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This research investigates the impact of both horizontal and vertical competition, on the one hand, and strategy types (commitment-based versus contingent-based equilibrium strategies), on the other hand, on the pollution accumulated by two supply chains over time. We consider a two-stage game model where two manufacturers and two retailers are involved in a wholesale price contract, in order to supply the demand over a finite time horizon. In the first stage of the game, the manufacturers set their respective optimal transfer prices. During the second stage, polluting emissions are created over time in proportion with demand, which is controlled by the retailers’ respective consumer prices. In this stage, the manufacturers are involved in emissions abatement. In this setup, we seek to identify the combination of market structure and strategy type that leads the two supply chains to generate the lowest pollution intensity and the highest level of abatement intensity.

In this paper, an extension of the Bass model is suggested that accounts for the influence of conformance quality on mixed (i.e., positive and negative) word-of-mouth in the diffusion of a new product. A primary goal is to determine how an active operational policy seeking to continuously improve conformance quality affects the optimal leveraging of marketing instruments used to diffuse new products, and the resulting sales and profits. To do so, an optimal tradeoff by a monopolistic firm between advertising effort and price, on the one hand, and conformance quality, on the other hand, is analyzed, along with the implications for word of mouth effectiveness. Our results can be summarized as follows. Price and advertising levels are respectively lower and higher under an operations–marketing policy than under a marketing policy only. As a result, the market potential and the innovation effect are higher under an operations–marketing policy than under a marketing policy only, as is the imitation effect due to conformance quality improvements over time. Also, greater cumulative sales and cumulative profits are obtained. However, higher design quality results in a lower price and greater advertising effort under an operations–marketing policy than under a marketing policy only. Finally, for lower design quality, the two policies result in different patterns (non-monotonic vs. monotonic) for price and advertising yet cumulative sales and profits are of quite similar magnitude.

It has been shown that learning-by-doing enables firms to reduce marginal production costs, but that this effect weakens due to organizational forgetting. In order to assess the impact of both learning and forgetting on long-term competitiveness and a firm’s profitability, we model an experience accumulation process with depreciation and consider two competing firms that produce fully substitutable products. In this model, unit production costs decrease with the firm’s experience due to the proprietary learning process as well as the spillover of experience from the competing firm. Firms can either share or hide from each other their information about the state of their respective experience throughout the game. We found that in an equilibrium steady state, if the organizational forgetting is sufficiently large (larger than the spillover rate value), then information sharing, compared to information hiding, results both in less competitiveness and increased profits for firms. Conversely, if the organizational forgetting is small and the spillover opportunities are relatively large, then information sharing promotes both long term competitiveness and firm profits. Accordingly, firms are better off in the long term by deliberately limiting (expanding) their experience accumulation process whenever organizational forgetting is relatively large (small). A high ability of proprietary learning, however, can interfere in this relationship so that limiting the firms’ experience process will always be compatible with higher profitability.

Autonomous 'word of mouth', as a channel of social influence that is out of firms' direct control, has acquired particular importance with the development of the Internet. Depending on whether a given product or service is a good or a bad deal, this can significantly contribute to commercial success or failure. Yet the existing dynamic models of sales in marketing still assume that the influence of word of mouth on sales is at best advertising-dependent. This omission can produce ineffective management and therefore misleading marketing policies. This paper seeks to bridge the gap by introducing a contagion sales model of a monopolist firm's product where sales are affected by advertising-dependent as well as autonomous word of mouth. We assume that the firm's attraction rate of new customers is determined by the degree at which the current sales price is advantageous or not compared with the current customers' reservation price. A primary goal of the paper is to determine the optimal sales price and advertising effort. We show that, despite costly price adjustments, the interactions between sales price, advertising-dependent and autonomous word of mouth can result in complex dynamic pricing policies involving history-dependence or limit cycling consisting of alternating attraction of new customers and attrition of current customers. (C) 2015 Elsevier B.V. All rights reserved.

"Learning by doing", in which unit production costs decrease with cumulative production experience, is extensively observed in economies of scale. It has been shown that, in the case of mature technologies, learning curves exhibit a linear behavior in cumulative production. In this paper we consider two competing firms that produce fully substitutable products and whose experience levels have a linear effect on their unit production costs. We assume that production experience is affected by random causes, and that the learning process may involve spillovers of experience from the competing firm. As in the Cournot competition, in this differential game the firms compete by choosing the quantities of products that they will produce. In contrast to the Cournot assumption, according to which firms maximize their profits by taking as given the quantity produced by the competitor, we assume that a firm may not be able to determine its competitor's reaction to a change in its output and instead may conjecture the competitor's response. We find that, in contrast to the case of a steady state, an open-loop equilibrium over a finite planning horizon may result in greater output (more competitive behavior) compared with a subgame-perfect equilibrium. We show that this result is due to the fact that strategic behavior in feedback Nash equilibrium depends on the relationship between the level of proprietary learning by doing (which encourages strategic complementarity) and the level of spillovers (which involves strategic substitutability).

This paper seeks to determine how the double marginalization phenomenon affects the tradeoff between polluting emissions and abatement activities related to pollution accumulation in a supply chain composed of one manufacturer and one retailer. The environmental consequence of this inefficiency, which emerges in a non-cooperative vertical setting governed by a single-parameter contract, is overlooked in the literature on pollution control. In the setup of a two-stage game, we investigate the impact of double marginalization for non-cooperative equilibrium. To check whether there are differences between dynamic and strategic effects of double marginalization on pollution accumulation, both the open-loop and feedback Nash equilibria are derived over a finite time horizon, with the cooperative solution as a benchmark.

We consider a stock pollution problem where the biosphere can transform from a sink to a source of pollution in the presence of self-regenerating environmental absorption efficiency. We examine the problem of controlling pollution and the capacity of the biosphere to absorb pollution: the regulator can mitigate emissions and can invest to build-up the absorption capacity of pollution sinks. We examine conditions under which both measures, mitigation and absorption capacity investments, are substitute (complement) to each other, and the relative extent to which environmental self-regenerating capabilities affect these conditions. We also exhibit the possibility of an oscillatory approach to the steady state. Particular attention is paid to the situation where the social planner is impatient.

Some areas of science face the problem that many academics prefer the private sector over academia. This negatively affects the quality and the quantity of the research output as well as the availability of competent lecturers in these areas. The present paper investigates by means of an optimal control model how the reward of competencies in research and teaching in the private sector affects investments into these skills as well as the decision on whether and when to optimally leave academia. As the decision between academia and industry is obvious if a scientist has strong preference for either, we focus on scenarios where this is not the case. We notably show that the dynamic trade-off between academia and industry results in various forms of brain drain. In this regard, we first confirm that if academic competencies are well rewarded in the private sector, the most competent academics will leave academia. Further, we find scenarios where a scholar with intermediate competencies will try to improve his or her skills as much as possible before leaving academia and scenarios in which it is optimal to not put much effort into work and let competencies slowly depreciate before leaving. Even if scientists are highly skilled and motivated to stay, if poor working conditions do not support knowledge acquisition, competencies will inevitably fall and academia will consist solely of mediocre scholars. The results suggest that brain drain can be destructive for academia in the long run.

We investigate how the relationship between economic growth and pollution is affected by the source of pollution: production or consumption. We are interested in polluting waste that cannot be naturally absorbed, but for which recycling efforts aim to avoid massive pollution accumulation with harmful consequences in the long run. We distinguish the cases where recycling efforts are capital-improving or capital-neutral. Based on both environmental and social welfare perspectives, we determine how the interaction between growth and polluting waste accumulation is affected by the source of pollution, i.e., either consumption or production, and by the fact that recycling may or may not act as an income generator, i.e., either capital-improving or capital-neutral recycling efforts. Several new results are extracted regarding optimal recycling policy and the Environmental Kuznets Curve. Beside the latter concern, we show both analytically and numerically that the optimal control of waste through recycling allows to reaching larger (resp., lower) consumption and capital stock levels under consumption-based waste compared to production-based waste while the latter permits to reach lower stocks of waste through lower recycling efforts.

This paper analyzes the consequences of allowing for punishment in a real-effort pair production experiment. The behavior of the best performer in the team differs on whether he or she can impose a sanction on the less performing partner. When sanctions are not allowed, good performers reduce their effort in response to the advantageous difference in scores; when they can impose sanctions, their change in effort is no longer related to the difference in scores. To some extent, a sanction mechanism allows good performers to focus on their own performance. In the case of costless sanctions, not sanctioning a partner who under-performs, what we refer to as forgiveness, prompts the latter to improve his or her performance, but applying the sanction has a stronger push effect. Copyright © 2014 John Wiley & Sons, Ltd.

In the literature on marketing models, the assumption of mixed word-of-mouth has been limited to the Bass diffusion model. Yet explicit leveraging of the originating factors of such assumption is lacking. Apart from that example, mixed word-of-mouth has been disregarded in contagion sales models. This paper bridges the gap by suggesting a sales model, where both positive and negative word-of-mouth affect the attraction rate of new customers, along with advertising. The difference between positive and negative word-of-mouth is based on the distinction between satisfied and dissatisfied current customers, which is supposed to depend on conformance quality. A primary issue in this paper is to determine how a firm should determine the optimal intertemporal trade-off between investing in advertising-dependent word-of-mouth and quality-dependent word-of-mouth. To address this issue, a contagion sales model is suggested where mixed autonomous word-of-mouth alone can lead to either commercial success or failure of a given brand.

The objective of the paper is to study how wholesale price and revenue sharing contracts affect operations and marketing decisions in a supply chain under different dynamic informational structures. We suggest a differential game model of a supply chain consisting of a manufacturer and a single retailer that agree on the contract parameters at the outset of the game. The model includes key operational and marketing activities related to a single product in the supply chain. The manufacturer sets a production rate and the rate of advertising efforts while the retailer chooses a purchase rate and the consumer price. The state of the game is summarized in the firms’ backlogs and the manufacturer’s advertising goodwill. Depending on whether the supply chain members have and share state information, they may either make decisions contingent on the current state of the game (feedback Nash strategy), or precommit to a plan of action during the whole game (open-loop Nash strategy). Given a contract type, the impact of the availability of information regarding the state of the game on the firms’ decisions and payoffs is investigated. It is shown that double marginalization can be better mitigated if the supply chain members adopt a contingent strategy under a wholesale price contract and a commitment strategy under a revenue sharing contract.

OS; International audience; We study an optimal AK-like model of capital accumulation and growth in the presence of a negative environmental externality in the tradition of Stokey (Int Econ Rev 39(1):1–31, 1998). Both production and consumption activities generate polluting waste. The economy exerts a recycling effort to reduce the stock of waste. Recycling also generates income, which is fully devoted to capital accumulation. The whole problem amounts to choosing the optimal control paths for consumption and recycling to maximize a social welfare function that notably includes the waste stock and disutility from the recycling effort. We provide a mathematical analysis of both the asymptotic behavior of the optimal trajectories and the shape of transition dynamics. Numerical exercises are performed to illustrate the analysis and to highlight some of the economic implications of the model. The results suggest that when recycling acts as an income generator, (1) a contraction of both the consumption and capital stock is observed in the long run after an expansion phase; (2) whether polluting waste is predominantly due to production or consumption, greater consumption and lower capital stock are obtained in the long run compared with the situation when recycling does not create additional income; (3) greater recycling effort and lower stock of waste are resulted in the long run.

International audience; Dans cet article, nous exposons les fondements analytiques des principaux modèles de représentation de la diffusion des innovations. Dans un second temps, nous proposons une confrontation économétrique de ces modèles à partir de données relatives à l'évolution des ventes de différents terminaux téléphoniques. Dans un dernier temps, nous passons en revue les conclusions fondamentales associées au problème du contrôle optimal de la diffusion des innovations.

This paper reports the results from a real-effort team production experiment, where best performers can impose either tacit or explicit sanctions on their less-performing partners. The behavior of the best performer in the team differs from one condition to another. When explicit sanctions are not allowed, good performers reduce their effort in response to the advantageous difference in scores; when they can impose sanctions, their change in effort is no longer related to the difference in scores. To some extent, a mechanism of explicit sanctions allows good performers to focus on their own performance. Not sanctioning an opponent who under-performs, what we refer to as forgiveness, prompts the latter to improve his performance, but applying the sanction has a stronger effect., L'article propose une étude expérimentale appliquée au problème du travail d'équipe. La tache consiste à compter le nombre d'occurrences du chiffre 7 dans des blocs de chiffre. Les équipes sont composées de deux joueurs. A chaque tour, le joueur qui fait le meilleur score peut appliquer une sanction à l'autre. Nous étudions les stratégies et les comportements des deux joueurs, dans une interaction qui dure quatre tours.

This paper analyzes how faculty members dynamically allocate their efforts between improving their research and teaching skills, taking into account the organizational structures and incentives implemented by academic institutions. The model builds on the assumption that organizational structures have an impact on the nature of spillover effects between teaching and research competencies. We analyze the dynamic equilibrium under unilateral and bilateral spillovers, using the no-spillover case as a benchmark. The bilateral spillover case is the most appealing as it achieves the highest overall performance; however, the nature of the equilibrium and the career paths can be quite different depending on the parameters of the problem such as the obsolescence of competencies or the strength of the spillover effect. This finding provides interesting insights on what could be the most productive configuration of a higher education institution.

International audience; Dans cet article, nous proposons une solution au problème du contrôle optimal de la diffusion des produits par la qualité en contexte de concurrence monopolistique. Pour spécifier la dynamique des ventes instantanées, nous supposons que le prix est un signal fiable de qualité et que la demande exprime une préférence pour la qualité par rapport au prix. La résolution du programme dynamique par le principe du maximum de Pontryagin débouche sur des cas de figure différenciés. D'autre part, une validation empirique des hypothèses du modèle sur les ventes de terminaux téléphoniques nous permet d'améliorer très sensiblement le coefficient de détermination obtenu par le modèle de Bass. Enfin, une application numérique du problème du contrôle optimal de la diffusion par la qualité permet de mesurer le coût d'opportunité de la stratégie optimale de qualité par rapport à la stratégie observée.