Alliance One Tobacco (Malawi)
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The Social Division of Labor and Competition: A Conceptual Study
No full textapplication/pdfIDP000969_001Economic growth entails the development of the social division of labor and the diversification of industries within an economy. Considerable previous research has examined the social division of labor, showing the cooperative relationships between firms or industries through product exchanges in markets. However, it remains unclear how market competition among firms within an industry influences the development of the social division of labor. Therefore, this study explores the relationship between the development of the social division of labor and competition to shed light on the process of new industrial differentiation. Furthermore, it highlights unresolved issues for future research.technical repor
Spatial pricing and the strategic choice of retail formats
No full textapplication/pdfIDP000968_001We develop a model in which offline and online transportation costs, online shopping disutility cost and consumer taste heterogeneity, and online and offline retailers' pricing policies interact to determine the equilibrium retail format that emerges from firms' and consumers' choices. This is done by combining spatial pricing and discrete choice theory within a unified game-theoretic framework. We study the industry equilibrium, as well as the corresponding consumer surplus and total welfare. Our results show that firms' choices of a retail format and consumers' decision to buy from an offline or online firm often depend on consumers' locations relative to firms'. Comparing aggregate consumer surpluses shows that consumers prefer online to alternative channels when they are sufficiently heterogeneous, but this need not be so when heterogeneity is weak. When consumers' tastes are heterogenous enough, the retail format maximizing total welfare depends on the value of the distaste costs of online purchase. Thus, the nature of products supplied by retailers is likely to affect the socially desirable retailing system through the degree of product differentiation.technical repor
