nep-com New Economics Papers
on Industrial Competition
Issue of 2017‒10‒29
twenty-six papers chosen by
Russell Pittman
United States Department of Justice

  1. On the Dilution of Market Power By Kokovin, Sergey; Parenti, Mathieu; Thisse, Jacques-François; Ushchev, Philip
  2. Capacity constrained price competition with transportation costs By Muthers, Johannes; Hunold, Matthias
  3. Multiple-Quality Cournot Oligopoly and the Role of Market Size By Miao, Zhuang; Long, Ngo Van
  4. Pricing strategies: who leads and who follows in the air and rail passenger markets in Italy By Bergantino, Angela Stefania; Capozza, Claudia; Capurso, Mauro
  5. Triple-play (un)bundled pricing – cui bono? By Howell, Bronwyn E.; Potgieter, Petrus H.
  6. Assessing the impact of mobile consolidation on innovation and quality: An evaluation of the Hutchison/Orange merger in Austria By Pedrós, Xavier; Bahia, Kalvin; Castells, Pau; Abate, Serafino
  7. An empirical study on firms' product entry strategy in the U.S. smartphone market By Lee, Kyungyul; Kwon, Youngsun
  8. Interconnection and Prioritization By Baake, Pio; Sudaric, Slobodan
  9. How Antitrust Enforcement Can Spur Innovation: Bell Labs and the 1956 Consent Decree By Martin Watzinger; Thomas A. Fackler; Markus Nagler; Monika Schnitzer
  10. Ad Networks, Consumer Tracking, and Privacy By Anna D'Annunzio; Antonio Russo
  11. Impact of competition and regulation on prices of mobile services: Evidence from France By Grzybowski, Lukasz; Nicolle, Ambre; Zulehner, Christine
  12. Advertising Spending and Media Bias: Evidence from News Coverage of Car Safety Recalls By Graham Beattie; Ruben Durante; Brian Knight; Ananya Sen
  13. Can Competition Extend the Golden Age of Antibiotics? By Eswaran, Mukesh; Gallini, Nancy
  14. Competition and physician behaviour: Does the competitive environment affect the propensity to issue sickness certificates? By Kurt R. Brekke; Tor Helge Holmäs; Karin Monstad; Odd Rune Straume
  15. Product Market Competition and Employer Provided Training in Germany By Heywood, John S.; Jirjahn, Uwe; Pfister, Annika
  16. Tariff Diversity and Competition Policy: Drivers for Broadband Adoption in the European Union By Lange, Mirjam R.J.
  17. The Effects of Mandatory Disclosure of Supermarket Prices By Ater, Itai; Rigbi, Oren
  18. Mathematical Modelling for Time-of-Use Pricing of Electricity in Monopoly and Oligopoly By Kaicker, Nidhi; Dutta, Goutam; Das, Debamanyu; Banerjee, Subhashree
  19. Parallel Imports and Repair Services By ISHIKAWA, Jota; MORITA, Hodaka; MUKUNOKI, Hiroshi
  20. Price controls versus compulsory licensing: effects on patent-holders and consumers By Eric W Bond; Kamal Saggi
  21. Selling Gasoline as a By-Product: The Impact of Market Structure on Local Prices By Haucap, Justus; Heimeshoff, Ulrich; Siekmann, Manuel
  22. Firm Innovation under Import Competition from Low-Wage Countries By Ujjayant Chakravorty; Runjuan Liu; Ruotao Tang
  23. Exploitation and Recycling of Exhaustible Resources: The Case of Rare Earths and Phosphorus By Bocar Samba Ba; Raphaël Soubeyran
  24. A Blessing in Disguise? Market Power and Growth with Financial Frictions By Joachim Jungherr; David Strauss
  25. Assessing Anticompetitive Practices in Two-Sided Markets: A Comparative Analysis of four Antitrust Proceedings against By Caccinelli, Chiara; Toledano, Joëlle
  26. A preliminary analysis of mergers and acquisitions by Microsoft from 1992 to 2016: A resource and competence perspective By Lopez Giron, Ali Jose; Vialle, Pierre

  1. By: Kokovin, Sergey; Parenti, Mathieu; Thisse, Jacques-François; Ushchev, Philip
    Abstract: We show that a market involving a handful of large-scale firms and a myriad of small-scale businesses may give rise to different types of market structure, ranging from monopoly or oligopoly to monopolistic competition through new types of market structure. In particular, we find conditions under which the free entry and exit of small firms incentivizes the big firms to sell their varieties at the monopolistically competitive prices, as if they were to behave like in monopolistic competition. We call this result dilution of market power. The structure of preferences is the main driver for a specific market structure to emerge as an equilibrium outcome.
    Keywords: Dominant firms; monopolistically competitive fringe; monopolistic competition; oligopoly; contestable markets
    JEL: D43 F12 L13
    Date: 2017–10
  2. By: Muthers, Johannes; Hunold, Matthias
    Abstract: We characterize mixed-strategy equilibria in case of capacity constrained price competition, transportation costs and customer-specific pricing. Equilibrium prices weakly increase in the distance between supplier and customer. Despite prices above costs and excess capacities, the firms exclusively their serve home markets. Competition yields volatile market shares and an inefficient allocation of more distant customers to suppliers. Even ex-post subcontracts may restore efficiency only partly.
    JEL: L11
    Date: 2017
  3. By: Miao, Zhuang; Long, Ngo Van
    Abstract: We model an oligopoly where firms can choose the quality level of their products by incurring set-up costs that generally depend on quality level. If the set-up cost is independent of product quality, firms may choose to supply both types of quality.We focus on the long run equilibrium where free entry and exit ensure that the profit for each type of firm is zero. Using this framework, we study the implications of an increase in the market size. We show that for the existence of an equilibrium where some firms specialize in the low quality product it is necessary that the set-up cost for the lower quality product, adjusted for quality level, is lower than that for the higher quality product. In the case where the unit variable costs are zero, or they are proportional to quality level (so that unit variable costs, adjusted for quality, are the same), we show that an increase in the market size leads to (i) an increase in the fraction of firms that specialize in the high quality products, (ii) the market shares (both in value terms and in terms of volume of output) of high quality producers increases, and (iii) the prices of both types of product decrease. In the case where higher quality requires higher set-up cost (per unit of quality) but lower unit variable cost (per unit of quality), subject to certain bounds on the difference in unit variable costs, we obtain the result that an increase in the market size decreases the number of low quality firms, increases the number of high quality firms, and decreases the prices of both products. In the special case where the set up cost is independent of quality level, we find that all firms will produce both type of quality levels. In this case, an increase in the market size will reduce the value shares of low quality products, but will leave their volume share unchanged; and the market expansion induces a fall in the relative price of the low quality product, and in the prices of both products in terms of the numeraire good. We carry out an empirical test of a version of the model, where set-up costs now refer to set-up costs to establish an export market, and they vary according to the quality of product that the firm exports to that market. We show that the data supported the hypothesis that the average qualities of the product are higher for bigger export markets.
    Keywords: Multiproduct firms; Cournot competition; Vertical product differentiation; Cost structure; Market size.
    JEL: L10 L13 L19
    Date: 2017–07–01
  4. By: Bergantino, Angela Stefania; Capozza, Claudia; Capurso, Mauro
    Abstract: In this paper, we aim at empirically uncovering the existence of price leadership in the passenger transport market, whose oligopolistic structure facilitates the strategic interaction among companies, with price being one of the principal elements of competition. The strategic interaction is particularly favoured by the fact that prices are easily observable online by all competitors. The analysis focuses on selected Italian city-pair markets that differ from one another with respect to the degree of inter and intra-modal competition and to the characteristics of the transport services provided. We exploit this heterogeneity to study transport operators’ strategic interactions in different competitive environments. We find evidence of the existence of price leadership, even though results differ across city-pair markets. In particular, it emerges that the incumbent operator, in either the air or the rail sector, always holds the role of leader.
    Date: 2017
  5. By: Howell, Bronwyn E.; Potgieter, Petrus H.
    Abstract: Bundling of broadband access with other services has been a defining characteristic of internet access markets for as long as broadband technologies have been available. Initially, cable television competitors entered telecommunications markets by bundling first voice telephony and subsequently (broadband) internet access with their television products. The fear that bundling broadband access with live sport content could distort competition in broadband markets by first facilitating the assumption of a dominant position in broadband markets and then the squeezing-out of small rivals with low levels of investment but higher costs led to the New Zealand Commerce Commission recently declining to grant clearance for a merger between the dominant pay television provider and the number two (by market share) fixed line broadband provider also the number one mobile operator (Commission 2017; B. E. Howell and Potgieter 2017a; B. E. Howell and Potgieter 2017b). We investigate the situation where a basic content package, a premium content package and broadband are offered by a firm and analyse the firm’s price-setting behaviour when customers react to a given set of prices by maximizing their individual consumer surplus. Numerical simulations with random customer valuations is used to illustrate the multiplicity of outcomes that can be expected from a regulatory intervention. We discuss issues arising from this analysis that should be pertinent to decisions in similar cases.
    Date: 2017
  6. By: Pedrós, Xavier; Bahia, Kalvin; Castells, Pau; Abate, Serafino
    Abstract: Assessing the impact of a merger – or predicting the impact of a merger – follows competition law and relies on economic practice. Competition authorities strive for consistency of approach, with assessments generally based on an analysis of the impact on prices, quality and innovation for consumers. Experience has shown, however, that the main measurement relied on by competition authorities is pricing; could the proposed merger increase prices in the short-term? How harmful would this be for the consumer? In the case of mergers in general, and mobile mergers in particular, we argue that whilst price is an important factor, there has been an over reliance on this single aspect of consumers outcomes and less consideration of quality and innovation.
    Date: 2017
  7. By: Lee, Kyungyul; Kwon, Youngsun
    Abstract: Prior studies often examine the effect of inertia on enterprise strategy for attracting new consumers or attacking competitors in an industry. Various sources of the firm act as inertia for the incumbents in the strategy; the most representative example is incentives. For incumbents, large incentives reduce competitive inertia and motivate them to change strategy. For example, poor financial performance acts as an incentive. This study asks the question: does prior good performance motivate managers to retain their strategies in a competitive environment? As products in modern society have a very short life span and change rapidly, it is very dangerous for a company to stay in one place without any change in their strategy. Therefore, this paper focuses on the relationship between past performance and strategic choices of firms, and considers managerial incentive as a mediator between the two, even in a rapidly changing society. We analyze three aspects of change in a firm’s product strategies –market preemption, product diversification, and incremental product innovation–to observe the effect of inertia in the U.S. smartphone market. The results showed that past good performance resulted in some company strategies becoming passive. In addition, the past good performance of a company showed negative effects in expanding its market segment. The results were similar in terms of incremental product innovation. This implies that companies did not devote more time to product development once their products were valued well. Consequently, our paper empirically tested that past good performance caused inertia in product diversification and incremental product innovation strategies.
    Date: 2017
  8. By: Baake, Pio; Sudaric, Slobodan
    Abstract: We analyze pricing and competition under paid prioritization within a model of interconnected internet service providers (ISPs), heterogeneous content providers (CPs) and heterogeneous consumers. We show that prioritization is welfare superior to a regime without prioritization (network neutrality) but yields lower incentives for investment in network capacities. As ISPs price discriminate between on-net and off-net CPs, their bottleneck property is propagated and competition for consumers increases resulting in a potential prisoner's dilemma when deciding whether to offer prioritization. We show that peering for prioritized traffic emerges as a collusive outcome and present off-net prices as a further collusive instrument.
    Keywords: interconnection,investment,network neutrality,prioritization
    JEL: L13 L51 L96
    Date: 2017
  9. By: Martin Watzinger; Thomas A. Fackler; Markus Nagler; Monika Schnitzer
    Abstract: We study the 1956 consent decree against the Bell System to investigate whether patents held by a dominant firm are harmful for innovation and if so, whether compulsory licensing can provide an effective remedy. The consent decree settled an antitrust lawsuit that charged Bell with having foreclosed the market for telecommunications equipment. The decree forced Bell to license all its existing patents royalty-free. The compulsory licensing increased follow-on innovation building on Bell patents by 17%. This effect is driven mainly by young and small companies. Yet, innovation increased only outside the telecommunications equipment industry, suggesting that compulsory licensing without structural remedies is ineffective in ending market foreclosure.
    Keywords: innovation, antitrust, intellectual property, compulsory licensing
    JEL: O30 O33 O34 K21 L40
    Date: 2017
  10. By: Anna D'Annunzio; Antonio Russo
    Abstract: We study the relation between ad networks, consumer privacy and the online advertising market. We consider two publishers that can outsource their ad inventories to an ad network, in a market where consumers and advertisers endogenously multi-home. Differently from publishers, the ad network tracks consumers across websites, limiting wasteful repetition of ads. However, its tracking capability depends on consumer privacy-related choices (e.g., accepting third-party cookies). We show that tracking may increase or decrease the provision of ads, depending on its effect on expected advertising returns and on how audience sizes respond to ad quantities. When they decide whether to allow tracking, consumers exert a positive externality on advertisers. If tracking reduces the provision of ads, there is also a positive indirect externality on consumers. Hence, there may be too little tracking in equilibrium, even from consumers’ perspective. We evaluate several privacy policies, including direct regulatory interventions and the creation of markets for the right to track consumers. Finally, we characterize the conditions such that outsourcing to the ad network expands the provision of ads compared to the case where publishers compete directly for advertisers.
    Keywords: advertising, ad network, internet, tracking, multi-homing, privacy
    JEL: D43 D62 L82 M37
    Date: 2017
  11. By: Grzybowski, Lukasz; Nicolle, Ambre; Zulehner, Christine
    Abstract: In this paper, we assess the impact of competition and regulation on prices of mobile services in France. We estimate hedonic price regressions using data on tariff plans offered by the main mobile telecommunications operator in France between May 2011 and December 2014. In this time period, the obtained quality-adjusted price index decreased by about 51% as compared to a decline in average prices without quality adjustment of 8.9%. In a second step, we relate the quality-adjusted prices to a set of competition and regulation variables and find that the launch of 4G networks by mobile operators was the main driver of price reductions for classic tariffs with commitment. Low cost tariffs without commitment which were introduced to pre-empt the entry of low cost competitor declined at the time of entry. Moreover, we find that regulation, which is approximated by the level of mobile termination charges and international roaming price caps for voice and data, has jointly a significant impact on quality-adjusted prices. In percentage terms, competition is responsible for about 68% of total price decline. We conclude that the reduction in quality-adjusted prices in the last years was largely caused by competition between established operators and by entry of fourth low cost operator.
    Keywords: Mobile telecommunications,hedonic price regression,regulation,entry
    JEL: L13 L50 L96
    Date: 2017
  12. By: Graham Beattie; Ruben Durante; Brian Knight; Ananya Sen
    Abstract: Do news media bias content in favor of advertisers? We examine the relationship between advertising by auto manufacturers in U.S. newspapers and news coverage of car safety recalls. This context allows us to separate the influence of advertisers, who prefer less coverage, from that of readers, who demand more. Consistent with theoretical predictions, we find that newspapers provide less coverage of recalls by their advertisers, especially the more severe ones. Competition for readers from other newspapers mitigates bias, while competition for advertising by online platforms exacerbates it. Finally, we present suggestive evidence that lower coverage increases auto fatalities.
    JEL: L10 L82 M21 M37
    Date: 2017–10
  13. By: Eswaran, Mukesh; Gallini, Nancy
    Abstract: Countries world wide face an imminent global health crisis. As resistant bacteria render the current stock of antibiotics ineffective and the pipeline of back-up drugs runs dry, pharmaceutical companies are abandoning their research in antibiotics. In this paper we ask: Why are pharmaceutical companies closing antibiotic research labs when the stakes are so high? Implementing a simple dynamic framework, we show that the environment for new antibiotics is relatively hostile, compared to other medicines, due to market failures that result in excessive use and acceleration of natural selection. The analysis reveals, however, that increased competition between drugs can actually slow down the rate of resistance without, in some cases, diluting research incentives. This result, which is bolstered by scientific evidence, arises from a fundamental interplay between economic and biological externalities. We propose a patent-antitrust regime for aligning drug research and usage with those of the social planner, which implies an alternative justification of the patent system.
    Keywords: antibiotic resistence, market competition, R&D incentives, patents
    JEL: I11 I12 I13 O31 O38
    Date: 2017–10–19
  14. By: Kurt R. Brekke (Department of Economics, Norwegian School of Economics); Tor Helge Holmäs (Uni Research Rokkan Centre); Karin Monstad (Uni Rokkan Centre); Odd Rune Straume (NIPE/University of Minho)
    Abstract: Competition among physicians is widespread, but compelling empirical evidence on the impact on service provision is limited, mainly due to lack of exogenous variation in the degree of competition. In this paper we exploit that many GPs, in addition to own practice, work in local emergency centres, where the matching of patients to GPs is random. This allows us to observe the same GP in two dfferent competitive environments; with competition (own practice) and without competition (emergency centre). Using rich administrative patientlevel data from Norway for 2006-14, which allow us to estimate high-dimensional fixed-effect models to control for time-invariant patient and GP heterogeneity, we and that GPs with a fee-for-service (fixed salary) contract are 11 (8) percentage points more likely to certify sick leave at own practice than at the emergency centre. Thus, competition has a positive impact on GP´s sick listing that is reinforced by financial incentives.
    Keywords: Physicians, Competition, Sickness certification
    JEL: I11 I18 L13
    Date: 2017
  15. By: Heywood, John S. (University of Wisconsin, Milwaukee); Jirjahn, Uwe (University of Trier); Pfister, Annika (University of Trier)
    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: 2017–09
  16. By: Lange, Mirjam R.J.
    Abstract: While second-degree price discrimination is standard in commercial practice in many industries, consumer advocates and public interest groups have reacted with skepticism against tendencies to move away from flat rates and introduce greater tariff diversity. This paper provides an empirical analysis how the differentiation of broadband tariffs with respect to retail prices affects fixed broadband subscription using time-series data. The empirical analysis is based on a unique dataset of 10,200 retail broadband offers spanning the 2003–2011 period and including 23 EU member states. Results show that an increase in tariff diversity provides a significant impetus to broadband adoption, wherefore demands by some public interest groups to limit price discrimination in broadband markets should be viewed with some caution as reduced price discrimination may come at the cost of lower penetration rates.
    Keywords: Broadband demand,Tariff diversity,Price discrimination,Dynamic panel data analysis
    JEL: L86 L96
    Date: 2017
  17. By: Ater, Itai; Rigbi, Oren
    Abstract: We study how mandatory online disclosure of supermarket prices affects prices and price dispersion in brick-and-mortar stores. Using data collected before and after a transparency regulation went into effect in the Israeli food retail market, multiple complementary control groups and relying on a differences-in-differences research design, we document a sharp decline in price dispersion and a 4% to 5% drop in prices following the transparency regulation. The price drop varied across stores and products; it was smaller among branded products than among private-label products, and it was smaller among stores and products that were likely to have been associated with more intense search patterns even before prices became transparent (e.g., products in heavy-discount chains; popular products; products that meet stringent kosher requirements). Finally, we show that prices declined as more consumers used price-comparison websites, and we highlight the role of media coverage in encouraging retailers to set lower prices.
    Keywords: Price Transparency; Information; Mandatory Disclosure; Retail Food; Supermarkets
    JEL: D83 L66 L81
    Date: 2017–10
  18. By: Kaicker, Nidhi; Dutta, Goutam; Das, Debamanyu; Banerjee, Subhashree
    Abstract: This study establishes the feasibility condition for efficiency gains to arise from time-of-use pricing in the electricity market in a monopolistic and oligopolistic set up using constrained optimization. In an oligopolistic set-up, the strategic interaction between producers depends on the level of demand. In case of high demand, the producers compete on the basis of output they will produce, resulting in a Cournot-type competition. On the other hand, in case of low demand, an oligopolistic structure may break with only the most efficient firm operating, or results in the emergence of leader firms and follower firms, i.e. the Stackleberg model.
    Date: 2017–10–17
  19. By: ISHIKAWA, Jota; MORITA, Hodaka; MUKUNOKI, Hiroshi
    Abstract: This study explores the effect of parallel imports on both domestic and foreign countries when the producer may refuse to provide repair and maintenance services for parallel imported units, or charge higher prices for those services. This service discrimination makes it possible for the producer to weaken intra-brand competition and reduce the degree of price convergence between countries. If this is the case, both the positive effect of parallel imports on consumers in the destination country and the negative effect on the producer and consumers in the source country become weaker. If the quality of the good depends on the producer’s investment, permitting parallel imports in the presence of the service discrimination could lower the quality, because lower quality leads to a larger price gap between countries. As a result, it is possible that prices increase, consumers lose, and welfare deteriorates in both countries. This negative welfare effect is more likely to emerge as the liberalization of trade in goods proceeds. The prohibition of service discrimination recovers the positive welfare effect.
    Keywords: parallel imports, service discrimination, goods quality, welfare, trade liberalization
    Date: 2017–10
  20. By: Eric W Bond (Vanderbilt University); Kamal Saggi (Vanderbilt University)
    Abstract: We extend the model of Bond and Saggi (2014) in which a patent-holder chooses between direct entry and the voluntary licensing of its technology to a local firm in a developing country. We compare two scenarios: one where the country imposes a price control on the patent-holder and another where it issues a compulsory license to the local firm if the patent-holder decides to neither enter nor license its technology voluntarily. A price control makes entry less attractive to the patent-holder relative to voluntary licensing whereas the threat of compulsory licensing has the opposite effect. While a price control always makes the patent-holder worse off, the option of compulsory licensing can sometimes be to its advantage.
    Keywords: Patented Goods, Compulsory Licensing, Voluntary Licensing, Price Controls, Quality, Welfare
    JEL: F1
    Date: 2017–10–21
  21. By: Haucap, Justus; Heimeshoff, Ulrich; Siekmann, Manuel
    Abstract: We use a novel data set with exact price quotes from virtually all German gasoline stations to empirically investigate how a temporary variance in local market structure induced by restricted opening hours of specific players affects price competition. We find that, during their hours of opening, they have a significant negative price effect on nearby competitors.
    JEL: L71
    Date: 2017
  22. By: Ujjayant Chakravorty; Runjuan Liu; Ruotao Tang
    Abstract: In recent years, manufacturing firms in the United States have faced increasing import competition from low-wage countries, especially China. Does this competition hurt or help innovation by firms? This paper studies the effect of the surge in imports from China on innovation in the US manufacturing sector. We combine patent, firm and trade data during 1990-2006 for US publicly-listed firms in the Compustat dataset. We find consistent evidence that Chinese import competition had a positive effect on firm innovation, as measured by citation-weighted patent applications. This positive effect persists when we instrument import competition in the US by using Chinese import penetration in the United Kingdom. Next we investigate this relationship between import competition and innovation by considering industry and firm heterogeneity. We find that firms in low-tech industries and those with a lower degree of product differentiation show a significant positive response to import competition. Firms with a higher capital intensity and lower labor productivity also exhibit a greater response. These results are shown to be robust to a variety of measures for import penetration and innovation.
    Keywords: import competition, innovation, international trade, manufacturing firms, patents
    JEL: F10 F14 O31 O32
    Date: 2017
  23. By: Bocar Samba Ba (Centre d'Etudes et de Recherches sur le Développement International (CERDI)); Raphaël Soubeyran (Institut National de Recherches Agronomiques (INRA) de Montpellier (LAMETA))
    Abstract: We study the exploitation of recyclable exhaustible resources such as rare earths and Phosphorus. We use a standard Hotelling model of resource exploitation that includes a primary sector and a recycling sector. We show that, when the primary sector is competitive, the price of the recyclable resource increases through time. This result stands in contrast to durable resources, for which the optimal price path is either decreasing or U-shaped. We then show a new reason why the price of an exhaustible resource may decrease: when the primary sector is monopolistic, the primary producer has incentives to delay its production activities in order to delay recycling. As a consequence, the price path of the recyclable resource may be U-shaped. We also show that a technological improvement in the recycling sector increases the price in the short term but decreases it later.
    Keywords: Rare earths, Phosphorus, Recycling, Competition, Optimal control
    JEL: D40 D43 L12 L13 Q31
    Date: 2017–01
  24. By: Joachim Jungherr; David Strauss
    Abstract: Firm market power raises growth in the presence of financial frictions. The reason is that self financing becomes more effective if firm earnings are higher. We test this mechanism using Korean manufacturing data 1963-2003. We find that more concentrated sectors grow faster. This positive empirical relationship between concentration and growth gets weaker as credit becomes more abundant. Using a simple growth model, we study counterfactuals. The observed rise of concentration in Korea until the mid-1970s has increased manufacturing value added 1963-2003 on average by at least 0:6% per year. The effect of firm market power on worker welfare is ambiguous.
    Keywords: market power, financial frictions, growth
    JEL: L13 O11 O16
    Date: 2017–10
  25. By: Caccinelli, Chiara; Toledano, Joëlle
    Abstract: This paper aims to shed light on the economic tools, as well as the legal-economic reasoning, which are used by different European antitrust authorities to assess the allegedly anticompetitive practices of a platform operating in a two-sided market (2SM). First of all, we show that despite the flourishing literature on 2SM economics, antitrust authorities are still facing major challenges when taking decisions concerning two-sided platforms (2SPs). We suggest that in the lack of a sound economic theory on the effects of abusive behaviour in 2SMs, antitrust authorities have a discretionary power as to what to retain or ignore of a 2SP’s business model. Secondly, we perform a cross-country, comparative analysis of four recent competition proceedings against the 2SP and highlight conceptual and practical divergences among antitrust authorities which are bound by and applying a common European legislation towards the same transnational company. Finally, we review the effects of the different authorities’ decisions and draw some conclusions as to the effectiveness and appropriateness of the measures which are currently implemented towards 2SPs.
    Date: 2017
  26. By: Lopez Giron, Ali Jose; Vialle, Pierre
    Abstract: Merger and acquisitions (M&A) have been a frequently used growth mode in the ICT Industry during the last two decades. They did so for several reasons, such as expanding the scale and scope of their business or acquire new capabilities Microsoft is highly representative of those ICT firms who have intensively relied on M&A for growth. Microsoft since its foundation has acquired around 200 companies; in average 6 companies per year and has targeted different sectors of the ICT business. Up to the authors’ knowledge, no exhaustive analysis of the acquisitions made by Microsoft over a long period has been made, in particular with a focus on Resources and Competence. In this paper, we aim at identifying the patterns behind the acquisition of numerous companies made by Microsoft since 1992, in terms of end-product, type of business, core product, resource and competences. We put a particular emphasis on the resource and competence acquired through these deals. By document research, we have been able to collect relevant information on 178 acquisitions between 1992 and 2016. In this paper, we present the methodology we have followed and some preliminary results. We conclude by discussing possible research extensions based on the current research.
    Keywords: Merger and acquisitions,resource and competence,strategy,Microsoft
    Date: 2017

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