Endogenous Market Incompleteness in Discontinuous Games

在大多数现代寡头垄断市场中，企业不仅选择数量或价格，而且战略性地设计其整个产品和金融合同。产品是不同功能的捆绑;金融合约是状态或有支付的捆绑。这是市场不完全性的一种形式：如果市场是完全的，消费者可以任意地将联合收割机的功能和支付结合起来。例如，有可能有一个定制的手机，包括互联网接入和GPS导航，但没有相机或音乐播放器。然而，如果所有公司都只捆绑销售这些功能，那么他们就在战略上保持了市场的不完整性。如果引入新的产品或合同，需求就会出现不连续性。要理解内生市场的不完全性，就必须对非连续博弈进行分析，非连续博弈理论是近年来市场研究中的一个非常活跃的领域。然而，大多数以前的研究集中在存在的结果。相比之下，这个项目的目的是定性的结果，这类重要的游戏。目的是了解潜在市场不完全性对竞争和福利的影响。当市场是完全的，福利最大化时，公司的数量是大的，在完全竞争。当市场内生不完全时，情况就不一样了，因为太多的竞争会破坏提供新产品或证券的动机。在这个项目中，最优的竞争程度是由市场需求的曲率决定的。它解决了哪些创新与消费者相关，哪些创新与消费者无关的问题。这为不完全市场的最优监管提供了一个新的视角。

In most modern oligopoly markets, firms choose not only quantities or prices, but design their entire products and financial contracts strategically. Products are bundles of different features; financial contracts are bundles of state-contingent payments. This is a form of market incompleteness: If markets were complete, consumers could combine features and payments arbitrarily. For example, it would be possible to have a customized cell phone that includes internet access and GPS navigation but no camera or music player. However, if all firms sell these features only as a bundle, they strategically keep the market incomplete. If novel products or contracts were introduced, demand would exhibit a discontinuity. To understand endogenous market incompleteness, it is therefore necessary to analyze a discontinuous game.The theory of discontinuous games has been a very active area of research in recent years. However, most previous research concentrates on existence results. By contrast, the purpose of this project is on qualitative results for this important class of games. The objective is to understand the effect of potential market incompleteness on competition and welfare. When markets are complete, welfare is maximized when the number of firms is large, as under perfect competition. This is no longer true when markets are endogenously incomplete because too much competition destroys the incentive for offering new products or securities. In this project, the optimal degree of competition is determined from the curvature of market demand. It addresses the question of which innovation is relevant for consumers, and which is irrelevant. This provides a new angle on the optimal regulation of incomplete markets.