nep-com New Economics Papers
on Industrial Competition
Issue of 2021‒04‒26
27 papers chosen by
Russell Pittman
United States Department of Justice

  1. Common Ownership of Competing Firms: Evidence from Australia By Andrew Leigh; Adam Triggs
  2. Costlier switching strengthens competition even without advertising By Sander Heinsalu
  3. Competition, Mergers, and R&D Diversity By Gilbert, RJ
  4. Collusion in Supply Functions under Technology Licensing By Celen, Ihsan; Saglam, Ismail
  5. Licensing Cost-Reducing Innovations Under Supply Function Competition By Saglam, Ismail
  6. Optimal Pricing, Private Information and Search for an Outside Offer By Sarah Auster; Nenad Kos; Salvatore Piccolo
  7. Transactional fairness and pricing practices in consumer markets By Bruce Lyons; Robert Sugden
  8. Optimal Retail Contracts With Return Policies By Ying-Ju Chen; Zhengqing Gui; Ernst-Ludwig von Thadden; Xiaojian Zhao
  9. Myopic Oligopoly Pricing By Iwan Bos; Marco A. Marini; Riccardo D. Saulle
  10. Pioneer, Early Follower or Late Entrant: Entry Dynamics with Learning and Market Competition By Chia-Hui Chen; Junichiro Ishida; Arijit Mukherjee
  11. Competition Policy in Banking in the European Union By Laser, Falk Hendrik
  12. The economics of potential price gouging during Covid-19 and the application to complaints received by the CMA By San Sau Fung; Simon Roberts
  13. Financial Conditions, Local Competition, and Local Market Leaders: The Case of Real Estate Developers By Fan, Ying; Leung, Charles Ka Yui; Yang, Zan
  14. Colluding Against Environmental Regulation By Ale-Chilet, Jorge; Chen, Cuicui; Li, Jing; Reynaert, Mathias
  15. Market Concentration and Incentives to Collude in Cournot Oligopoly Experiments By Nobuyuki Hanaki; Aidas Masiliunas
  16. Regulation and competition in the taxi industry in Vancouver By Monteiro, Joseph; Prentice, Barry E.
  17. Does Common Ownership Influence the Financial Strategy of the French Pharmaceutical Firms? By Antonio Estache; Christophe Kieffer
  18. Competition and Regulatory Challenges in Digital Markets: How to Tackle the Issue of Self-Preferencing? By Frédéric Marty
  19. The “Matthew Effect” and Market Concentration:Search Complementarities and Monopsony Power By Jesús Fernández-Villaverde; Federico Mandelman; Yang Yu; Francesco Zanetti
  20. Cooperation and Competition in Linear Production and Sequencing Processes By van Beek, Andries; Malmberg, Benjamin; Borm, Peter; Quant, Marieke; Schouten, Jop
  21. The Welfare Effect of a Consumer Subsidy with Price Ceilings: The Case of Chinese Cell Phones By Ying Fan; Ge Zhang
  22. M-Payments, Financial Inclusion, and Full Market Coverage By Vladimir A. Karamychev; Jean-Marie Viaene
  23. Pratiques anticoncurrentielles algorithmiques : une revue de littérature By Frédéric Marty
  24. Quantifying Brand Loyalty: Evidence from the Cigarette Market By Philip DeCicca; Donald S. Kenkel; Feng Liu; Jason Somerville
  25. Credit Rating Levels and Acquisitions: The European Evidence By Magnus Blomkvist; Johannes Kortekangas; Hitesh Vyas
  26. Distressed Acquisitions Evidence from European Emerging Markets By Iwasaki, Ichiro; Kočenda, Evžen; Shida, Yoshisada
  27. Competencia en precios y confusión del consumidor en el comercio electrónico: un estudio empírico By Elizabeth Pasteris; Gianina Mattioli

  1. By: Andrew Leigh; Adam Triggs
    Abstract: We provide the first estimates of the extent of common ownership of competing firms in Australia. Combining data on market shares and substantial shareholdings, we calculate the impact of common ownership on effective market concentration. Among firms where we can identify at least one owner, 31 percent share a substantial owner with a rival company. Analysing 443 industries, we identify 49 that exhibit common ownership, including commercial banking, explosives manufacturing, fuel retailing, insurance and iron ore mining. Across the Australian economy, common ownership increases effective market concentration by 21 percent. Our estimates imply that if listed firms seek to maximise the value of their investors’ portfolios, then they place the same value on $3.70 of their competitors’ profits as on $1 of their own profits. We discuss the limitations of the available data, and the potential implications of common ownership for competition in Australia.
    Keywords: horizontal shareholding, market concentration, Herfindahl-Hirschman Index, Modified Herfindahl-Hirschman Index, antitrust, competition
    JEL: L11 L12 D42 D43
    Date: 2021
  2. By: Sander Heinsalu
    Abstract: Consumers only discover at the first seller which product best fits their needs, then check its price online, then decide on buying. Switching sellers is costly. Equilibrium prices fall in the switching cost, eventually to the monopoly level, despite the exit of lower-value consumers when changing sellers becomes costlier. More expensive switching makes some buyers exit the market, leaving fewer inframarginal buyers to the sellers. Marginal buyers may change in either direction, so for a range of parameters, all firms cut prices.
    Date: 2021–04
  3. By: Gilbert, RJ
    Abstract: This paper describes a model of research and development (R&D) investment in which firms can choose any number of R&D projects that have independent and identical probabilities of success. The measure of R&D diversity is the number of projects that are undertaken by the industry. Absent spillovers or profits at risk from innovation, mergers often—but not always—decrease R&D diversity; however, the incremental effects decline rapidly with the number of industry rivals. Mergers can have significant adverse effects if the merging firms have large profits that are at risk from an innovation. A merger can promote investment in R&D and increase expected consumer surplus if discoveries have sufficiently large information spillovers.
    Keywords: Competition, Innovation, Oligopoly, Mergers, Research and development, Economics, Applied Economics
    Date: 2019–05–15
  4. By: Celen, Ihsan; Saglam, Ismail
    Abstract: We consider an infinitely-lived duopoly with asymmetric costs and study the incentives of the firms to collude or compete in supply functions under the possibility of technology licensing. Simulating the subgame-perfect Nash equilibria of alternative industry organizations, we show that licensing makes collusion harder; but it always has a positive effect on the welfares of consumers and the less efficient firm in the duopoly.
    Keywords: Duopoly; collusion; supply function equilibrium; licensing.
    JEL: D43 L13 O30
    Date: 2021–04–19
  5. By: Saglam, Ismail
    Abstract: In this paper, we study the problem of licensing cost-reducing innovations in a duopoly under supply function competition. We show that the innovator prefers fixed-fee licensing to no licensing if its cost advantage is not extremely large. Moreover, if its cost advantage is not extremely small, the innovator prefers fixed-fee licensing to royalty licensing, as well.
    Keywords: Duopoly; licensing; supply function competition.
    JEL: D43 L13 O30
    Date: 2021–04–20
  6. By: Sarah Auster (University of Bonn); Nenad Kos (Bocconi University, Department of Economics, CEPR and IGIER); Salvatore Piccolo (University of Bergamo)
    Abstract: A buyer can either buy a good at a local monopolist or search for it in the market at a market price. The more intensely the buyer searches, the more likely he will find the good in the market, whereas if his search fails, he can still buy it from the local monopolist. We show that a buyer with a higher willingness to pay searches (weakly) more intensely. This skews the distribution of types buying at the local monopolist towards lower valuations and exerts pressure on the local monopolist to reduce his price. Despite this effect, offering the monopoly price remains weakly optimal in equilibrium: depending on the parameters, the local monopolist either chooses the monopoly price with probability one or he randomizes over a set of prices with the monopoly price as the upper bound of the support. Interestingly, a higher market price can make it more likely that the local monopolist prices below the monopoly level.
    Keywords: Optimal Pricing, Search
    JEL: D82
    Date: 2021–04
  7. By: Bruce Lyons (Centre for Competition Policy and School of Economics, University of East Anglia); Robert Sugden (Centre for Competition Policy and School of Economics, University of East Anglia)
    Abstract: There is growing public concern about the ‘unfairness’ of many pricing practices that have become common in consumer, particularly digital, markets. Industrial and behavioural economists have developed theories that explain the conditions under which these practices are profitable for firms, and their implications for consumer welfare. We identify a mismatch between the welfare economic principles used in this theoretical work and the normative perspective in which these practices are viewed as unfair. We develop a concept of ‘transactional fairness’, grounded in the normative approach of Sugden’s Community of Advantage, that is reflective of public concerns. Transactional fairness is complementary to established criteria of economic efficiency and distributional equity, but is based entirely on the relationship between individual buyer and seller. It establishes clear principles with realistic information requirements that are appropriate for compliance by firms. Regulation based on this approach can help to restore public faith in markets.
    Keywords: Price discrimination, unfair pricing, consumer law, competition policy
    JEL: D61 D63 K21 K23 L40 L51
    Date: 2021–01–28
  8. By: Ying-Ju Chen; Zhengqing Gui; Ernst-Ludwig von Thadden; Xiaojian Zhao
    Abstract: A central problem in vertical relationships is to minimize the mismatch between supply and demand. This paper studies a problem of contracting between a manufacturer and a retailer who privately observes the retail demand materialized after the contracting stage. Cash payments are bounded above by the retailer’s revenue, while the return of unsold inventories is bounded above by the order quantity net of the actual quantity sold. While the majority of the papers in the literature takes the contractual forms as given and investigates the consequences that these contracts may lead to in various contexts, without assuming any functional form of contracts, we show that the optimal contract can be implemented by a buy-back contract: the manufacturer requests an upfront payment from the retailer and buys back the unsold inventories at the retailer’s salvage value. The optimality of buy-back contracts is robust to several scenarios including competition between retailers.
    Keywords: Retail contracts, return policies, buy-back contracts, incentive problems, limited liability
    JEL: D82 D86 L42 L60
    Date: 2021–04
  9. By: Iwan Bos (Department of Organisation, Strategy and Entrepreneurship, Maastricht University); Marco A. Marini (Department of Social Sciences and Economics, Sapienza University of Rome); Riccardo D. Saulle (Department of Economics and Management, University of Padova)
    Abstract: This paper examines capacity-constrained oligopoly pricing with sellers who seek myopic improvements. We employ the Myopic Stable Set stability concept and establish the existence of a unique pure-strategy price solution for any given level of capacity. This solution is shown to coincide with the set of pure-strategy Nash equilibria when capacities are large or small. For an intermediate range of capacities, it predicts a price interval that includes the mixed-strategy support. This stability concept thus encompasses all Nash equilibria and offers a pure-strategy solution when there is none in Nash terms. In particular, it provides a behavioral rationale for different types of pricing dynamics, including real-world economic phenomena such as Edgeworth-like price cycles, price dispersion and supply shortages.
    Keywords: Behavioral IO, Bounded Rationality, Capacity Constraints, Oligopoly Pricing, Myopic Stable Set.
    JEL: C72 D43 L13
    Date: 2021–04
  10. By: Chia-Hui Chen; Junichiro Ishida; Arijit Mukherjee
    Abstract: Timing of market entry is one of the most important strategic decisions a firm must make, but its decision process becomes convoluted with information and payoff spillovers. The threat of competition pushes firms to enter earlier to preempt their rivals while the possibility of learning make them cautiously wait for others to take action. This combination amounts to a new class of timing games where first-mover advantage first emerges as in preemption games but second-mover advantage later prevails as in wars of attrition. Our model identifies under what conditions a firm becomes a pioneer, early follower or late entrant and shows that the timing of entry is excessively early (late) when there emerges a late entrant (early follower). We also argue that consumer inertia is often efficiency-enhancing in this environment, highlighting an elusive link between static market competition and dynamic entry competition.
    Date: 2021–04
  11. By: Laser, Falk Hendrik
    Abstract: In this doctoral thesis, I am assessing competition trends in the banking sector in the European Union. In recent years, market power and market concentration have increased in the European banking markets. I argue that competition policy needs to play a strong role to protect economic prosperity in the European Union. The doctoral thesis contains three chapters covering the main instruments of European competition policy: antitrust, merger control and state aid control. In the first chapter, I analyze the effects on retail interest rates of the merger between ABN AMRO and Fortis Bank NL in the Dutch banking market. Using a structural model, I simulate decreases in interest rates of up to 30 basis points for the merging banks. Depending on the measure for the change in consumer welfare, the model suggests that the merger caused annual losses of up to 50 euros for customers of the merging banks and between two and seven euros for the average consumer. Accounting for efficiency gains partially offsets the anti-competitive effects for consumers. In the second chapter, I quantify the potential effects of common ownership on retail interest rates in the Dutch banking market. Using a structural model combining ownership data and survey data on consumers' choice of savings accounts, I simulate interest rates under different assumptions on common ownership. Conditional on a common ownership mechanism, I simulate substantial decreases in interest rates of up to 50 basis points. These results suggest that antitrust authorities should cautiously observe trends in common ownership and assess its potential anti-competitive effects on consumers. In the third chapter, I investigate the impact of bank bailout during the financial crisis on competition in the European Union. Combining information on individual bank rescues with bank-level measures of market power, I find a substantial decrease of six percentage points in the Lerner index for rescued banks. The estimated effects are heterogeneous and only driven by banks rescued in the first two years of the financial crisis before the European sovereign debt crisis started in 2010. This finding casts a positive light on state aid control in the European Union as beneficiaries of state aid did not abuse public funds to distort competition in their favor. Protecting competition in banking remains a pertinent task in light of possible further public interventions triggered by the ongoing COVID-19 pandemic.
    Date: 2021
  12. By: San Sau Fung (Competition and Markets Authority (CMA)); Simon Roberts (Centre for Competition, Regulation and Economic Development (CCRED), University of Johannesburg Centre for Competition Policy, University of East Anglia)
    Abstract: The CMA received a large number of complaints about price hikes during Covid-19. In this paper, we first review the economic framework of price gouging and identify the situations when intervention by competition authorities is justified. We then analyse the CMA’s consumer complaints data. We find that most complaints related to essential products sold by small local retailers, including many that operate in some of the most deprived areas of the UK, and their price hikes were particularly likely to harm vulnerable consumers. We also explain the CMA’s antitrust investigations into the pricing of hand sanitisers by retailers. This product, essential for reducing Covid-19 transmission, saw substantial and sustained price increases around March to June 2020. We conclude by discussing the merits of, and challenges for, competition authorities in responding to price gouging concerns and in playing a market observatory role more generally.
    Date: 2021–01–01
  13. By: Fan, Ying (Hong Kong Polytechnic University); Leung, Charles Ka Yui (City University of Hong Kong); Yang, Zan (Tsinghua University)
    Abstract: This paper studies whether (and how) corporate decisions are affected by internal factors (such as the financial conditions of own company) and external factors (such as the actions of local competitors) in an imperfectly competitive environment. We study the listed real estate developers in Beijing as a case study. Our hand-collected dataset includes transaction-level information booked indicators (such as profitability, liability, and liquidity) and un-booked financial indicators (political connections). Our multi-step empirical model shows that both the firm's financial conditions and her competitors' counterparts are essential but play different roles in the output design, pricing, and the time-on-the-market (TOM). Internal versus external factors' relative importance relates to the degrees of market concentration in a nonlinear manner. Local market leaders' existence alters the small firms' strategy and leads to higher selling prices and slower selling pace in the local market. Our findings survive various robust checks.
    Keywords: corporate financial status, output market decision, internal and external driven, real estate developers, housing supply
    JEL: G11 R30 L10
    Date: 2021–04–15
  14. By: Ale-Chilet, Jorge; Chen, Cuicui; Li, Jing; Reynaert, Mathias
    Abstract: We study collusion among rms in response to imperfectly monitored environmental regulation. Firms improve market prots by shading pollution and evade noncompliance penalties by shading jointly. We quantify the welfare eects of alleged collusion among three German automakers to reduce the size of diesel exhaust uid (DEF) tanks, an emission control technology used to comply with air pollution standards. We develop a structural model of the European automobile industry (2007-2018), where smaller DEF tanks create more pollution damages, but improve buyer and producer surplus by freeing up valuable trunk space and reducing production costs. We nd that choosing small DEF tanks jointly reduced the automakers' expected noncompliance penalties by at least 560 million euros. Antitrust and noncompliance penalties would reach between 1.46 and 14.63 billion euros to remedy the welfare damages of the alleged collusion.
    Date: 2021
  15. By: Nobuyuki Hanaki; Aidas Masiliunas
    Abstract: Multiple Cournot oligopoly experiments found more collusive behavior in markets with fewer firms (Huck et al., 2004; Hostmann et al., 2018). This result could be explained by a higher difficulty to coordinate or by lower incentives to collude in markets with more firms. We show that the Quantal Response Equilibrium can explain how the change in incentives alone could result in more collusive output in smaller markets. We propose a new method to manipulate the group size while keeping constant the locations of key outcomes, payoffs at these outcomes and the incentives to collude. Experiments using this normalized payoff function find that the number of firms has no direct effect on the average output or profit. We conclude that higher rates of aggregate collusion in markets with fewer firms are driven by the changes in incentives or focality rather than purely the number of firms. These findings imply that antitrust policies aimed at preventing collusion should focus on incentives rather than on the market concentration.
    Date: 2021–04
  16. By: Monteiro, Joseph; Prentice, Barry E.
    Abstract: The evolution of the motorized taxi industry in Vancouver is examined with respect to regulatory changes affecting competition. After initial laissez-faire policy, the industry was tightly regulated after 1946. As newer technologies emerged, newer types of services emerged and the demands of the public evolved. Vancouver remains one of the few large Canadian cities to resist increased competition. The protected taxi industry does not want changes pointing to congestion as a justification. The theory on externalities is examined with respect to congestion and information asymmetries. The paper document the most recent developments.
    Keywords: taxi regulation Vancouver competition
    JEL: R48
    Date: 2019–05
  17. By: Antonio Estache; Christophe Kieffer
    Abstract: This paper provides evidence on the growing degree of common ownership in the French pharmaceutical industry, on the associated anticompetitive risks and on the substantial differences across product markets within the industry. The assessment relies on the traditional Herfindahl-Hirschman Index, its modified version adopted by the common ownership literature and a new simpler alternative. These measures are then correlated with financial performance indicators collected at firm level. We find a positive and statistically significant relationship of concentration due to common ownership with the return on equity and the leverage level for some products.
    Keywords: Antitrust, Common Ownership, France, Index funds, Institutional Investors, Financial strategy, Market Power, Pharmaceuticals, Regulation, Shareholding
    Date: 2021–04
  18. By: Frédéric Marty (Université Côte d'Azur, France; GREDEG CNRS)
    Abstract: This contribution deals with the application of competition rules in the digital sector and, in particular, the distortions that can result from self-preferencing strategies. In the context of the European Commission's Digital Markets Act project and the UK's plans to regulate the major digital ecosystems, the aim is to examine the relative effectiveness of the current effects-based approach stemming from competition law enforcement, the use of per-se rules, the implementation of specific regulation or the imposition of structural remedies to address such risks. It is a question of insisting on the objectives pursued (maximisation of consumer welfare, dynamic efficiency, contestability of market positions and fairness) and on the conditions for the implementation of hybrid approaches combining the logic of sectoral regulation and procedures rooted in the enforcement of competition rules.
    Keywords: Digital ecosystems, self-preferencing, exclusionary abuses, exploitative abuses, remedies
    JEL: L12 L41 L42 L86
    Date: 2021–04
  19. By: Jesús Fernández-Villaverde; Federico Mandelman; Yang Yu; Francesco Zanetti
    Abstract: This paper develops a dynamic general equilibrium model with heterogeneous firms that face search complementarities in the formation of vendor contracts. Search complementarities amplify small differences in productivity among firms. Market concentration fosters monopsony power in the labor market, magnifying profits and further enhancing high-productivity firms’ output share. Firms want to get bigger and hire more workers, in stark contrast with the classic monopsony model, where a firm aims to reduce the amount of labor it hires. The combination of search complementarities and monopsony power induces a strong “Matthew effect” that endogenously generates superstar firms out of uniform idiosyncratic productivity distributions. Reductions in search costs increase market concentration, lower the labor income share, and increase wage inequality.
    Keywords: Market concentration, superstar firms, search complementarities, monopsony power in the labor market
    Date: 2021–02–08
  20. By: van Beek, Andries (Tilburg University, Center For Economic Research); Malmberg, Benjamin; Borm, Peter (Tilburg University, Center For Economic Research); Quant, Marieke (Tilburg University, Center For Economic Research); Schouten, Jop (Tilburg University, Center For Economic Research)
    Keywords: biform games; pure Nash equilibria; linear production; Owen set; sequencing; gain splitting rule
    Date: 2021
  21. By: Ying Fan; Ge Zhang
    Abstract: Subsidies to consumers may cause firms to charge higher prices, which offsets consumer benefits from subsidies. We study a subsidy program design that mitigates such price increases by making products' eligibility for a subsidy dependent on firms' commitment to price ceilings. To quantify the importance of such competition for eligibility, we develop a structural model and an estimation procedure that accommodate binding pricing constraints. We find that competition for eligibility mitigates the price increases arising from the subsidy and even leads to a reduction in prices for some products. It improves consumer and total surpluses while limiting government subsidy payments.
    JEL: D4 H2 L1
    Date: 2021–04
  22. By: Vladimir A. Karamychev; Jean-Marie Viaene
    Abstract: Mobile payments (m-payments) increase the accessibility of large segments of society to financial services while before the traditional banking system excluded these for lack of proof of identity and because of unsafe environments. This constitutes a key driver of new growth strategies of the developing world. Smartphones are essential to perform m-payments. In that regard, recent criticism from different sides has expressed the view that manufacturers’ strategies generate partial market coverage whereby the purchase of a phone and financial inclusion also remain out of reach for the group of poor consumers. Our aim in this paper is to examine the theoretical premises of this conjecture in a small open economy and uncover the conditions under which full market coverage is efficient and desirable. We analyze subgame perfect equilibria of a vertical duopoly model characterized by consumers’ taste for quality. The government uses taxes and/or subsidies to modify the market equilibrium. Given this, the following issues are considered: (a) What is the impact of different standards of payment security on the equilibrium number of low- and high-quality users? (b) What are the aggregate welfare gains of complete financial inclusion? (c) What happens if phone makers are foreign?
    Keywords: vertical duopoly, full market coverage, technical obsolescence, financial inclusion
    JEL: F23 G50 H31 H62 L13 L15
    Date: 2021
  23. By: Frédéric Marty (Université Côte d'Azur, France; GREDEG CNRS)
    Abstract: Les algorithmes de prix, de recherche, de recommandation ou encore d’appariement sont les vecteurs de gains indubitables d’efficacité. Ils peuvent néanmoins être les vecteurs ou les facilitateurs de pratiques anticoncurrentielles. Celles-ci peuvent se traduire par des atteintes au marché sous la forme de pratiques coordonnées horizontales ou verticales ou par des pratiques unilatérales permettant à une entreprise dominante de mettre en œuvre des stratégies d’éviction des concurrents ou des stratégies d’exploitation. Ce document de travail présente une revue de la littérature et de certains contentieux concurrentiels sur les atteintes algorithmiques possibles à une concurrence libre et non faussée à la fois sur les marchés numériques mais également au sein des écosystèmes numériques eux-mêmes.
    Keywords: concurrence, marchés numériques, écosystèmes, pratiques anticoncurrentielles
    JEL: K21 L12 L13
    Date: 2021–04
  24. By: Philip DeCicca; Donald S. Kenkel; Feng Liu; Jason Somerville
    Abstract: We exploit a quasi-experiment created when New York State began in 2011 to tax cigarettes sold on Native American Reservations. The regime change represents a unique opportunity to quantify brand loyalty because it almost doubled the price of premium-brand cigarettes, while Native brands were still untaxed. We use data from two different sources—the New York State Adult Tobacco Survey and the Nielsen Homescan Panel. We find that the increase in relative prices led to substantial declines in premium cigarette purchases. However, even among the premium consumers with the most to gain from switching, about three-quarters remained brand loyal.
    JEL: I12
    Date: 2021–04
  25. By: Magnus Blomkvist (Audencia Business School); Johannes Kortekangas (Hanken School of Economics); Hitesh Vyas
    Abstract: This study examines the impact of credit rating levels on acquisitions in Europe. In line with a financial constraints explanation, we find that improving the credit rating level by one notch increases the acquisition likelihood by 1.87pp or 8.1% (from baseline estimates). As the rating level further increases, firms begin to forego acquisition opportunities resulting in an inverse U-shaped relation between credit rating levels and acquisitions. The pattern is consistent with that high rated firms manage their credit rating levels by mitigating acquisition-induced downgrades. Overall, our results imply that European managers give relevance to their credit rating and that higher ratings relaxes financial constraints facilitating acquisitions.
    Keywords: Financial Constraints,Credit Ratings,Mergers and Acquisitions
    Date: 2021–04–09
  26. By: Iwasaki, Ichiro; Kočenda, Evžen; Shida, Yoshisada
    Abstract: We analyze factors behind 23,213 distressed acquisitions in European emerging markets from 2007–2019. Besides the impact of financial ratios, legal form, ownership structure, firm size, and age, we emphasize the role of institutions and channels of their propagation. We show that the quality and enforcement of insolvency laws are linked with the lower probability of distressed acquisitions, followed by corruption control and progress in banking reforms. The impact of institutions is larger in lessadvanced countries as compared to economically stronger ones. The effect of institutions increased after the financial crisis but declined as the economic situation improved.
    Keywords: distressed acquisitions, mergers, European emerging markets
    JEL: C35 D02 D22 E02 G34 K20 L22
    Date: 2021–04
  27. By: Elizabeth Pasteris; Gianina Mattioli
    Abstract: El objetivo de este trabajo es estudiar la importancia de ciertas prácticas del comercio minorista electrónico, que consisten en informar los precios de modo complejo, obligando al consumidor a calcular, él mismo, el precio real. Se estiman las consecuencias sobre la eficiencia del mercado, medida a través del nivel y la dispersión de precios, en el caso de bienes de compra frecuente. El estudio se aplica a la oferta online de supermercados de Mendoza y constituye una continuidad de la investigación anterior de las autoras, disponible en los anales de la Asociación Argentina de Economía Política, 2018. Se propone como explicación de la conducta analizada la estrategia de confusión del consumidor.
    Keywords: dispersión de precios, comercio electrónico, confusión del consumidor, comercio minorista
    JEL: I1 D4
    Date: 2020–11

This nep-com issue is ©2021 by Russell Pittman. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.