nep-com New Economics Papers
on Industrial Competition
Issue of 2005‒09‒17
five papers chosen by
Russell Pittman
US Department of Justice

  2. Integración Vertical Eficiente y Compartimiento de Facilidades en Presencia de Entrada: Un Marco Conceptual By Felipe Balmaceda; Eduardo Saavedra
  3. When do Countries Introduce Competition Policy? By Forslid, Rikard; Häckner , Jonas; Muren, Astri
  4. What’s Keeping the Apples Away? Addressing the Market Integration Issue By Deodhar Satish Y
  5. Corporate Design for Regulability. A Principal-Agent-Supervisor Model By Christoph Engel

  1. By: Felici Roberto (BOLOGNA); Pagnini Marcello (BOLOGNA)
    Abstract: We examine the determinants of entry into Italian local banking markets during the period 1991-2002 and build a simple model in which the probability of branching in a new market depends on the features of both the local market and the potential entrant. Our econometric findings show that, all else being equal, banks are more likely to expand into those markets that are closest to their pre-entry locations. We also find that large banks are more able to cope with distance-related entry costs than small banks. Finally, we show that banks have become increasingly able to open branches in distant markets, probably due to the advent of information and communication technologies.
    Keywords: entry, barriers to entry, local banking markets, geographical distance.
    JEL: G21 L13 L22 R30
    Date: 2005–06
  2. By: Felipe Balmaceda (Centro de Economía Aplicada. Universidad de Chile); Eduardo Saavedra (ILADES-Georgetown University, Universidad Alberto Hurtado)
    Abstract: En este artículo se estudian los equilibrios de mercado resultantes en una industria de facilidades esenciales, con un monopolio upstream y competencia oligopólica downstream, la que enfrenta posteriormente entrada en el segmento monopólico. Se encuentra que la competencia de duopolios verticalmente integrados es el resultado de equilibrio postentrada, con competencia de facilidades esenciales cuando los costos de construcción de una nueva facilidad son bajos y con compartimiento de la facilidad esencial upstream cuando sus costos de construcción son elevados. Asimismo, los efectos en bienestar social son siempre eÞcientes cuando se observa duplicación de facilidades; siendo en varios casos eÞcientes cuando se observa en equilibrio compartimiento de facilidades. Estos resultados proveen racionalidad para la mantener desregulada industrias como la petrolera, en donde los costos hundidos son más bien bajos relativos al tamaño del mercado.
    Keywords: Facilidad esencial, Inversiones compartidas, Competencia de redes
    JEL: D43 D61 L22 L13 L41 L42
    Date: 2005–08
  3. By: Forslid, Rikard (Dept. of Economics, Stockholm University); Häckner , Jonas (Dept. of Economics, Stockholm University); Muren, Astri (Dept. of Economics, Stockholm University)
    Abstract: This paper first presents stylised evidence showing how the date of the introduction of competition policy is correlated with country size. Smaller countries tend to adopt competition policy later. We thereafter present a simple theoretical model with countries of different size and firms competing à la Cournot. The predictions of the model are consistent with the empirical regularity presented. An implication of our model is that globalisation may give very different incentives regarding competition policy for small and large developing countries.
    Keywords: Competition policy; anti-trust; trade costs
    JEL: F12 F15 F21 R12
    Date: 2005–06–01
  4. By: Deodhar Satish Y
    Abstract: Apples have been grown in India for a century. At present apple production exceeds 1.4 million tonnes a year. Still, there are wide variations in the apple prices across the country. We test the price data for market integration using cointegration and error correction methodology. Delhi, the major wholesale market for apples, does not seem to influence other markets. Mumbai market does influence Bangalore market, although with about a two week lag. Absence of integration can be attributed to traders from southern region bypassing the Delhi wholesale market, cascading effect of trader margins at various distribution points, absence of competition to agricultural produce marketing committee markets, and, inadequacy of road and cool chain infrastructure.
    Date: 2005–08–12
  5. By: Christoph Engel (Max-Planck-Institute for Research on Collective Goods)
    Abstract: Corporate actors differ from individuals in one important respect: technically, it may be possible to observe the formation of the corporate will from outside, and to impact on its formation. This feature can be exploited by regulators. One technology is inducing corporate actors to hire an interface actor, representing the regulatory cause at the interior of the firm. Regulators are corporate actors as well. Statutes usually do not fully determine their behaviour. Therefore, firms may induce the regulator to give an interface actor access to the regulatory arena. This interface actor has the task of representing the commercial cause in regulatory decision-making. The paper uses a principal-agent-supervisor model to analyse each of these cases separately, and to demonstrate how the reciprocal nature of the relationship may be exploited.
    Keywords: principal-agent-supervisor, corporate actor, corporate governance, regulatory procedure, governance, interface actor
    JEL: C72 D23 D73 K22 K23 K32 L51
    Date: 2005–09

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