|
on Industrial Competition |
| By: | Sen, Debapriya; Tauman, Yair |
| Abstract: | This paper presents a comprehensive analysis of patent licensing in a Cournot oligopoly with general demand and looks at both outside and incumbent innovators. The licensing policies considered are upfront fees, unit royalties and combinations of fees and royalties (FR policies). It is shown that (i) royalties unambiguously ensure full diffusion of the innovation while diffusion is limited under upfront fees, (ii) the Cournot price is higher under royalties compared to upfront fees and the price could even exceed the post-innovation monopoly price, (iii) for generic values of magnitudes of the innovation, when the industry size is relatively large, royalties are superior to upfront fees for the innovator and (iv) for any m, there is always a non empty subset of m-drastic innovations such that for relatively large industry sizes, upfront fee policy results in higher consumer surplus as well as welfare compared to both royalty and FR policies. |
| Keywords: | patent licensing; m-drastic innovation; royalties; upfront fees; FR policy |
| JEL: | D4 D43 D45 L13 L24 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88573&r=com |
| By: | Yi-Ling Cheng (Institute of Economics, National Sun Yat-sen University); Takatoshi Tabuchi (Faculty of Economics, The University of Tokyo) |
| Abstract: | This study aims to understand product proliferation and Â…first mover advantage in the case of multiproduct Â…firms that engage in Stackelberg competition on the number of varieties and prices. We show that when fiÂ…rms sequentially choose the number of varieties and then simultaneously decide prices, the leader produces more varieties and enjoys fiÂ…rst mover advantage. By contrast, when the leader sets both the number of varieties and prices before the follower does, the follower tends to produce more varieties and enjoy second mover advantage in the case of a large demand and a small cost of expanding product lines. This result sharply contrasts with those of studies on the sequential entry of single-product firms. We also show that the market provides too few varieties relative to the social optimum. |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2018cf1091&r=com |
| By: | Ben Mermelstein; Volker Nocke; Mark A. Satterthwaite; Michael D. Whinston |
| Abstract: | We study optimal merger policy in a dynamic model in which the presence of scale economies implies that firms can reduce costs through either internal investment in building capital or through mergers. The model, which we solve computationally, allows firms to invest or propose mergers according to the relative profitability of these strategies. An antitrust authority is able to block mergers at some cost. We examine the optimal policy for an antitrust authority who cannot commit to its future policy rule and approves or rejects mergers as they are proposed, considering both consumer value and aggregate value as its possible objectives. We find that the optimal policy can differ substantially from what would be best considering only welfare in the period the merger is proposed. In general, antitrust policy can greatly affect firms' optimal investment behavior, and firms' investment behavior can in turn greatly affect the antitrust authority's optimal policy. Moreover, externalities imposed by mergers on rivals can have significant effects on firms' investment incentives and thereby shape the optimal policy. |
| Keywords: | Horizontal merger, merger policy, investment, scale economies, antitrust |
| JEL: | L13 L40 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_038_2018&r=com |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88158&r=com |
| By: | Hélène Latzer (CEREC - Université Saint-Louis - Bruxelles, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper introduces multi-quality firms within a Schumpeterian framework. Featuring non-homothetic preferences and income disparities in an otherwise standard quality-ladder model, we show that the resulting differences in the willingness to pay for quality among consumers generate both positive investments in R&D by industry leaders and positive market shares for more than one quality, hence allowing for the emergence of multi-product firms within a vertical innovation framework. This positive investment in R&D by incumbents is obtained with complete equal treatment in the R&D field between the incumbent patentholder and the challengers: in our framework , the incentive for a leader to invest in R&D stems from the possibility for an incumbent having innovated twice in a row to efficiently discriminate between rich and poor consumers displaying differences in their willingness to pay for quality. We hence exemplify a so far overlooked demand-driven rationale for innovation by incumbents. Such a framework also makes it possible to analyze the impact of inequality both on long-term growth and on the allocation of R&D activities between challengers and incumbents. We find that an increase in the income gap positively impacts an econ-omy's growth rate, partly shifting R&D activities from challengers to incumbents. On the other hand, a greater income concentration is detrimental for growth, diminishing both the incumbents' and the challengers' R&D activities. |
| Keywords: | Growth,Innovation,Income inequality |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01387266&r=com |
| By: | Shen Hui |
| Abstract: | Firms in durable good product markets face incentives to inter-temporally price discriminate, by setting high initial prices to sell to consumers with the highest willingness to pay, and cutting prices thereafter to appeal to those with lower willingness to pay. The profitability of such pricing policies is hampered by the fact that many experience goods are of uncertain quality to the consumers at first, who have incentive to resolve the uncertainty through social learning before making a purchase. In addition, forward-looking consumers wait for price drop, which further limits the effect of varying prices. I develop a framework to investigate empirically the optimal pricing over time of a firm selling a durable good product to such strategic consumers. Prices in the model are equilibrium outcomes of a game played between forward-looking consumers who strategically delay purchases to avail of better information and lower prices in the future, and a forward-looking firm that takes this consumer behavior into account in formulating its optimal pricing policy. The model outlines first, a dynamic model of demand incorporating forward-looking consumer behavior, and second, an algorithm to compute the optimal dynamic sequence of prices given these demand estimates. The model is solved using mathematical programming with equilibrium constraints (MPEC) method. I present an empirical application to the market for video games in the US. The results indicate that consumer forward-looking behavior has a significant effect on optimal pricing of games in the industry. Simulations reveal that the profit losses of ignoring forwardlooking behavior by consumers are large and economically significant, and suggest that market research that provides information regarding the extent of learning and discounting by consumers is valuable to video game firms. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:1232&r=com |
| By: | Matthew Grennan; Kyle Myers; Ashley Swanson; Aaron Chatterji |
| Abstract: | In markets where consumers seek expert advice regarding purchases, firms seek to influence experts, raising concerns about biased advice. Assessing firm-expert interactions requires identifying their causal impact on demand, amidst frictions like market power. We study pharmaceutical firms' payments to physicians, leveraging instrumental variables based on regional spillovers from hospitals' conflict-of-interest policies and market shocks due to patent expiration. We find that the average payment increases prescribing of the focal drug by 73 percent. Our structural model estimates indicate that payments decrease total surplus, unless payments are sufficiently correlated with information (vs. persuasion) or clinical gains not captured in demand. |
| JEL: | I1 L0 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24864&r=com |
| By: | David Bardey (Toulouse School of Economics, Universidad de Los Andes); Denis Gromb (HEC Paris - Ecole des Hautes Etudes Commerciales); David Martimort (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Jérôme Pouyet (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We consider a market in which sellers can exert an information-gathering effort to advise buyers about which of two goods best fits their needs. Sellers may steer buyers towards the higher margin good. We show that for sellers to collect and reveal information, profits on both goods must be sufficiently close to each other, i.e., lie within an implementability cone, which competition or regulation may ensure. Instruments to do so vary with the context. Controlling market power while improving the quality of advice is more difficult when sellers have private information on the profitability of the goods. |
| Keywords: | Asymmetric Information Keywords Mis-Selling, Asym- metric Information ,Mis-Selling, Expertise, Retailing, Competition, Regulation |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01400841&r=com |
| By: | Eugenio Miravete (University of Texas at Austin); Jeffrey Thurk (University of Notre Dame); Katja Seim (University of Pennsylvania) |
| Abstract: | Government often chooses simple rules to regulate industry even when firms and consumers are heterogeneous. We show this practice is sub-optimal for a large class of empirically-relevant consumer preferences. We evaluate the implications of in the context of alcohol pricing where the regulator uses a single markup rule that does not vary across products. We estimate an equilibrium model of wholesale pricing and retail demand for horizontally differentiated spirits that allows for heterogeneity in consumer preferences based on observable demographics. We show that the single markup increases market power among upstream firms, particularly small firms whose portfolios are better positioned to take advantage of the policy. For consumers, the single markup acts as a progressive tax by overpricing products favored by the rich. It also decreases aggregate consumer welfare though $16.7\%$ of consumers are better off under the policy. These consumers tend to be older, less wealthy or educated, and minorities. Simple policies therefore generate significant cross-subsidies and may be an effective tool for government to garner favor of key constituencies. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:611&r=com |
| By: | Lydia Cheung (School of Economics, Auckland University of Technology); Geoffrey Brooke (School of Economics, Auckland University of Technology) |
| Abstract: | This paper looks at the market for print advertising in New Zealand, which is characterized by rich variation in ownership structures of overlapping paid daily metropolitan newspapers and free weekly suburban newspapers. We first present stylized empirical facts on advertising rates and readership shares, from an original dataset. We then present a simple model whose market outcome varies with ownership structure in the same manner as our empirical observation. |
| Keywords: | Newspaper, Print Advertising, Ownership STructure, Competition |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:aut:wpaper:201801&r=com |
| By: | Oksana Loginova (Department of Economics, University of Missouri); Niladri B. Syam (Department of Marketing, Trulaske College of Business, University of Missouri) |
| Abstract: | We investigate the phenomenon of sourcing co-created products. Specifically, we study how a multi-product downstream firm should source from the upstream market, that is single-source versus multi-source, in a situation where the products are co-created with the suppliers. We conceptualize co-creation as investments made at different hierarchical levels aimed at reducing the production costs incurred by the supplies. We also incorporate into our model the downstream firm's decision to establish a collaborative, knowledge-sharing environment for its suppliers. Outright purchase from the upstream market serves as a benchmark. We find that the downstream firm may be worse off when the upstream suppliers collaborate, unless the cross-effect of its and its suppliers' investments is very large. For a commonly used additively separable cost function, we find that the downstream firm's optimal strategy is multi-source co-creation without collaboration. An important economic force that our analysis has uncovered is that single-sourcing of co-created products destroys the downstream firm's incentives to invest. Multi-sourcing softens the holdup problem, leading to a positive level of investment by the downstream firm. Finally, we find that the incentives of the downstream firm to multi-source are stronger for co-created products than for non-co-created products. |
| Keywords: | co-creation, product sourcing, collaboration, holdup |
| JEL: | C72 D4 L1 M31 |
| Date: | 2016–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1811&r=com |
| By: | Francesco Vona (Observatoire français des conjonctures économiques); Michele Raitano (Sapienza Università di Roma) |
| Abstract: | We investigate the impact of product market competition on returns to skills in Italy using a longitudinal dataset on individual working histories. This impact is identified using three exogenous shocks affecting competition: the unforeseen devaluation of the Lira in 1992, its return to a fixed exchange regime in 1996 and the market liberalisation in the utility and transport sectors in the late 1990s–early 2000s. We analyse how firm heterogeneity and shocks of different types and signs affect the impact of competition on skill premia. We find that opposite shocks have opposite effects: an increase (resp. decrease) in international competition increases (resp. decreases) skill premia. Moreover, international shocks have greater effects on medium sized firms, while domestic liberalisation shocks have greater effects on large incumbents. |
| Keywords: | Competition; Currency shocks; Firm size; Product; Market regulation; Skill premia |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/5ok8k1fle59qeqvc9bh292v16j&r=com |
| By: | Chao Luo |
| Abstract: | This dissertation is to study the interplay between large-scale electric vehicle (EV) charging and the power system. We address three important issues pertaining to EV charging and integration into the power system: (1) charging station placement, (2) pricing policy and energy management strategy, and (3) electricity trading market and distribution network design to facilitate integrating EV and renewable energy source (RES) into the power system. For charging station placement problem, we propose a multi-stage consumer behavior based placement strategy with incremental EV penetration rates and model the EV charging industry as an oligopoly where the entire market is dominated by a few charging service providers (oligopolists). The optimal placement policy for each service provider is obtained by solving a Bayesian game. For pricing and energy management of EV charging stations, we provide guidelines for charging service providers to determine charging price and manage electricity reserve to balance the competing objectives of improving profitability, enhancing customer satisfaction, and reducing impact on the power system. Two algorithms --- stochastic dynamic programming (SDP) algorithm and greedy algorithm (benchmark algorithm) are applied to derive the pricing and electricity procurement strategy. We design a novel electricity trading market and distribution network, which supports seamless RES integration, grid to vehicle (G2V), vehicle to grid (V2G), vehicle to vehicle (V2V), and distributed generation (DG) and storage. We apply a sharing economy model to the electricity sector to stimulate different entities to exchange and monetize their underutilized electricity. A fitness-score (FS)-based supply-demand matching algorithm is developed by considering consumer surplus, electricity network congestion, and economic dispatch. |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1808.03897&r=com |
| By: | Toomas Hinnosaar; Keiichi Kawai |
| Abstract: | We characterize a selling mechanism that is robust to the seller's uncertainty about the buyer's signal structure. We show that by offering a generous refund policy the seller can significantly reduce this type of uncertainty and regain market power. A simple mechanism that utilizes a generous refund policy and random discounts achieves the best guaranteed-profit among all possible mechanisms. |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1808.02233&r=com |
| By: | Ohnishi, Kazuhiro |
| Abstract: | This paper considers a quantity-setting oligopoly model with complementary goods where labour-managed firms are allowed to offer wage-rise contracts as a strategic commitment. The following two stages are considered. In the first stage, each firm independently decides whether or not to adopt a wage-rise contract as a strategic commitment device. In the second stage, each firm independently chooses and sells its actual output. The paper analyses the equilibrium of the labour-managed oligopoly model. |
| Keywords: | Cournot competition; Labour-managed oligopoly; Wage-rise contract; Complementary goods |
| JEL: | C72 D21 L13 |
| Date: | 2018–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88235&r=com |
| By: | David Autor (Massachusetts Institute of Technology); David Dorn (University of Zurich); Gary Pisano; Gordon Hanson (University of California, San Diego); Pian Shu (Georgia Institute of Technology) |
| Abstract: | The competitive shock to the U.S. manufacturing sector spurred by rising China import competition could either catalyze or stifle innovation. Using three distinct sources of variation to identify rising trade exposure, we provide a causal analysis of the effect of surging import competition on U.S. innovative activities. Applying a novel internet-based matching algorithm to map all U.S. utility patents granted by 2013 to firm-level data, and carefully accounting for the shifting concentration of patenting activity across sectors, we document a robust, negative impact of rising Chinese competition on firm-level and technology class-level patent production. Accompanying this fall in innovation, global employment, sales, profitability, and R&D expenditure all decline within trade-exposed firms. The trade-induced contraction along all margins of adjustment and for all measures of valuation suggest that the primary response of firms to greater import competition is to scale back their global operations. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:239&r=com |
| By: | Jens-Uwe Franck |
| Abstract: | The framework of EU law on cartel damages actions consists in part of rules established by the ECJ based on arts 101 and 102 TFEU in conjunction with the principle of effectiveness. These rules are an integral part of EU primary law. The notion of institutional balance, however, requires the Court to consider its own inherent limits on democratic legitimacy, accountability and expertise. In particular, the Court has to ensure that adequate scope remains for the EU legislature to exercise its legislative power pursuant to art.103 TFEU. It is argued that the ECJ has disregarded these restrictions and overstretched the principle of effectiveness––for instance, in its adjudication on liability for umbrella pricing and on access to leniency files, respectively. Consequently, the EU legislature must not consider itself bound by these standards. |
| Keywords: | Institutional balance; Principle of effectiveness; Democratic legitimacy; EU competition damages law; Courage v Crehan; Directive 2014/104; Access to leniency documents |
| JEL: | K21 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_037_2018&r=com |
| By: | Escobari, Diego; Rupp, Nicholas; Meskey, Joseph |
| Abstract: | Prices for the same flight change substantially depending on the time of purchase. This paper uses a unique dataset with round-the-clock posted fares to document significant within-day price variation. Labeling time-variation as discriminatory is difficult because the cost of an unsold airline seat changes with inventory, days before departure and aggregate demand expectations. After controlling for these factors and aggregating hourly fares to have a framework with two consumer types, we are able to identify a component that is largely consistent with dynamic price discrimination. We find higher prices during office hours (when business travelers are likely to buy) and lower prices in the evening (when leisure travelers are more likely to purchase). As the proportion of business travelers increases closer to departure, both price dispersion and price discrimination become larger. We provide an alternative explanation for the observed within-day price differentials which is related to Edgeworth price cycles. |
| Keywords: | Pricing, Price discrimination, Price dispersion, Airlines |
| JEL: | C23 D4 L11 L93 |
| Date: | 2018–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88287&r=com |
| By: | Escobari, Diego; Rupp, Nicholas; Meskey, Joseph |
| Abstract: | Prices for the same flight change substantially depending on the time of purchase. Labeling this time-variation as discriminatory is misleading because the cost of an unsold airline seat changes with inventory, days before departure and aggregate demand expectations. This paper uses a unique dataset with round-the-clock posted fares to identify a dynamic price discrimination component. Consistent with agents forming expectations of future prices, we find higher prices during office hours (when business travelers are likely to buy tickets) and lower prices in the evening (when leisure travelers are more likely to purchase). As the proportion of business travelers increases closer to departure, both price dispersion and price discrimination become larger. We also find that price discrimination is more pronounced for low cost carriers than for legacy carriers. |
| Keywords: | Pricing, Price discrimination, Price dispersion, Airlines |
| JEL: | C23 D40 L93 |
| Date: | 2018–05–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88078&r=com |
| By: | Ohnishi, Kazuhiro |
| Abstract: | This paper investigates three sequential-move games with a capitalist firm, a labour-managed firm and a state-owned firm. The first game is as follows. In stage one, the capitalist firm chooses its output level. In stage two, the other firms choose their output levels simultaneously and independently. In stage three, the market opens and all firms sell their outputs. The structures of the second and third games are nearly identical and differ only in order in which the firms choose output levels in the first two stages. The paper discusses the equilibrium outcomes of the three sequential-move games. |
| Keywords: | Stackelberg games; Capitalist firm; Labour-managed firm; State-owned firm |
| JEL: | C72 D21 L30 |
| Date: | 2018–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88222&r=com |
| By: | Grashuis, Jasper; Elliott, Matt |
| Keywords: | Financial Economics, Institutional and Behavioral Economics |
| Date: | 2017–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ncer17:265443&r=com |
| By: | Ohnishi, Kazuhiro |
| Abstract: | This paper investigates a mixed duopoly model in which there is a state-owned firm competing with a foreign joint-stock firm. The following situation is considered. In the first period, each firm non-cooperatively decides how many it sells in the current market. In addition, each firm can hold inventory for the second-period market. By holding large inventory, a firm may be able to commit to large sales in the next period. In the second period, each firm non-cooperatively chooses its second-period output. At the end of the second period, each firm sells its first-period inventory and its second-period output and holds no inventory. The paper traces out the firms’ reaction functions in the mixed duopoly model. |
| Keywords: | Inventory holding, state-owned firm, foreign joint-stock firm, reaction curves |
| JEL: | C72 D43 F23 L30 |
| Date: | 2018–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88223&r=com |
| By: | Héctor Gustavo González Padilla |
| Abstract: | En este trabajo se analiza la estructura y el grado de competencia en el mercado de préstamos bancarios de Argentina en el período 2006 – 2011. Para evaluar el grado de competencia se utilizó el modelo de Panzer-Rose y se diferenció entre bancos privados y públicos. Los resultados indican que tantos los bancos privados como los públicos desempeñan sus actividades en un marco de competencia monopolista. |
| Keywords: | competition, banking industry, Panzer-Rose model, market structure. |
| JEL: | C52 G21 L11 I13 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:636&r=com |
| By: | Michael Chernew; Zack Cooper; Eugene Larsen-Hallock; Fiona Scott Morton |
| Abstract: | We study how individuals with private health insurance choose providers for lower-limb MRI scans. Lower-limb MRI scans are a fairly undifferentiated service and providers' prices routinely vary by a factor of five or more across providers within hospital referral regions. We observe that despite significant out-of-pocket cost exposure, patients often received care in high-priced locations when lower priced options were available. Fewer than 1 percent of individuals used a price transparency tool to search for the price of their services in advance of care. The choice of provider is such that, on average, individuals bypassed 6 lower-priced providers between their home and the location where they received their scan. Referring physicians heavily influence where their patients receive care. The influence of referring physicians is dramatically greater than the effect of patient cost-sharing. As a result, in order to lower out-of-pocket costs and reduce total MRI spending, patients must diverge from the established referral pathways of their referring physicians. We also observe that patients with vertically integrated (i.e. hospital-owned) referring physicians are more likely to have hospital-based (and more costly) MRI scans. |
| JEL: | I1 I11 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24869&r=com |
| By: | de-Ramon, Sebastian (Bank of England); Francis, William (Bank of England); Straughan, Michael (Bank of England) |
| Abstract: | This paper examines the effects of competition on bank stability in the United Kingdom between 1994 and 2013. We construct several measures of competition and test the relationship between competition and bank stability. We find that, on average, competition lowers stability, but that its effect varies across banks depending on the underlying financial health of the institution. Competition encourages relatively less sound banks (closer to insolvency) to reduce costs, lower portfolio risk and increase capital ratios, strengthening their stability, while it lowers the incentives of relatively more sound banks (farther from insolvency) to build capital ratios, weakening their stability. These findings imply trade-offs at the bank-level that may need to be weighed when evaluating policies with consequences for competition. |
| Keywords: | Bank competition; bank stability; Boone indicator; Lerner index. |
| JEL: | G21 G28 L22 |
| Date: | 2018–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0748&r=com |
| By: | Goretzki, Philipp; Perekhozhuk, Oleksandr; Glauben, Thomas; Loy, Jens-Peter |
| Abstract: | This study presents empirical evidence for the behaviour of Russian exporters in the international fertiliser market. Russia is in the spotlight since the potash cartel has collapsed. In 2012, Russia became the world’s second-largest exporter increasing its potash exports from 1996 to 2012 more than two times. PTM approach developed by Krugman (1986, 1987) is chosen to test the market behaviour. Imperfect competition in the Russian export market for nitrogen fertilisers is revealed in two-thirds of the destination countries under study. In the export market for potash, a sufficiently perfect market is found in only one out of 9 countries. |
| Keywords: | Industrial Organization |
| Date: | 2017–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae17:261173&r=com |
| By: | Oksana Loginova (University of Missouri) |
| Abstract: | This paper studies the impact of competition on the benefits of advance selling. I construct a two-period price-setting game with two firms that produce different brands serving heterogeneous consumers. Some consumers prefer one brand, others prefer the other brand. Consumers derive common value from their preferred brand, but they differ in how strongly they dislike their less preferred brand. One of the firms can offer consumers the opportunity to pre-order its product in advance of the regular selling season. I calculate the benefits of advance selling when this firm faces competition from the other firm in the regular selling season and when it does not. Competition is shown to enhance the benefits of advance selling when in the advance selling season consumers are uncertain about which brand they will prefer. Comparative statics analysis with respect to brand substitutability reveal some interesting results. |
| Keywords: | advance selling, price competition, strategic consumers, valuation uncertainty, consumer heterogeneity, substitutability of brands |
| JEL: | C72 D42 D43 L12 L13 M31 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1812&r=com |
| By: | David Argente (University of Chicago); Munseob Lee (University of California San Diego); Sara Moreira (Northwestern University) |
| Abstract: | We exploit detailed product- and firm-level data to study the size of firms and products over their life cycles. We build a dataset that contains information on the product portfolio of each firm in the consumer goods sector over the period 2006-2015. We document that, with the exception of the first few quarters, sales of products decline at a steady pace throughout most of their life cycle. These dynamics are robust across very heterogenous types of products, and contrast with the profile of firms, which grow throughout most of their life cycle. Motivated by these results, we create a statistical framework of firm growth as a function of the vintages of products. Using this decomposition we quantify, for young and mature firms, the importance of new product introduction (both the intensive and extensive margins) and the impact of decreasing sales of older vintages. We find that firms must grow by continuously adding products that generate sufficiently large revenue in order to compensate the reduction in revenue accruing from previous vintages of products. We structurally estimate a model of heterogeneous multiproduct firms and decompose sales over the life cycle of the product to understand the mechanisms behind their decline. Our results indicate that demand-side factors are behind the decline in sales of products and are consistent with preferences for newer vintages of products. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:1174&r=com |
| By: | Ageev, Petr; Pankratova, Yaroslavna; Tarashnina, Svetlana |
| Abstract: | In Contributions to game theory and management, vol. XI. Collected papers presented on the Eleventh International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. - SPb.: Saint Petersburg State University, 2018. - 330 p. |
| Keywords: | telecommunications market, non-zero sum game, multistage game, subgame perfect equilibrium, |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10472&r=com |
| By: | Shi, Lihong; Petrosian, Ovanes |
| Abstract: | In Contributions to game theory and management, vol. XI. Collected papers presented on the Eleventh International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. - SPb.: Saint Petersburg State University, 2018. - 330 p. The collection contains papers accepted for the Eleventh International Game Theory and Management (June 28-30, 2017, St. Petersburg State University, St. Petersburg, Russia). |
| Keywords: | Advertising competition, Optimal control, Dynamic programming, Time onsistency, |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10482&r=com |
| By: | Berezinets, Irina; Lonyagina, Yulia; Nikolchenko, Natalia; Zenkevich, Ekaterina |
| Abstract: | In Contributions to game theory and management, vol. XI. Collected papers presented on the Eleventh International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. - SPb.: Saint Petersburg State University, 2018. - 330 p. The collection contains papers accepted for the Eleventh International Game Theory and Management (June 28-30, 2017, St. Petersburg State University, St. Petersburg, Russia). |
| Keywords: | supply chain management, coordination, perfect Nash equilibrium, maximum flow problem, distribution network, |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10473&r=com |
| By: | Lonyagina, Yulia; Nikolchenko, Natalia; Zenkevich, Nikolay |
| Abstract: | In Contributions to game theory and management, vol. XI. Collected papers presented on the Eleventh International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. - SPb.: Saint Petersburg State University, 2018. - 330 p. The collection contains papers accepted for the Eleventh International Game Theory and Management (June 28-30, 2017, St. Petersburg State University, St. Petersburg, Russia). |
| Keywords: | distribution network, competitive and cooperative decisions, multi-stage hierarchical game, perfect Nash equilibrium, weighted Nash bargaining solution, |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10477&r=com |
| By: | Lozovanu, Dmitrii; Pickl, Stefan |
| Abstract: | In Contributions to game theory and management, vol. XI. Collected papers presented on the Eleventh International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. - SPb.: Saint Petersburg State University, 2018. - 330 p. The collection contains papers accepted for the Eleventh International Game Theory and Management (June 28-30, 2017, St. Petersburg State University, St. Petersburg, Russia). |
| Keywords: | mean payoff game, pure stationary strategy, mixed stationary strategy, Nash equilibria, |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10478&r=com |
| By: | Elnova, Maria; Smirnova, Nadezhda |
| Abstract: | In Contributions to game theory and management, vol. XI. Collected papers presented on the Eleventh International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. - SPb.: Saint Petersburg State University, 2018. - 330 p. The collection contains papers accepted for the Eleventh International Game Theory and Management (June 28-30, 2017, St. Petersburg State University, St. Petersburg, Russia). |
| Keywords: | cooperative game theory, logistics, horizontal cooperation, cost allocation, Shapley value, nucleolus, SM-nucleolus, anti-prenucleolus, blocking power, |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10474&r=com |