nep-com New Economics Papers
on Industrial Competition
Issue of 2020‒02‒24
24 papers chosen by
Russell Pittman
United States Department of Justice

  1. Pricing and Fees in Auction Platforms with Two-Sided Entry By Marleen Marra
  2. Intertemporal Price Discrimination in Sequential Quantity-Price Games By James D. Dana Jr.; Kevin R. Williams
  3. Spatial competition with unit-demand functions By Fournier, Gaëtan; Van Der Straeten, Karine; Weibull, Jörgen W.
  4. Recurrent Preemption Games By Hitoshi Matsushima
  5. Switching Costs, Brand Premia and Behavioral Pricing in the Pharmaceutical Market By Janssen, Aljoscha
  6. The Impact of size and group affiliation in emerging markets: A Cost efficiency analysis of Indian firms By Ramesh Jangili
  7. Competition in Network Industries: Evidence from the Rwandan Mobile Phone Network By Daniel Bjorkegren
  8. A Spatial Model of Bank Branches in Canada By Heng Chen; Matthew Strathearn
  9. Productivity Dynamics: The Role Of Competition In A Service Industry. By Thomas Breda; Alex Bryson; John Forth
  10. Is intertemporal price discrimination the cause of price dispersion in markets with low search costs? By Lindgren, Charlie; Daunfeldt, Sven-Olov; Rudholm, Niklas; Yella, Siril
  11. Product Market Competition, Productivity, and Jobs : The Case of South Africa By Dauda,Seidu; Nyman,Sara; Cassim,Aalia
  12. Comments on the DOJ/FTC Draft Vertical Merger Guidelines By Nicholas Economides; John Kwoka; Thomas Philippon; Hal Singer; Lawrence J. White
  13. The effects of price transparency in OTC equity lending markets: Evidence from a loan fee benchmark By Cereda, Fábio Saia; Chague, Fernando; De-Losso, Rodrigo; Genaro, Alan; Giovannetti, Bruno Cara
  14. Good-Looking Prices By Bradley J. Ruffle; Arie Sherman; Zeev Shtudiner
  15. Trade Policy and Market Power : Firm-Level Evidence By Asprilla,Alan; Berman,Nicolas; Cadot,Olivier; Jaud,Melise
  16. Markups, Market Imperfections, and Trade Openness : Evidence from Ghana By Damoah,Kaku Attah
  17. Innovation Strategies and Productivity Growth in Developing Countries: Evidence from Pakistan By Wadho, Waqar; Chaudhry, Azam
  18. Effects of cluster policies on regional innovation networks: Evidence from France By Konan Alain N’Ghauran; Corinne Autant-Bernard
  19. Nash Smoothing on the Test Bench: Ha-Essential Equilibria By Papatya Duman; Walter Trockel
  20. Entry Barriers, Idiosyncratic Distortions, and the Firm-Size Distribution By Fattal Jaef,Roberto N.
  21. Making a Market: Infrastructure, Integration and the Rise of Innovation By Andersson, David; Berger, Thor; Prawitz, Erik
  22. Asymmetric price transmission along the food marketing chain: A focus on the recent price war. By Chouaib Jouf
  23. Horizontal and Vertical Integration of Health Care Providers: A Framework for Understanding Various Provider Organizational Structures By Jessica Heeringa; Anne Mutti; Michael F. Furukawa; Amanda Lechner; Kristin A. Maurer; Eugene Rich
  24. Cost Efficiency and Endogenous Regulatory Choices: Evidence from the Transport Industry in France By Joanna Piechucka

  1. By: Marleen Marra (Département d'économie)
    Abstract: This paper presents, solves, and estimates the first structural auction model with seller selection. This allows me to quantify network effects arising from endogenous bidder and seller entry into auction platforms, facilitating the estimation of theoretically ambiguous fee impacts by tracing them through the game. Relevant model primitives are identified from variation in second-highest bids and reserve prices. My estimator builds off the discrete choice literature to address the double nested fixed point characterization of the entry equilibrium. Using new wine auction data, I estimate that this platform’s revenues increase up to 60% when introducing a bidder discount and simultaneously increasing seller fees. More bidders enter when the platform is populated with lower-reserve setting sellers, driving up prices. Moreover, I show that meaningful antitrust damages can be estimated in a platform setting despite this two-sidedness.
    Keywords: Auctions with entry; Two-sided markets; Nonparametric identification; Estimation; Nested fixed point
    JEL: D44 C52 C57 L81
    Date: 2019–12
  2. By: James D. Dana Jr. (Northwestern University); Kevin R. Williams (Cowles Foundation, Yale University)
    Abstract: This paper develops an oligopoly model in which firms first choose capacity and then compete in prices in a series of advance-purchase markets. We show that when the elasticity of demand falls across periods, strong competitive forces prevent firms from utilizing intertemporal price discrimination. We then enrich the model by allowing firms to use inventory controls, or sales limits assigned to individual prices. We show that competing firms can profitably use inventory controls. Thus, although typically viewed as a tool to manage demand uncertainty, we show that inventory controls can also facilitate price discrimination in oligopoly.
    Keywords: Capacity-pricing games, Intertemporal price discrimination, Oligopoly models, Inventory controls
    JEL: D21 D43 L13
    Date: 2018–06
  3. By: Fournier, Gaëtan; Van Der Straeten, Karine; Weibull, Jörgen W.
    Abstract: This paper studies a spatial competition game between two firms that sell a homogeneous good at some pre-determined fixed price. A population of consumers is spread out over the real line, and the two firms simultaneously choose location in this same space. When buying from one of the firms, consumers incur the fixed price plus some transportation costs, which are increasing with their distance to the firm. Under the assumption that each consumer is ready to buy one unit of the good whatever the locations of the firms, firms converge to the median location: there is minimal differentiation. In this article, we relax this assumption and assume that there is an upper limit to the distance a consumer is ready to cover to buy the good. We show that the game always has at least one Nash equilibrium in pure strategy. Under this more general assumption, the "minimal differentiation" principle no longer holds in general. At equilibrium, firms choose "minimal", "intermediate" or "full" differentiation, depending on this critical distance a consumer is ready to cover and on the shape of the distribution of consumers' locations.
    Keywords: Spatial competition games; horizontal differentiation; willingness to pay
    Date: 2020–02
  4. By: Hitoshi Matsushima (Faculty of Economics, University of Tokyo)
    Abstract: I consider a new model of an infinitely repeated preemption game with random matching, termed the recurrent preemption game, wherein each player’s discount factor depends on whether she wins the current game. This model describes sequential strategic technology adoptions in which a company becomes outdated by failing to maintain a position at the forefront of innovation. Assuming incomplete information about the presence of a rival, I clarify how the prominence of the innovator’s dilemma influences the degree of excessive competition in preemption. I also reveal interesting properties demonstrated by the unique symmetric Nash equilibrium of the recurrent preemption game.
    Keywords: Recurrent Preemption Game, Strategic Technology Adoption, Innovator’s Dilemma, Unique Equilibrium, Random Technology
    JEL: C72 C73 L13 O30 O31
    Date: 2020–02
  5. By: Janssen, Aljoscha (Singapore Management University)
    Abstract: This article examines the market power of branded prescription drugs faced with generic competition. Using prescription-level and matched socioeconomic panel data of the entire Swedish population between 2010 and 2016, I provide evidence for the key role of switching costs. A discontinuity surrounding patent expirations establishes that the effect is causal. Further, by comparing patients with and without medical education, I show that those without medical education experience higher brand premia. A unique feature of the Swedish market allows me to rule out patients’ inattention due to information costs as a source of market power. Therefore, switching costs and perceived quality differences are the key determinants of market power. I then estimate a dynamic oligopoly model with forward-looking firms which is used in counterfactual studies of the effect of switching costs and perceived quality differences on prices. First, an increase in the length of procurement mimics a reduction of switching costs and increases prices. While the effect of switching costs on prices in theory is ambiguous, moderate switching costs and sufficient competition for new patients increase competitive pressure. Second, if everyone acts as a medical expert and experiences fewer brand premia, prices decrease.
    Keywords: Switching Costs; Brand Premia; Behavioral Pricing; Pharmaceuticals
    JEL: D12 I11 L13
    Date: 2020–02–12
  6. By: Ramesh Jangili (Indira Gandhi Institute of Development Research; Institute of Economic Growth)
    Abstract: Despite strengthening market discipline and improving overall competition, emerging markets, like India, still have severe information problems. Large firms and group firms in these markets have the potential to gain differential advantage as well as destroy value. We analyse the cost efficiency performance of firms in India: the degree of cost efficiency with respect to firm size and the cost efficiency of firms affiliated to business groups with that of standalone firms. We find that as firm size increases the degree of cost efficiency decreases and standalone firms exhibit better cost efficiency scores when compared with that of group affiliated firms. This supports the view that firms having either market power or involved in explicit or implicit form collusion incur higher costs. Alternatively, firms which do not have market power minimises the cost in a better way.
    Keywords: Cost Efficiency, Size, Group Affiliation, Stochastic Frontier Analysis
    JEL: L25 D24 M21
    Date: 2019–12
  7. By: Daniel Bjorkegren
    Abstract: This paper develops a method to analyze the effects of competition policy in a network industry. Competition has mixed effects on incentives to invest: when a network is split between competitors, each captures only a fraction of potential network effects. However, a firm may invest in components that are not shared, to attract customers to its network. I structurally estimate the utility of adopting a mobile phone from its subsequent usage, using transaction data from nearly the entire Rwandan network over 4.5 years. I simulate the equilibrium choices of consumers and network operators, and consider Rwanda’s decision to delay the introduction of competition. I show that there is a policy under which adding a competitor earlier would have reduced prices and increased incentives to invest in rural towers, increasing welfare by the equivalent of 1% of GDP. I analyze the effects of setting different interconnection rates, and reducing switching costs through number portability.
    Date: 2020
  8. By: Heng Chen; Matthew Strathearn
    Abstract: This research aims to empirically analyze the spatial distribution of bank-branch networks in Canada. We study the market structure (both industrial and geographic concentrations) within the networks’ own or adjacent postal areas. Our empirical framework considers branch density (the ratio of the total number of branches to the area size) by employing a spatial two-way fixed-effects model. Our main finding is that there are no effects associated with market structure; however, there are strong spatial socioeconomic effects from the networks' own and nearby areas. In addition, we also study the effect of spatial competition from rival banks: we find that large banks and small banks tend to avoid markets dominated by their competitors.
    Keywords: Firm dynamics; Market structure and pricing
    JEL: L1 R3
    Date: 2020–01
  9. By: Thomas Breda (Paris School of Economics); Alex Bryson (University College London, National Institute of Social and Economic Research and Institute for the Study of Labor); John Forth (Cass Business School, NIESR, IZA)
    Abstract: Using panel data for nearly all service providers in a single industry sector, we examine productivity responses to changes in competition in the United States. The sector offers workplace employee representation through trade union branches which compete with one another for union members whose subscriptions they depend on to cover costs. As such, they have an interest in maximising productivity. Ours is the first study to measure service industry productivity using both price and quantity metrics. Consistent with manufacturing studies, we find market entrants have lower prices and higher Total Factor Productivity (TFP) than incumbents. Increased competition from new entrants leads incumbents to reduce the price of union membership; exit rates then rise among incumbents with the lowest prices who are constrained in adjusting their prices downwards. Those with higher TFP have higher survival probabilities. However, increased competition does not induce incumbents to raise their TFP. These findings are consistent with a market in which incumbents learn about market conditions but face high switching costs limiting their ability to invest in the new techniques that underpin the higher TFP of new entrants.
    Keywords: competition; productivity; TFP; trade unions; survival
    JEL: J5 L1 L2 L3
    Date: 2019–12–01
  10. By: Lindgren, Charlie (Dalarna University); Daunfeldt, Sven-Olov (Institute of Retail Economics (Handelns Forskningsinstitut)); Rudholm, Niklas (Institute of Retail Economics (Handelns Forskningsinstitut)); Yella, Siril (Dalarna University)
    Abstract: Theories of intertemporal price discrimination imply that prices must be chosen using mixed strategies, with retailers changing their prices randomly over time. Otherwise, consumers will learn which retailer has the lowest price, and eventually, all customers will patronize the lowest price retailer, or all retailers will charge the same price. We test whether price dispersion is explained by intertemporal price discrimination strategies using a dataset of identical products sold through the PriceSpy price comparison website. Our results show that there are clusters of retailers with similar pricing within each cluster but different price levels between clusters even after controlling for retailer heterogeneity. Retailers also remain in the same price cluster over time, suggesting that consumers have ample opportunities to learn which retailers belong to which price cluster. Intertemporal price discrimination is thus unlikely to have caused the observed price dispersion.
    Keywords: Clustering; intertemporal price discrimination; online retailing; e-commerce; price comparison websites
    JEL: C38 D22 D83 L81
    Date: 2020–02–13
  11. By: Dauda,Seidu; Nyman,Sara; Cassim,Aalia
    Abstract: The degree of concentration and market power in South African markets has been the topic of much policy discussion. However, there has been little evidence on what drives market power and the impact of the degree of competition in South African markets on economic outcomes. This paper improves on previous markup estimates for South Africa using a methodology developed by De Loecker and Warzynski (2012) applied to tax administrative data for 2010?14. The paper then explores the firm-level determinants of the estimated markups and assesses the link between competition and firm-level outcomes, including productivity, employment, and wages. The analysis finds that average markups across the economy appear to have risen between 2010 and 2014. Larger firms, higher-intensity exporters, and firms with greater sales shares charge higher markups than comparator firms in South Africa, even after controlling for efficiency. Moreover, lower product market competition has a significant, negative effect on productivity growth, employment growth, and wage growth in South African manufacturing industries. Higher sales-weighted and value-added-weighted average industry-level markups are associated with lower industry-level entry rates. The findings highlight the importance of implementing sound pro-competition government interventions and the significant economic benefits associated with such policies.
    Date: 2019–12–17
  12. By: Nicholas Economides (Professor of Economics, NYU Stern School of Business, New York, New York 10012); John Kwoka (Neal F. Finnegan Distinguished Professor of Economics, College of Social Sciences and Humanities, Northeastern University); Thomas Philippon (Max L. Heine Professor of Finance, NYU Stern School of Business, New York, New York 10012); Hal Singer (Managing Director at Econ One, Adjunct Professor at Georgetown McDonough School of Business); Lawrence J. White (Robert Kavesh Professor of Economics, NYU Stern School of Business, New York, New York 10012)
    Abstract: We provide comments on the recent DOJ/FTC draft vertical merger guidelines
    Keywords: DOJ; FTC; Vertical Merger; Guidelines;
    JEL: L1 L4 L5 L9
    Date: 2020–02
  13. By: Cereda, Fábio Saia; Chague, Fernando; De-Losso, Rodrigo; Genaro, Alan; Giovannetti, Bruno Cara
    Abstract: We study the effects of a positive shock in price transparency in the Brazilian OTC equity lending market. Before March 1st 2011, a publicly available benchmark was computed as the average loan fee across all loan deals over the previous 15 trading days; on March 1st 2011, this interval was reduced from 15 to three days, increasing the benchmark precision and, consequentially, short-sellers' predictive power over current (unobserved) loan fees. Using difference-in-differences analysis, we show that this change resulted in lower loan fees, with stronger effects for short-sellers with higher search costs. Our results are consistent with the theoretical predictions in Duffie, Dworczak, and Zhu (2017) and can be of interest to regulators few countries have publicly available loan fee benchmarks.
    Date: 2020–02
  14. By: Bradley J. Ruffle; Arie Sherman; Zeev Shtudiner
    Abstract: We design a field experiment to test for price discrimination at seemingly highly competitive Israeli produce markets. We trained 90 buyers and sent them to produce markets across Israel. After verifying a product’s posted price, they asked for a discount on a one-kilogram or one-unit purchase. Vendors employ third-degree price discrimination: women are offered larger and more frequent discounts than men, and the more attractive the female buyer, the larger and more frequent the discount offered. Male buyers do not benefit from this beauty discount. No other buyer characteristic is a significant predictor of the likelihood or size of a discount. To understand our findings, we provide a more nuanced view of these markets that includes search costs and considerable vendor price-setting discretion.
    Keywords: experimental economics; beauty; price discrimination; negotiation; price discounts; search costs
    JEL: C91 D01
    Date: 2020–02
  15. By: Asprilla,Alan; Berman,Nicolas; Cadot,Olivier; Jaud,Melise
    Abstract: This paper identifies the effect of trade policy on market power through new data and a new identification strategy. It uses a large data set containing export values and quantities by product and destination for all exporting firms in 12 developing and emerging countries over several years, merged with destination-product-specific information on tariffs and non-tariff barriers. Market power is identified by observing how exporting firms price discriminate across markets in reaction to variations in bilateral exchange rates. Pricing-to-market is prevalent in all regions of the sample, even among small firms, although it is increasing in firm size, in accordance with theory. More importantly, the effect of non-tariff measures is not isomorphic to that of tariffs: the observed pricing-to-market behavior suggests that, although tariffs reduce the market power of foreign firms through classic rent-shifting effects, non-tariff measures alter market structure and reinforce the market power of non-exiting firms, domestic and foreign ones alike.
    Date: 2019–10–29
  16. By: Damoah,Kaku Attah
    Abstract: This paper investigates the impact of Ghana's World Trade Organization (WTO) accession on firm-level product and labor market imperfections. The paper exploits a rich dataset of firm-level information to estimate both markups and the degree of monopsony power enjoyed by manufacturing firms. The results indicate that price-cost margins declined while the degree of monopsony power increased in the wake of WTO accession. These diverging dynamics suggest that firms compress real wages to offset loss of market power in the product market due to increased international competition. This gives rise to an increase in the market imperfection gap, which gradually erodes the pro-competitive gains from trade. The paper contributes to the literature by identifying channels through which allocative inefficiencies and misallocation can persist even after trade liberalization.
    Keywords: International Trade and Trade Rules,Rural Labor Markets,Labor Markets,Common Carriers Industry,Food&Beverage Industry,Construction Industry,Business Cycles and Stabilization Policies,Plastics&Rubber Industry,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,General Manufacturing,Trade Policy,Trade and Multilateral Issues,Rules of Origin
    Date: 2019–12–11
  17. By: Wadho, Waqar; Chaudhry, Azam
    Abstract: We examine the determinants of product, process, and organizational innovation, and their impact on firm labor productivity using data from a unique innovation survey of firms in Pakistan. We find significant heterogeneity in the impact of different innovations on labor productivity: Organizational innovation has the largest effect followed by process innovation. But unlike much of the literature, we found a negative impact of product innovation suggesting a disruption effect of new products; however, this is mitigated if new products are paired with process or organizational innovations. We find a strong impact of engaging in knowledge creation on product and process innovation. We found that external knowledge networks and innovation cooperation play no significant role in firms’ decision to perform R&D and its intensity, though vertical linkages with suppliers (clients) promote product (process) innovations. Foreign competition has a negative effect on product innovation and a positive effect on organizational innovation.
    Keywords: Technological Innovation,organizational innovation,labor productivity,developing countries,Labor intensive industries
    JEL: O31 O32 L25 L67 C31 C24 D22
    Date: 2020
  18. By: Konan Alain N’Ghauran (Univ Lyon, UJM Saint-Etienne, CNRS, GATE L-SE UMR 5824, F-42023 Saint-Etienne, France); Corinne Autant-Bernard (Univ Lyon, UJM Saint-Etienne, CNRS, GATE L-SE UMR 5824, F-42023 Saint-Etienne, France)
    Abstract: Despite the growing body of literature evaluating cluster policies, it still remains difficult to establish conclusively their structural effects on regional innovation networks. Focusing on the French cluster policy during the period 2005-2010, this study aims at evaluating how cluster policies influence the structure of local innovation networks following network topologies that may be beneficial for regional innovation. Based on a panel data of four periods and 94 NUTS3 French regions, we estimate spatial Durbin models, allowing us to identify direct, indirect and total effects of cluster policies. The results suggest that cluster policies can result in both positive and negative total effects on the structure of local innovation networks depending on regions’ technological specialisation. Beyond the heterogeneous effects, the results also highlight that cluster policies may lead to a regional competition for the strengthening of innovation networks. This finding echoed previous research pointing out the possible "beggar-thy-neighbour" effects of cluster policies.
    Keywords: Cluster, Regional innovation, Innovation network, Policy evaluation
    JEL: L52 O33 R58
    Date: 2020
  19. By: Papatya Duman (Paderborn University); Walter Trockel (Bielefeld University)
    Abstract: We extend the analysis of van Damme (1987, Section 7.5) of the famous smoothing demand in Nash (1953) as an argument for the singular stability of the symmetric Nash bargaining solution among all Pareto ecient equilibria of the Nash demand game. Van Damme's analysis provides a clean mathematical framework where he substantiates Nash's conjecture by two fundamental theorems in which he proves that the Nash solution is among all Nash equilibria of the Nash demand game the only one that is H{essential. We show by generalizing this analysis that for any asymmetric Nash bargaining solution a similar stability property can be established that we call H {essentiality. A special case of our result for a = 1=2 is H1/2-essentiality that coincides with van Damme's H{essentiality. Our analysis deprives the symmetric Nash solution equilibrium of Nash's demand game of its exposed position and fortifies our conviction that, in contrast to the predominant view in the related literature, the only structural di erence between the asymmetric Nash solutions and the symmetric one is that the latter one is symmetric.
    Keywords: 2-person bargaining games, {symmetric Nash solution, Nash demand game, Nash smoothing of games, H {essential Nash equilibrium
    JEL: B16 C71 C72 C78 D5
    Date: 2020–02
  20. By: Fattal Jaef,Roberto N.
    Abstract: This paper studies the interaction between entry barriers and idiosyncratic distortions in the context of a standard model of firm dynamics. It derives a strategy to infer entry barriers based on the combination of cross-country data on average firm size, cross-country estimates of idiosyncratic distortions, and equilibrium conditions of the theory. It finds sizable entry barriers that correlate positively with income per-capita. The TFP gains from complete reversals of distortions range between 20 and 50 percent. Idiosyncratic distortions are most distortive in low income countries whereas entry barriers are relatively more detrimental in advanced economies. The study also finds that distortions tend to mitigate each other's negative effect on TFP.
    Date: 2019–09–27
  21. By: Andersson, David (Uppsala University); Berger, Thor (Research Institute of Industrial Economics (IFN)); Prawitz, Erik (Research Institute of Industrial Economics (IFN))
    Abstract: We exploit exogenous variation arising from the historical rollout of the Swedish railroad network across municipalities to identify the impacts of lowered interaction costs on innovative activity. A network connection led to a surge in local innovation due to an increased entry, productivity, and specialization of independent inventors. As the railroad network expanded, it further led to the emergence of a national market for ideas: inventors in connected areas began to develop ideas with applications outside the local economy, which were subsequently sold to firms along the network. Our findings suggest that the reduced interaction cost between firms, intermediaries, and inventors was a key driver of the historical emergence of a market for ideas.
    Keywords: Technological Change; Infrastructure; Innovation
    JEL: N70 O30 O33
    Date: 2020–02–18
  22. By: Chouaib Jouf
    Abstract: This paper investigates the price transmission along the food marketing chain in France. We focus on this transmission at the upstream and downstream levels during the so-called "price war" waged by the retailers in the French market. To this aim, we rely on an asymmetric cointegration approach: the Nonlinear Autoregressive Distributed Lag (NARDL) model. We find that although the asymmetric price transmission is effective along the French food marketing chain, it is more pronounced at the downstream level, illustrating that agri-food companies are the main losers of the recent war price in the food sector.
    Keywords: Food sector, Price transmission, Asymmetry, Nonlinear ARDL model
    JEL: C13 C22 Q11 Q13
    Date: 2020
  23. By: Jessica Heeringa; Anne Mutti; Michael F. Furukawa; Amanda Lechner; Kristin A. Maurer; Eugene Rich
    Abstract: Current U.S. policy and payment initiatives aim to encourage health care provider accountability for population health and higher value care, resulting in efforts to integrate providers along the continuum.
    Keywords: vertical integration, horizontal integration, health systems, integrated care
  24. By: Joanna Piechucka
    Abstract: We study the impact of different regulatory designs on the cost efficiency of operators providing a public service, exploiting data from the French transport industry. The distinctive feature of the study is that it considers regulatory regimes as endogenously determined choices, explained by economic, political, and institutional variables. Our approach leans on a positive analysis to study the determinants of regulatory contract choices, which, in turn, affect the costs of operating urban public transport. Our results show that given similar network characteristics, networks operated under fixed-price contracts exert lower costs than those regulated under cost-plus contracts. This finding is in line with the theoretical prediction of new regulatory economics that fixed-price contracts provide more incentives for efficiency. Importantly, ignoring the endogeneity of contractual choices would lead to significantly underestimating the impact of contract type on cost efficiency. Our findings provide useful policy implications suggesting that the move toward more high-powered incentive schemes is indeed associated with significant cost efficiencies. Moreover, they highlights the importance of accounting for the endogeneity of regulatory contract choices.
    Keywords: Cost-efficiency; Endogenous contract choices; Transport industry
    JEL: L51 L92
    Date: 2020

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