Roberto Cellini

A differential game approach to investment in product differentiation

Abstract We consider a dynamic oligopoly where firms invest to increase product differentiation and an externality effect operates in the R&D activity via the demand functions. In the fully noncooperative setting, we find that the degree of differentiation resulting from R&D effort is higher, the larger is the population of firms in the industry. If firms cooperate in the R&D activity by setting up an R&D cartel, aggregate investment is larger and product substitutability is lower than in the decentralised case.

Economic activity and crime in the long run: an empirical investigation on aggregate data from Italy, 1951-1994

The paper analyzes the economic determinants of crime rates in Italy over the period 1951 to 1994. We show that cointegrating relationships connect the long-run equilibrium levels of crime rates to economic factors in the presence of endogenously determined structural breaks. The long-run pattern of homicides and robberies can be better explained by consumption, whereas thefts are better explained by unemployment.

Competition and quality in regulated markets: a differential-game approach

We investigate the effect of competition on quality in health care markets with regulated prices taking a differential game approach, in which quality is a stock variable. Using a Hotelling framework, we derive the open-loop solution (health care providers set the optimal investment plan at the initial period) and the feedback closed-loop solution (providers move investments in response to the dynamics of the states). Under the closed-loop solution competition is more intense in the sense that providers observe quality in each period and base their investment on this information. If the marginal provision cost is constant, the open-loop and closed-loop solutions coincide, and the results are similar to the ones obtained by static models. If the marginal provision cost is increasing, investment and quality are lower in the closed-loop solution (when competition is more intense). In this case, static models tend to exaggerate the positive effect of competition on quality.

Regional resilience in Italy: a very long-run analysis

Cellini R. and Torrisi G. Regional resilience in Italy: a very long-run analysis, Regional Studies. Resilience is a concept referring to the manner in which systems react to, and recover from, shocks. According to several recent analyses ‘resilience’ can explain different regional economic performances. However, this study indicates that this explanation is quite unconvincing when applied to the Italian regions in the very long run (1890–2009). Only few shocks emerge to have specific impact effects differing across regions, while the recovery experience is ever spatially homogeneous. Hence, it is difficult to discern genuine differences in regional resilience. This evidence can be interpreted as a reason why the regional differences in Italy are huge and persistent.

Dynamic Oligopoly with Sticky Prices: Closed-Loop, Feedback, and Open-Loop Solutions

We investigate a dynamic oligopoly game with price adjustments. We show that the subgame perfect equilibria are characterized by larger output and lower price levels than the open-loop solution. The individual (and industry) output at the closed-loop equilibrium is larger than its counterpart at the feedback equilibrium. Therefore, firms prefer the open-loop equilibrium to the feedback equilibrium, and the latter to the closed-loop equilibrium. The opposite applies to consumers.

Is cultural heritage really important for tourists? A contingent rating study

In this article we present the results of a contingent rating study carried out on a sample of tourisits visiting Scicli, a Sicilian town known for its baroque heritage. In particular, we focus on different attributes of tourism products – namely, season, accommodation and cultural heritage – to study how much each of these attributes weights in tourists’ preferences. We also study how the socio-demographic characteristics of people affect their evaluation of the different attributes of tourism products. The heritage endowment appears to be far from being the most important factor; this result is consistent across different socio-demographic subgroups of interviewed persons.

A Differential Oligopoly Game with Differentiated Goods and Sticky Prices

We investigate a dynamic oligopoly game where goods are differentiated and prices are sticky. We study the open-loop Nash equilibrium, and show that the latter equilibrium entails a larger level of steady state production as compared to the former; both equilibria entail a larger level of production in steady state than in static game. We also study the effects of price stickiness and product differentiation upon the steady state equilibrium allocation. We find that per-firm equilibrium output is increasing in both product differentiation and price stickmess.

Growth empirics: evidence from a panel of annual data

The paper shows that the use of annual data pooled into a panel of several countries can be a good choice for analysing the properties of long-term economic growth. Of course, an appropriate regression specification must be considered, to account for the short-run components of such high frequency data. The results point out that conditional convergence is important, as well as physical capital accumulation, in growth process; the human capital accumulation, on the contrary, appears to be no longer significant when country fixed-effects are accounted for. More importantly, the estimates are consistent with very plausible values of the input shares.

Museum and monument attendance and tourism flow: a time series analysis approach.

This article takes a time-series analysis approach to evaluate the directions of causality between tourism flows, on the one side, and museum and monument attendance, on the other. We consider Italy as a case study, and analyse monthly data over the period January 1996 to December 2010. All the considered series are seasonally integrated, and co-integration links emerge. We focus on the error-correction mechanism among co-integrated time series to detect the directional link(s) of causality. Clear-cut results emerge: bi-directional causality exists in the long-run dynamics, but it is the long-run dynamics of visits to museums and monuments that mainly adjust to tourism variables (arrivals, overnights, average stays). In the short run, there are some causal effects going from the cultural sites’ attendance to tourism dynamics. The nonstationary nature of time series, their co-integration relationships and the direction of causal links suggest specific implications for tourism and cultural policies.

Private and Social Incentives Towards Investment in Product Differentiation

We consider a dynamic oligopoly where firms invest to increase product differentiation and an externality effect operates in the R&D activity. We compare the steady state solutions under alternative decision rules, namely, the open-loop and the closed-loop Nash equilibrium. Significant differences emerge, concerning the effect of the number of firms upon the optimal degree of product differentiation. We also compare the private optima with the social optimum, and derive implications concerning the social desirability of different decision rules.