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on Industrial Competition |
| By: | Maria Belen Usero; Zulima Fernandez |
| Abstract: | This study examines the relationship between erosion of the first-mover’s market share and the differences in competitive behaviour of pioneer firms and followers. Particularly, we pay particular attention to market actions related to innovation, pricing and promotion, and to non-market actions related to judicial issues. The empirical study has been carried out with companies that are present in a dynamic context, such as the European mobile telephone industry. Our results show that when followers take more non-market actions than pioneers the negative effect on the firstentrant’s advantage is more significant. On the contrary, we have not found a significant impact of innovating and pricing actions. |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wbrepe:wb054812&r=com |
| By: | Rajat Acharyya (Jadavpur University); Swapnendu Banerjee (National University of Singapore) |
| Abstract: | In a vertically differentiated monopolistic framework with discrete preferences we examine how protecting the low-quality segment raises the incentive for quality innovation. We show how the monopolist facing competitive imports, might fail to exert its complete monopoly power even if there is prohibitive tariff on both the high and low quality segment of the market. On the other hand, given non prohibitive tariff on the high quality segment, the potential gain for the monopolist exhausts at a level much below the prohibitive low-quality tariff level. Also a sufficiently low tariff on the high quality product can force the monopolist to produce the first best qualities irrespective of the tariff level on the low quality product |
| Keywords: | F13, L12, L15 |
| URL: | http://d.repec.org/n?u=RePEc:nus:nusewp:wp0504&r=com |
| By: | Jaap Bikker; Michiel van Leuvensteijn |
| Abstract: | The lack of available prices in the Dutch life insurance industry makes competition an elusive concept that defies direct observation. Therefore, this paper investigates competition by analysing several factors which may affect the competitive nature of a market and various indirect measurement approaches. After discussing various supply and demand factors whic h may constitute a so-called tight oligopoly, we establish the existence of scale economies and the importance of cost Xinefficiency, since severe competition would force firms to exploit available scale economies and to reduce X-inefficiencies. Both scale economies and X-inefficiencies turn out to be substantial, although more or less comparable to those found for insurers in other countries and to other financial institutions. Further, we apply the Boone indicator, a novel approach to measuring the effects of competition. This indicator points to limited competition in comparison to other sectors in the Netherlands. Further investigations of submarkets should reveal where policy measures in order to promote competition might be appropriate. |
| Keywords: | Life insurance; market structure; concentration; competition; scale economies; X-inefficiency; profit margins; Boone indicator; translog cost functions; stochastic cost frontier approach. |
| JEL: | D4 D61 G22 L1 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:047&r=com |