nep-com New Economics Papers
on Industrial Competition
Issue of 2017‒10‒22
27 papers chosen by
Russell Pittman
United States Department of Justice

  1. How to compete? Cournot vs. Bertrand in a vertical structure with an integrated input supplier By Luciano Fanti; Marcella Scrimitore
  2. Product innovation and two-part tariff vertical contracts By Luciano Fanti; Luca Gori
  3. Screening and Adverse Selection in Frictional Markets By Lester, Benjamin; Shourideh, Ali; Venkateswaran, Venky; Zetlin-Jones, Ariel
  4. Heterogeneous Merger Impacts on Competitive Outcomes By Ralph Siebert
  5. Let's lock them in: Collusion under Consumer Switching Costs By Fourberg, Niklas
  6. Partial Cartels and Mergers with Heterogenous Firms: Experimental Evidence By Gomez-Martinez, Francisco
  7. Salience in Retailing: Vertical Restraints on Internet Sales By Magdalena Helfrich; Fabian Herweg
  8. Blockbuster or Niche? Competitive Strategy under Network Effects By Yinbo Feng; Ming Hu
  9. Disruptive firms By Mario Coccia
  10. Collusion in Two-Sided Markets By Yassine Lefouili; Joana Pinho
  11. Peer-to-Peer Markets with Bilateral Ratings By T. Tony Ke; Baojun Jiang; Monic Sun
  12. The social value of information and the competition motive: Price vs. quantity games By Camille Cornand; Rodolphe Dos Santos Ferreira
  13. A product innovation game with managerial delegation By Luciano Fanti; Luca Gori
  14. Online Auctions and Digital Marketing Agencies By Francesco Decarolis; Gabriele Rovigatti
  15. Product Variety, Across-Market Demand Heterogeneity, and the Value of Online Retail By Thomas W. Quan; Kevin R. Williams
  16. Advertising Competition in the Free-to-Air TV Broadcasting Industry By Marc Ivaldi; Jiekai Zhang
  17. Rights on Data: Competition, Innovation, and Competition Law: Dissecting the Interplay By Wolfgang Kerber
  18. Social Media and the News Industry By Alexandre de Corniere; Miklos Sarvary
  19. Competitive Pressure from Neighboring Markets and Optimal Privatization Policy By Haraguchi, Junichi; Matsumura, Toshihiro; Yoshida, Shohei
  20. La liberalizzazione del mercato elettrico - Una proposta per superare la maggior tutela By Stagnaro, Carlo; Amenta, Carlo; Di Croce, Giulia; Lavecchia, Luciano
  21. The effect of switching costs on prices: an application to the Peruvian mobile phone market By Tilsa Ore Monago;
  22. Scoping for: Competition in Network Industries: Evidence from Mobile Telecommunications in Rwanda By Daniel Björkegren
  23. Entry Barriers and Technological Innovation in Broadband By Tedi Skiti
  24. Product Market Competition and Employer Provided Training in Germany By Heywood, John S.; Jirjahn, Uwe; Pfister, Annika
  25. The distribution of article quality and inefficiencies in the market for scientific journals By Philipp Kohlgruber; Christoph Kuzmics
  26. Essays on Preference Formation and Home Production By Xu, Yan
  27. Why Firms Should Care for All Consumers By Planer-Friedrich, Lisa; Sahm, Marco

  1. By: Luciano Fanti; Marcella Scrimitore
    Abstract: We study whether a quantity or a price contract is chosen at equilibrium by one integrated firm and its retail competitor in a differentiated duopoly. Using a similar vertical structure, Arya et al. (2008) showed that Bertrand competition is more profitable than Cournot competition, which contrasts with conventional wisdom. In this paper, we first demonstrate that such a result is robust to the endogenous determination of the type of contract. Second, by introducing managerial incentives in the model, we find that delegation to managers entails conflicting choices of the strategic variable by the two firms as long as products are sufficiently differentiated, causing non-existence of equilibrium in pure strategies. Significantly high product substitutability reconciles firms’ objectives under delegation, leading unique or multiple equilibria with symmetric types of contracts to arise.
    Keywords: Upstream monopolist, outsourcing, price competition, quantity competition, managerial delegation.
    JEL: D43 L13 L21
    Date: 2017–01–01
  2. By: Luciano Fanti; Luca Gori
    Abstract: This article studies the effects of R&D investments in product innovation in a game-theoretic two-tier model where an upstream monopolist and downstream duopolists negotiate over the terms of a non-linear two-part tariff vertical contract.
    Keywords: Duopoly; Product innovation; Two-part tariffs
    JEL: D43 L13 L14
    Date: 2017–01–01
  3. By: Lester, Benjamin (Federal Reserve Bank of Philadelphia); Shourideh, Ali (Carnegie Mellon University); Venkateswaran, Venky (NYU – Stern School of Business); Zetlin-Jones, Ariel (Carnegie Mellon University)
    Abstract: We incorporate a search-theoretic model of imperfect competition into a standard model of asymmetric information with unrestricted contracts. We characterize the unique equilibrium, and use our characterization to explore the interaction between adverse selection, screening, and imperfect competition. We show that the relationship between an agent’s type, the quantity he trades, and the price he pays is jointly determined by the severity of adverse selection and the concentration of market power. Therefore, quantifying the effects of adverse selection requires controlling for market structure. We also show that increasing competition and reducing informational asymmetries can decrease welfare.
    Keywords: Adverse Selection; Imperfect Competition; Screening; Transparency; Search Theory
    JEL: D41 D42 D43 D82 D83 D86 L13
    Date: 2017–10–10
  4. By: Ralph Siebert
    Abstract: Mergers realize heterogeneous competitive effects on profits, production, and prices. To date, it is unclear whether differential merger outcomes are caused mostly by firms’ technology or product market attributes. Furthermore, empirical merger studies conventionally assume that, conditional on regressors, the impact of mergers on outcomes is the same for every firm. We allow the merger responses to vary across firms, even after controlling for regressors, and apply a random-coefficient or heterogeneous treatment effect model (in the context of Angrist and Krueger (1999), Heckman, Urzua, and Vytlacil (2006), and Cerulli (2012)). Based on a comprehensive dataset on the static random access memory industry, we find that firms’ postmerger output further increases (and postmerger price further declines) if merging firms are more efficient, operate in more elastic product markets, are more innovative, and acquire knowledge in technological areas that are relatively unexplored to themselves. A further interesting insight is that product market characteristics cause stronger postmerger outcome heterogeneities than do technology market characteristics. We also find that the postmerger effects accounting for heterogeneities differ greatly from those that consider homogeneous postmerger outcome effects. Our estimation results provide evidence that ignoring heterogeneous outcome effects can result in heterogeneity bias, just as ignoring premerger heterogeneities can lead to selectivity bias.
    Keywords: heterogeneous treatment effects, horizontal mergers, market power effects, merger evaluation, premerger heterogeneity, postmerger heterogeneity
    JEL: L11 L13 L52 O31 O32 O38
    Date: 2017
  5. By: Fourberg, Niklas
    Abstract: I study consumer switching costs’ effect on firms’ price setting behavior in a 2x2 factorial design experiment with and without communication. For Bertrand duopolies the price level under consumer switching costs is lower vis-à-vis new consumers but not affected towards old consumers. Markets are overall less tacitly collusive which translates into higher incentives to collude explicitly. The results have antitrust implications especially for the focus of cartel screening.
    JEL: C7 C9 L13 L41
    Date: 2017
  6. By: Gomez-Martinez, Francisco
    Abstract: A usual assumption in the theory of collusion is that cartels are all-inclusive. In contrast, most real-world collusive agreements do not include all firms that are active in the relevant industry. This paper studies both theoretically and experimentally the formation and behavior of partial cartels. The theoretical model is a variation of Bos and Harrington’s (2010) model where firms are heterogeneous in terms of production capacities and individual cartel decisions are endogenized. The experimental study has two main objectives. The first goal is examine whether partial cartels emerge in the lab at all, and if so, which firms are part of it. The second aim of the experiment is to study the coordinated effects of a merger when partial cartels are likely to operate. The experimental results can be summarized as follows. We find that cartels are typically not all-inclusive and that various types of partial cartels emerge. We observe that market prices decrease by 20% on average after a merger. Our findings suggest that merger analysis that is based on the assumption that only full cartels forms produces misleading results. Our analysis also illustrates how merger simulations in the lab can be seen as a useful tool for competition authorities to back up merger decisions.
    Keywords: Experiments,Bertrand oligopoly,Cartels,Mergers
    Date: 2017
  7. By: Magdalena Helfrich; Fabian Herweg
    Abstract: We provide an explanation for a frequently observed vertical restraint in ecommerce, namely that brand manufacturers partially or completely prohibit that retailers distribute their high-quality products over the internet. Our analysis is based on the assumption that a consumer’s purchasing decision is distorted by salient thinking, i.e. by the fact that he overvalues a product attribute - quality or price - that stands out in a particular choice situation. In a highly competitive low-price environment like on an online platform, consumers focus more on price rather than quality. Especially if the market power of local (physical) retailers is low, price tends to be salient also in the local store, which is unfavorable for the high-quality product and limits the wholesale price a brand manufacturer can charge. If, however, the branded product is not available online, a retailer can charge a significant markup on the high-quality good. As the markup is higher if quality rather than price is salient in the store, this aligns the retailer’s incentives with the brand manufacturer’s interest to make quality the salient attribute and allows the manufacturer to charge a higher wholesale price. We also show that, the weaker are consumers’ preferences for purchasing in the physical store and the stronger their salience bias, the more likely it is that a brand manufacturer wants to restrict online sales. Moreover, we find that a ban on distribution systems that prohibit internet sales increases consumer welfare and total welfare, because it leads to lower prices for final consumers and prevents inefficient online sales.
    Keywords: internet competition, relative thinking, retailing, salience, selective distribution
    JEL: D43 K21 L42
    Date: 2017
  8. By: Yinbo Feng (School of Management, Fudan University, Shanghai, China, 200433); Ming Hu (Rotman School of Management, University of Toronto, Toronto, Ontario, Canada M5S 3E6)
    Abstract: We provide a theory unifying the long tail and blockbuster phenomenon. Specifically, we analyze a three-stage game where the firms first make entry decisions, then decide on the investment in its product and lastly customers sequentially arrive to make purchase decisions based on product quality and historic sales under the network effect. We analytically show that a growing network effect always contributes to the demand concentration on a small number of products. However, product variety and quality investments, as an outcome of firms¡¯ ex-ante competitive decisions, may increase or decrease, as the network effect grows. When the network effect parameter is smaller than a threshold, the increasing network effect would shift more demand towards the products with higher qualities, preempting more products from entering the market ex ante and inducing firms to adopt the blockbuster equilibrium strategy by making larger quality investment. When the network effect is stronger than the threshold, the increasing network effect would make the market easily concentrated to a few products. Even some low quality ones may have chances to become a ¡°hit.¡± Interestingly, in this case, the ex-ante equilibrium product variety would be broader and firms adopt the niche equilibrium strategy by maker smaller quality investment. We empirically test the theory with the movie box office data and find strong supporting evidence.
    Keywords: long tail; blockbuster; niche; product variety; network effect
    JEL: C72 D43 L11 L25 M21
    Date: 2017–10
  9. By: Mario Coccia
    Abstract: This study proposes the concept of disruptive firms: they are firms with market leadership that deliberate introduce new and improved generations of durable goods that destroy, directly or indirectly, similar products present in markets in order to support their competitive advantage and/or market leadership. These disruptive firms support technological and industrial change and induce consumers to buy new products to adapt to new socioeconomic environment. In particular, disruptive firms generate and spread path-breaking innovations in order to achieve and sustain the goal of a (temporary) profit monopoly. This organizational behaviour and strategy of disruptive firms support technological change. This study can be useful for bringing a new perspective to explain and generalize one of the determinants that generates technological and industrial change. Overall, then this study suggests that one of the general sources of technological change is due to disruptive firms (subjects), rather than disruptive technologies (objects), that generate market shifts in a Schumpeterian world of innovation-based competition.
    Date: 2017–10
  10. By: Yassine Lefouili (Toulouse School of Economics, university of Toulouse Capitole, Toulouse, France.); Joana Pinho (Catolica Porto Business School and CEF.UP, Universidade do Porto, Porto, Portugal.)
    Abstract: This paper explores the incentives for, and the effects of, collusion in prices between two-sided platforms. We characterize the most profitable sustainable agreement when platforms collude on both sides of the market and when they collude on a single side of the market. Under two-sided collusion, prices on both sides are higher than competitive prices, implying that agents on both sides become worse off as compared to the competitive outcome. An increase in cross-group externalities makes two-sided collusion at a given profit level harder to sustain, and reduces the harm from collusion suffered by the agents on a given side as long as the collusive price on that side is lower than the monopoly price. When platforms collude on a single side of the market, the price on the collusive side is lower (higher) than the competitive price if the magnitude of the cross-group externalities exerted on that side is sufficiently large (small). As a result, one-sided collusion may benefit the agents on the collusive side and harm the agents on the competitive side.
    Keywords: collusion; two-sided markets; cross-group externalities.
    JEL: L41 D43
    Date: 2017–09
  11. By: T. Tony Ke (MIT Sloan School of Management); Baojun Jiang (Washington University in St. Louis); Monic Sun (Boston University)
    Abstract: We consider a platform that matches service providers with potential customers. Ratings of a service provider reveal the quality of his service while ratings of a consumer reveal the cost to serve her. Under a competitive search framework, we study how bilateral ratings influence market competition and segmentation. Two types of equilibria exist under bilateral ratings. In the first type, low-cost consumers only apply to high-quality service providers, who post a higher price, have longer queues and are less likely to accept an application than low-quality providers. High-cost consumers apply to all service providers and have a lower acceptance rate. In the second type of equilibria, both high- and low-quality service providers serve all consumers. Across all equilibria, equilibrium prices may decrease as the fraction of high-quality providers increases, as consumers become more costly to serve, and as the platform's commission rate increases. Compared with a platform with unilateral ratings where only service providers are rated, a platform with bilateral ratings may soften service providers' competition, leading to higher equilibrium prices. Lastly, we find that in the case of incomplete market coverage, high-quality service providers may charge lower prices than low-quality providers in equilibrium, because by charging a lower price, a high-quality service provider attracts more consumer applications, which enables him to cherrypick a low-cost consumer, while a low-quality service provider faces with consumers with higher serving costs and thus charge a higher price to make up the serving cost.
    Keywords: Platform; Peer-to-Peer; Competitive Search; Matching; Reviews; Information Disclosure; Segmentation
    JEL: D82 D83 M31
    Date: 2017–09
  12. By: Camille Cornand (Univ Lyon, CNRS, GATE L-SE UMR 5824, F-69130 Ecully, France); Rodolphe Dos Santos Ferreira (BETA-Strasbourg University, 61 avenue de la Forêt Noire - 67085 Strasbourg Cedex, France; and Catolica Lisbon School of Business and Economics.)
    Abstract: We propose a unified framework bridging the gap between team and competition issues, in order to reconsider the social value of private and public information in price and quantity games under imperfect and dispersed information, and to compare the corresponding outcomes in terms of equilibrium and social welfare. The informational distortion associated with the competition motive may lead to a negative social value of private information and reverse the perfect information result in favor of strategic substitutability as the source of higher profit and social welfare.
    Keywords: beauty contest, competition, coordination, strategic complementarity, anti-coordination, strategic substitutability, price game, quantity game, dispersed information, public information.
    JEL: D43 D82 L13
    Date: 2017
  13. By: Luciano Fanti; Luca Gori
    Abstract: This article revisits the works of Lambertini and Rossini (1998) and Bernhofen and Bernhofen (1999) and also extends the analysis to the effects of product innovation in Cournot and Bertrand duopolies with sales delegation.
    Keywords: Duopoly; Product innovation; Sales delegation
    JEL: D43 J53 L1
    Date: 2017–01–01
  14. By: Francesco Decarolis (Einaudi Institute for Economics and Finance, Via Sallustiana, 62, Rome, Italy); Gabriele Rovigatti (University of Chicago Booth School of Business, 5807 S. Woodlawn Ave, Chicago, IL)
    Abstract: We present an empirical investigation of the role of marketing agencies in Google’s online ad auctions. By combining data on advertisers’ affiliation to marketing agencies with data on bidding in ad auctions, we analyze how changes in the concentration of clients in the same industry under the same ad network are associated with changes in keyword bidding in terms of entry, exit, and pricing strategies. Moreover, by exploiting the case of a recent merger between agencies, we estimate through a difference-in-differences strategy that an increase in concentration leads to reduction in the average cost-per-click of the keywords affected by the merger.
    Keywords: Online Advertising, Internet Auctions, Marketing Agency, Ad Network, Agency Trading Desk
    JEL: C72 D44 L81
    Date: 2017–09
  15. By: Thomas W. Quan (University of Georgia); Kevin R. Williams (Cowles Foundation, Yale University)
    Abstract: Online retail gives consumers access to an astonishing variety of products. However, the additional value created by this variety depends on the extent to which local retailers already satisfy local demand. To quantify the gains and account for local demand, we use detailed data from an online retailer and propose methodology to address a common issue in such data-sparsity of local sales due to sampling and a significant number of local zeros. Our estimates indicate products face substantial demand heterogeneity across markets; as a result, we find gains from online variety that are 45% lower than previous studies.
    Keywords: Product Variety, Demand Estimation, Long Tail, Online Retail
    JEL: C13 L67 L81
    Date: 2017–06
  16. By: Marc Ivaldi; Jiekai Zhang
    Abstract: This paper empirically investigates the advertising competition in the French broadcast television industry within a two-sided market framework. We use a unique dataset on the French broadcast television market including audience, prices, and quantities of advertising of twenty-one TV channels from March 2008 to December 2013. We specify a structural model of oligopoly competition and identify the shape and magnitude of the feedback loop between TV viewers and advertisers. We also implement a simple procedure to identify the conduct of firms on the market. We find that the nature of competition in the French TV advertising market is of the Cournot type. Further, we provide empirical evidence that the price-cost margin is not a good indicator of the market power of firms operating on two-sided markets. Finally, we provide a competition analysis. The counterfactual simulation suggests that the merger of advertising sales houses would not have significantly affected the equilibrium outcomes in this industry because of the strong network externalities between TV viewers and advertisers. These results provide a critical evaluation of the 2010 decision of the French competition authority to authorize the acquisition of two broadcast TV channels by a large media group under behavioral remedies.
    Keywords: advertising, competition, media, TV, two-sided market, market conduct
    JEL: D22 K21 L13 L22 L41 M37
    Date: 2017
  17. By: Wolfgang Kerber (University of Marburg)
    Abstract: The digital revolution has reinvigorated the discussion about the problem how to consider innovation in the application of competition law. This raises difficult questions about the relationship between competition and innovation as well as what kind of assessment concepts competition authorities should use for investigating innovation effects, e.g., in merger cases. This paper, on one hand, reviews briefly our economic knowledge about competition and innovation, and claims that it is necessary to go beyond the limited insights that can be gained from industrial economics research about innovation (Schumpeter vs. Arrow discussion), and take into account much more insights from innovation research, evolutionary innovation economics, and business and management studies. On the other hand, it is also necessary to develop much more innovation-specific assessment concepts in competition law (beyond the traditional product market concept). Using the example of assessing innovation competition in merger cases, this article suggests to analyze much more systematically the resources (specialized assets) that are necessary for innovation. This concept is directly linked to the new discussion about the Dow/DuPont case in the EU and about data as necessary resource for (data-driven) innovation.
    Keywords: Competition, innovation, competition law, merger control, innovation market
    JEL: K21 L12 L41 O31
    Date: 2017
  18. By: Alexandre de Corniere (Toulouse School of Economics, France); Miklos Sarvary (Columbia Business School, USA)
    Abstract: The growing influence of internet platforms acting as content aggregators is one of the most important challenges facing the media industry. We develop a parsimonious model to understand the impact of content bundling by a social platform. In our model consumers can access news either directly through a newspaper's website, or indirectly through a platform, which also offers social content. Even though the platform shares revenues with newspapers whose content it publishes, content bundling harms newspapers. Its effect on news quality and news consumption depends on the media market structure and on whether the platform can personalize the content bundle.
    Keywords: User-Generated Content (UGC), Media Competition, News Quality
    JEL: L13 L43 L96
    Date: 2017–10
  19. By: Haraguchi, Junichi; Matsumura, Toshihiro; Yoshida, Shohei
    Abstract: We formulate a mixed oligopoly model in which one state-owned public enterprise competes with n private firms in the same market and m private firms in the neighboring market. We investigate how n and m affect the optimal degree of privatization. We find a nonmonotone (monotone) relationship between the optimal degree of privatization and the number of private competitors in the neighboring (same) market. The optimal degree of privatization is increasing in the number of private firms in the same market, and the relationship between the optimal degree of privatization and the number of private competitors in the neighboring market is an inverted U-shape. An increase in m more likely increases the optimal degree of privatization when the degree of product differentiation is low. Our results suggest that more competitive pressure from competitors supplying differentiated products can reduce the optimal degree of privatization.
    Keywords: market competitiveness, partial privatization, number of private firms
    JEL: H44 L33 L44
    Date: 2017–10–16
  20. By: Stagnaro, Carlo; Amenta, Carlo; Di Croce, Giulia; Lavecchia, Luciano
    Abstract: Italian electricity consumers have been free to choose their supplier since 2007, but about 66 percent are still supplied under the so-called maggior tutela, a regulated regime. Italy’s Annual Competition Law states that regulated prices will be phased out by July 1st, 2019. This paper performs an analysis of the country’s retail electricity market following the structure-conduct-performance paradigm. Two main issues emerge that need to be addressed: market concentration and consumer inertia. The paper proposes several policy tools, aimed at both the supply and the demand side, aimed at promoting supply diversification, market entry and an increased customer engagement.
    Keywords: electricity, gas, liberalization, energy, italy
    JEL: L11 Q41 Q48
    Date: 2017–10
  21. By: Tilsa Ore Monago (Stony Brook University, Department of Economics, 100 Nicolls Road, Stony Brook, NY 11794-4384);
    Abstract: Based on a game theoretical model I previously developed, I present some evidence of the effect of the unlocked-handset policy recently implemented in Peru based on market analysis and reduced form empirical methods using consumer panel data. From the market analysis, declining prices are observed with the implementation of the policy in January 2015, also the switching rate rocketed since then. To retain consumers and attract rival's consumers, companies responded also with very low on-net prices through their "private network" with unlimited minutes, which may have increased the network effects in the market. From my estimation, I found a significant negative effect of switching costs on demand for voice traffic (which suggest a positive effect of the unlocked-handset policy on demand) and positive network effects on the demand.
    Keywords: switching costs; mobile telecommunications; unlocked-handsets policy
    JEL: L13 L43 L96
    Date: 2017–12
  22. By: Daniel Björkegren (Brown University, Department of Economics, 64 Waterman Street, Providence RI 02912, USA)
    Abstract: Many modern technologies have network effects, and as a result lead to industries with natural monopolies. How should societies discipline these industries? This is a preliminary paper that analyzes the scope for competition to affect welfare and investment in the Rwandan mobile phone network during a 4.5 year period of dramatic growth. I use transaction data from nearly the entire network of Rwandan mobile phone subscribers at the time. I use the method and estimates of Bjorkegren (2017), which identify network effects based on usage after adoption. The Rwandan government eventually allowed competition; I evaluate what may have happened had competition been introduced at an earlier stage of the network’s growth. Had the monopolist simply charged the eventual competitive prices, welfare would have risen substantially. However, only a fraction of the revenue from building the rural tower network came from calls within rural areas; as a result, had the rest of the network been split among providers, there may have been lowered incentives to invest. A subsequent version of this paper will simulate the effects of competition under different policy regimes.
    Keywords: network goods, infrastructure, information technology
    JEL: O33 L96 O18 L51
    Date: 2017–10
  23. By: Tedi Skiti (Fox School of Business, Temple University)
    Abstract: In this article, I present causal effects of institutional entry barriers to new firms on incumbents’ technological innovation. In particular, I investigate the effect of entry barriers to municipal providers on incumbents’ technology deployment in the U.S. broadband industry. I use a spatial regression discontinuity design for private incumbents’ investment behavior and different entry regimes as sharp cutoffs for municipal entry threat. I collect and combine unique firm-level data on cable investment decisions and state-level data on legal entry barriers. I find that in markets with these entry barriers incumbents invest less in new technologies. Specifically, I find that the local entry barriers lead to a 20% lower technology adoption rate by cable incumbents because of reduced entry threat. These results imply that institutions that restrict entry of new firms can lead to significantly decreased technological innovation and lower internet quality across local markets, not only by deterring new firms but also by altering incumbents’ strategic investment in broadband networks.
    Keywords: Innovation, Entry Barriers, Broadband, Municipal, Spatial Discontinuity
    Date: 2017–09
  24. By: Heywood, John S.; Jirjahn, Uwe; Pfister, Annika
    Abstract: Using German establishment data, this paper examines the relationship between product market competition and the extent of employer provided training. We demonstrate that high product market competition is associated with increased training except when the competition is so severe as to threaten liquidation to a firm. We take this as evidence of an inverted U-shaped relationship. We also make clear that while this relationship is very evident for the service sector it is largely missing for manufacturing where we confirm earlier results of no relationship.
    Keywords: Competition,Employer Provided Training,Manufacturing,Services
    JEL: J24 L00 M53
    Date: 2017
  25. By: Philipp Kohlgruber (University of Graz, Austria); Christoph Kuzmics (University of Graz, Austria)
    Abstract: We build an oligopoly model of the market of scientific journals that allows us to relate the (in-)efficiency of this market to the exogenous distribution of article quality. Journal quality is endogenously determined by the submission choices of scientists. The efficiency of any stable equilibrium depends crucially on the exogenous distribution of article quality, especially on the fatness of the upper tail. For the empirically plausible Pareto distribution the market is inefficient even in the limit as the number of publishers tends to infinity.
    Keywords: Oligopoly; Natural monopoly; Efficiency; Price competition; Endogenous product differentiation
    JEL: C72 C73 D43 L13 L15 L82
    Date: 2017–10
  26. By: Xu, Yan (Tilburg University, School of Economics and Management)
    Abstract: This thesis consists of three essays in quantitative marketing, focusing on structural empirical analysis of the evolution of consumer brand preference under incomplete information and the effect of time on consumer purchase behavior. The first essay studies the evolution of consumer brand preferences in experience goods market and investigates brands’ optimal temporary price promotion decisions. The second essay examines the role of time in determining a household’s use of the market by systematically studying the effect of time on household purchase behaviors. The final essay models information spillovers across brands and product types, and formally shows that the model can be easily applied to standard consumer choice panel data in repeat-purchase experience goods market.
    Date: 2017
  27. By: Planer-Friedrich, Lisa; Sahm, Marco
    Abstract: We compare the strategic potential of Corporate Social Responsibility (CSR) and Customer Orientation (CO) as commitments to larger quantities in Cournot competition, modeled as a multi-stage game. First, in addition to profits, firms can choose to care for the surplus of either all consumers (CSR) or their own customers only (CO). Second, they decide upon the weight of this additional objective. We find that firms prefer to care for all consumers, choosing positive levels of CSR.
    JEL: D43 L13 L21
    Date: 2017

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