firm and the government preferences for tax revenue. We consider a duopoly model with one semi-public firm and one private firm competing à la Cournot, that is choosing their outputs simultaneously. The private firm aims to maximize its own profit and we the objective function of the semi-public firm is a weighted sum between its own profit and the sum of consumer and producer surplus. The government imposes a specific tax on the production, and, furthermore, it chooses the level of privatization of the semi-public firm. The government payoff is the weighted sum between the sum of consumer and producer surplus and the tariff revenue. The timing of the game is as follows. In the first stage, the government sets the tax rate and the level of privatization of the semi-public firm. In the second stage, each firm simultaneously chooses its output to the market. We compute the outputs at equilibrium and we show that full privatization will decrease (i) the specific tax rate; (ii) the aggregate output in the market; and (iii) the government’s payoff. In addition, full privatization will increase the profits of both firms. Furthermore, we show that as the government preference for the tax revenue becomes large, (i) the optimal tax rate increases, (ii) the output of both firms decrease; and (iii) the government payoff decreases. This paper contributes to the framework of partial privatization in a market with a specific tax on the production.
- Pricing strategy for green hotel industryPublication . Ferreira, Flávio; Ferreira, Fernanda A.; Rodrigues, CristinaHolistic health and prevention are increasingly at the center of tourists’ decisions. Tourists expect to may continue their health and wellness lifestyles when they are away from home. Hospitality can find in the “health and wellness” sector a good response to the requalification needs for the post-COVID period. In fact, since 1900s, the hospitality niche of health and wellness has been increasing around the world, and it has been an important issue for the profit growth for the hospitality destinations. But what is wellness tourism? The Global Wellness Institute defines wellness tourism as travel associated with the pursuit of maintaining or enhancing one’s personal wellbeing. Several hotels have introduced green innovation as the innovation that emphasizes health, safety, and environmental friendliness and implementation of environmental management to ensure ecological wellbeing. One way for hotels to be environmentally friendly is to implement corporate social responsibility (CSR) initiatives. In this paper, we will study the effects of corporate social responsibility policies in the hotel industry. To do that, we will model a non-cooperative hotel competition using game theory concepts. We recall that game theory is a formal, mathematical discipline that studies situations of competition and cooperation between several involved parties and aims to help us understand situations in which decision-makers interact. The model consists in a competition between a CSR hotel and a state-owned (SO) hotel that set room rates. The choice of room rates can be made either simultaneously or sequentially. Our main result is that the CSR hotel profits more than the SO hotel, regardless of the order of movements.
- Bertrand oligopoly when rivals' costs are unknownPublication . Ferreira, Fernanda A.; Ferreira, FlávioWe study a Bertrand oligopoly model with incomplete information about rivals' costs, where the uncertainty is given by a uniform distribution. We compute the Bayesian-Nash equilibrium of this game, the ex-ante expected profit and the ex-post profit of each firm. We see that, even though only one firm produces in equilibrium, all firms have a positive ex-ante expected profit.