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This paper analyses the time consistency of open-loop equilibria, in the cases of Nash and Stackelberg behaviour. We define a class of games where the strong time-consistency of the open-loop Nash equilibrium associates with the time consistency of the open-loop Stackelberg equilibrium. We label these games as `perfect uncontrollable' and provide two examples based on (i) a model where firms invest so as to increase consumers' reservation prices, based upon Cellini and Lambertini (CEJOR, 2003); and (ii) a model where firms compete to increase their respective market shares, based upon Leit- mann and Schmitendorf (IEEE Transactions on Automatic Control, 1978).

This paper analyses the time consistency of open-loop equilibria, in the cases of Nash and Stackelberg behaviour. We define a class of games where the strong time-consistency of the open-loop Nash equilibrium associates with the time consistency of the open-loop Stackelberg equilibrium. We label these games as 'perfect uncontrollable'. We provide one example based on a model of oligopolistic competition in advertising efforts. We also present two oligopoly games where one property holds while the other does not, so that either (i) the open-loop Nash equilibrium is subgame perfect while the stackelberg one is time inconsistent, or (ii) the open-loop Nash and Stackelberg equilibria are only weakly time consistent.

In this paper, we look at the Italian National Health System as a case study, in order to investigate whether competition exerts positive effect on the efficiency of the system. Using the DEA technique we measure the efficiency of accredited hospital production at the regional level; secondly, we take a cross-section regression analysis approach to analyse the determinants of efficiency. A general conclusion stemming out of the analysis is that competition is not a value per se and that its effects on the performance of the system are affected by the rules governing it.

The paper analyses the relationship between the average quantity of a good demanded by a consumer in a single act of purchase and the price setting behaviour of firms, in the presence of consumers' uncertainty about prices. A decrease of the average quantity purchased leads consumers to reduce the collection of information and increases the room for larger mark-up set by firms, with a consequent higher average price and higher variance of prices. An empirical analysis on the data about hotel stays in seaside resorts in Italy during the summer seasons in the period 1988-1997 is consistent with this point.

The paper shows that the co-movements of optimal price and output in a monopolistic market can be a case of spurious correlation, price and quantity variations being affect by the degree of uncertainty in the consumers' incomes. The pattern of price and quantity changes depends on the shape of the distribution function of the stochastic variable "income of the consumers", as well as the size of the firm's costs.

We model an industry in which a discrete number of firms choose the output of their differentiated products deciding whether or not to consider the impact of their decisions on aggregate output. We show that two threshold numbers of firms exist such that: below the lower one there is a unique equilibrium in which all firms consider their aggregate impact as in standard oligopoly; above the higher threshold there is a unique equilibrium in which all firms disregard that impact as in standard monopolistic competition; between the two thresholds there are two equilibria, one in which all firms consider their aggregate impact and the other in which they do not. We then show that our model of strategic inattention is isomorphic to a model of strategic delegation with managerial compensation based on relative profit performance.

We study the firms' choice of whether or not to consider pieces of information concerning their interdependence. In particular, any firm can strategically choose to consider or not the fact that industry output is affected by its own production choice. If this piece of information is considered, the firm behaves as an aligopolist; if not, firm behaves in a monopolistically competitive way. Thus, the market regime is endogenously determined. We show that different outcomes can emerge, depending on the number of firms, the degree of product substitutability and the cost structure.

We investigate the effect of competition on quality in regulated markets (e.g., health care, higher education, public utilities), using a Hotelling framework, in the presence of sluggish demand. We take a differential-game approach, and derive the open-loop solution (providers choose the optimal quality investment plan based on demand at the initial period) and the feedback closed-loop solution (providers observe demand in each period and choose quality in response to current demand). If production costs are strictly convex, the steady state quality is higher under the open-loop solution than under the feedback solution. In both solutions, quality and demand move in opposite directions over time on the equilibrium path to the steady state. While fiercer competition (lower transportation costs or less sluggish demand) leads to higher quality in both solutions, the quality response to increased competition is weaker when players use feedback strategies.