nep-com New Economics Papers
on Industrial Competition
Issue of 2021‒12‒20
twenty-two papers chosen by
Russell Pittman
United States Department of Justice

  1. The Tension Between Market Shares and Profit Under Platform Competition By Paul Belleflamme; Martin Peitz; Eric Toulemonde
  2. Strategic data sales to competing firms By DELBONO Flavio; REGGIANI Carlo; SANDRINI Luca
  3. Monopsony in the Labor Market: New Empirical Results and New Public Policies By Orley C. Ashenfelter; David Card; Henry S. Farber; Michael Ransom
  4. Markups and Concentration in the Context of Digitization: Evidence from German Manufacturing Industries By John P. Weche; Joachim Wagner
  5. Organizational Structure and Pricing: Evidence from a Large U.S. Airline By Ali Hortaçsu; Olivia R. Natan; Hayden Parsley; Timothy Schwieg; Kevin R. Williams
  6. Impact of Cross-Border Competition on the German Retail Gasoline Market – German-Polish Border By Mats P. Kahl
  7. The draft digital markets act: a legal and institutional analysis By Ibáñez Colomo, Pablo
  8. Competition and regulation in the Finnish ATM industry By Markkula, Tuomas; Takalo, Tuomas
  9. Bid Coordination in Sponsored Search Auctions: Detection Methodology and Empirical Analysis By Decarolis, Francesco; Goldmanis, Maris; Penta, Antonio; Shakhgildyan, Ksenia
  10. Geographical Indications and Welfare: Evidence from the US Wine Market By Raj Chandra; Gabriel E. Lade; GianCarlo Moschini
  11. Why abandoning the paradise? Stations incentives to reduce gasoline prices at first By Thomas Wein
  12. M&A and Cybersecurity Risk: Empirical Evidence By Gabriele Lattanzio; Jerome Taillard
  13. Technological Obsolescence By Song Ma
  14. Market definition of the german retail gasoline industry on highways and those in the immediate vicinity By Christoph Kleineberg
  15. Market and Welfare Effects of Gene-Edited Technology on the U.S. Soybean Market By Lee, Yunkyung
  16. Macroprudential Policy, Bank Competition and Bank Risk in East Asia By E Philip Davis; Ka Kei Chan; Dilruba Karim
  17. Cross-Product and Cross-Market Adjustments Within Multiproduct Firms: Evidence from Antidumping Actions By Xiaohua Bao; Bruce A. Blonigen; Zhi Yu
  18. Empirical Perspectives on Auctions By Ali Hortaçsu; Isabelle Perrigne
  19. Market Intermediaries, Storage and Policy Reforms By Steve McCorriston; Donald MacLaren
  20. Maximizing revenue in the presence of intermediaries By Gagan Aggarwal; Kshipra Bhawalkar; Guru Guruganesh; Andres Perlroth
  21. Cartel behavior and efficient sanctioning by criminal sentences By Thomas Wein
  22. On a Markovian game model for competitive insurance pricing By Claire Mouminoux; Christophe Dutang; Stéphane Loisel; Hansjoerg Albrecher

  1. By: Paul Belleflamme; Martin Peitz; Eric Toulemonde
    Abstract: We introduce asymmetries across platforms in the linear model of competing two-sided platforms with singlehoming on both sides and fully characterize the price equilibrium. We identify market environments in which one platform has a larger market share on both sides while obtaining a lower profit than the other platform. This platform enjoys a competitive advantage on one or both sides. Our finding raises further doubts on using market shares as a measure of market power in platform markets.
    Keywords: Two-sided platforms, market share, market power, oligopoly, network effects, antitrust
    JEL: D43 L13 L86
    Date: 2020–08
  2. By: DELBONO Flavio; REGGIANI Carlo (European Commission – JRC); SANDRINI Luca
    Abstract: The unprecedented access of firms to consumer level data facilitates more precisely targeted individual pricing. We study the incentives of a data broker to sell data about a segment of the market to three competing firms. The segment only includes a share of the consumers in the market around one of the firms. Data are never sold exclusively. Despite the data are particularly tailored to the potential clientele of one of the firms, we show that the data broker has incentives to sell the list to its competitors. Such market outcome is not socially optimal, and a regulator that aims to maximise consumers and social welfare should consider mandating data sharing.
    Keywords: data markets, personalised pricing, price discrimination, oligopoly, selling mechanisms
    Date: 2021–12
  3. By: Orley C. Ashenfelter; David Card; Henry S. Farber; Michael Ransom
    Abstract: This paper summarizes the results of nearly a dozen new papers presented at the Sundance Conference on Monopsony in Labor Markets held in October 2018. These papers, to be published as a special issue of the Journal of Human Resources, study various aspects of monopsony and failures of competition in labor markets. It also reports on the new developments in public policies associated with widespread concerns about labor market competition and efforts to ameliorate competitive failures. The conference papers range from studies of the labor supply elasticity individual firms face to studies of local labor market concentration to studies of explicit covenants suppressing labor market competition. New policies range from private and public antitrust litigation to concerns about the effect of mergers and inter-firm agreements on labor market competition. We provide a detailed discussion of the mechanics of the Silicon Valley High Tech Worker conspiracy to suppress competition based on Court documents in the case. Non-compete agreements, which are not enforceable in three states already, have also come under scrutiny.
    JEL: J0 J2 J3 J4
    Date: 2021–11
  4. By: John P. Weche (Hamburg University of Applied Sciences, Germany; Monopolies Commission, Bonn, Germany; Leuphana University of Lüneburg, Germany); Joachim Wagner (Leuphana University of Lüneburg, Germany)
    Abstract: Recent empirical studies suggest that there is a rising trend of market power across sectors in advanced economies. We contribute to this line of research by providing industry-speci_c evidence for German manufacturing industries, based on representative high-quality _rm level data from o_cial statistics that cover _rms from all size classes with more than 20 employees (2005{2013). We compare _rm-speci_c markups and industry concentration as market power indicators and discuss the role of digitization. Our results do not suggest an overall average increase in market power in German manufacturing. However, if we look at changes in individual industries, then we do _nd increasing markups and an increasing concentration in many industries. We also demonstrate the ambiguous relationship between the two indicators and _nd no clear evidence that digital transformation and market power go hand in hand.
    Keywords: Market power, business concentration, markups, digitalization, manufacturing, Germany
    JEL: D4 L1 L4 L5 L6
    Date: 2020–07
  5. By: Ali Hortaçsu; Olivia R. Natan; Hayden Parsley; Timothy Schwieg; Kevin R. Williams
    Abstract: We study how organizational boundaries affect pricing decisions using comprehensive data from a large U.S. airline. We document that the firm's advanced pricing algorithm, utilizing inputs from different organizational teams, is subject to multiple biases. To quantify the impacts of these biases, we estimate a structural demand model using sales and search data. We recover the demand curves the firm believes it faces using forecasting data. In counterfactuals, we show that correcting biases introduced by organizational teams individually have little impact on market outcomes, but coordinating organizational outcomes leads to higher prices/revenues and increased dead-weight loss in the markets studied.
    JEL: C11 C53 D22 D42 L11 L93
    Date: 2021–11
  6. By: Mats P. Kahl (Leuphana University of Lüneburg)
    Abstract: Competition on the German gasoline market is of interest for economists, competition authorities and the general public alike. In this paper, I analyse how constantly lower gasoline prices in Poland affect the prices set in the German border region. More precisely, I estimate the impact of one additional kilometre of distance to the nearest Polish competitor on the price charged by German gasoline stations. The analysis is based on a complete dataset of German gasoline prices and an accurate assessment of distances. Fitting random effects models for German gasoline prices while controlling for various station characteristics, I find no evidence suggesting that German gasoline stations enter into price competition with their Polish opponents. The analysis of gasoline station infrastructure in the German border region reveals increasingly sparse gasoline station density when approaching the Polish border, along with an increasing share of premium brands. On the one hand, I find evidence suggesting that price competition between German and Polish gasoline stations is dominated by the enormous tax differences that presumably exceed profit margins by far; on the other hand, I reveal the consequences on the market structure that are caused by German gasoline stations anticipating this permanent difference in taxes when deciding upon where to locate their gasoline stations.
    Keywords: gasoline market, cross-border competition, market transparency
    JEL: L13 L41 L92
    Date: 2020–07
  7. By: Ibáñez Colomo, Pablo
    Abstract: The proposal for a Digital Markets Act signals a new approach to the regulation of Big Tech in the EU and beyond.1 The legislative machine has been set in motion following a change in the attitude of authorities and stakeholders vis-à-vis the growing and transformative role of online platforms in the economy. It has been argued—including in a number of reports for public authorities2—that competition law, in its current incarnation, would be unable to address the challenges raised by Big Tech. According to this view, it would not be sufficiently effective to respond to the actual or potential effects resulting from the power wielded by these firms. Several alleged...
    Keywords: OUP deal
    JEL: L81
    Date: 2021–09–01
  8. By: Markkula, Tuomas; Takalo, Tuomas
    Abstract: Declining ATM numbers pose a challenge for competition policy and financial regulatory authorities. In this report we review the Finnish experience of regulating the competition in the ATM industry. To analyze the Finnish developments we extend the model of Kopsakangas-Savolainen and Takalo (2014), and draw on the existing literature and benchmarks from the selected other countries. We document how changes in the ATM market regulation and market structure has decoupled the ATM network size from the declining cash use in Finland. The Finnish regulation has almost exclusively focused on foreign fees, while in general it would be better to regulate interchange fees. If the optimal fee regulation is not feasible, the authorities could also consider quantity regulation.
    Keywords: ATM industry,cash,competition policy,optimal regulation,retail payments
    Date: 2021
  9. By: Decarolis, Francesco; Goldmanis, Maris; Penta, Antonio; Shakhgildyan, Ksenia
    Abstract: Bid delegation to specialized intermediaries is common in the auction systems used to sell internet advertising. When the same intermediary concentrates the demand for ad space from competing advertisers, its incentive to coordinate client bids might alter the functioning of the auctions. This study develops a methodology to detect bid coordination, and presents a strategy to estimate a bound on the search engine revenue losses imposed by coordination relative to a counterfactual benchmark of competitive bidding. Using proprietary data from auctions held on a major search engine, coordination is detected in 55 percent of the cases of delegated bidding that we observed, and the associated upper bound on the search engine’s revenue loss ranges between 5.3 and 10.4 percent.
    Keywords: Online Advertising; Sponsored Search Auctions; Delegation; Common Agency
    JEL: C72 D44 L81
    Date: 2021–12–03
  10. By: Raj Chandra; Gabriel E. Lade; GianCarlo Moschini (Center for Agricultural and Rural Development (CARD) at Iowa State University)
    Abstract: A systematic component of wine quality is believed to depend on the geo-climatic factors of its production conditions. This belief has long been a motivation for the development of geographical indications for wines. In the United States, American Viticulture Areas (AVAs) represent the most common geographic factor firms use to differentiate their products. In this paper, we estimate a discrete choice model of US wine demand to study the market and welfare impact of AVAs. Specifically, we develop a two-level nested logit choice model, featuring many wine products and characteristics-including wine type, brands, and varietals, in addition to AVAs-and estimate it using Nielsen Consumer Panel data over the 2007-2019 period. We find significant welfare gains from AVA information on wine labels. Over the period of interest, the welfare gain attributable to AVAs is estimated at about $2.37 billion, with wine producers and retailers capturing approximately 80% of this surplus. Approximately 90% of consumer welfare gains are due to product differentiation and increased variety, with the remaining gains due to price decreases resulting from increased product competition.
    Date: 2021–12
  11. By: Thomas Wein (Leuphana University of Lüneburg)
    Abstract: The German petrol station market is characterized by strong intraday price cycles, which probably correspond to the well-known Edgeworth cycles. The prices go up strongly in the late evening or in the middle of the night, fall relatively heavily in the early morning and then go up and down several times in the course of the day. Locally, the analysis is limited to the 26 petrol stations that plausibly form a common market in the Lueneburg region. This essay picks out the specific sequence in which, after generally rising prices during the day, a single supplier is the first to reverse the price trend and lower its price. For this purpose, current price reports are used to define the price reduction event down to the second, and to show only the valid prices of competitors prior to the event. All German petrol stations have to report price changes to the Bundeskartellamt's Market Transparency Department. Tankerkoenig then publishes the full reports. This results in one panel observation for each price reduction event. Out of nearly 300,000 price observations, just over 10,000 panel observations result. Fixed-effect logit estimates are used to test whether the theoretically and economically significant price differences of the Edgeworth cycles explain the behavior of the price cutters, or whether market structure factors, such as brand affiliation/independence of the petrol station, service offerings, or location characteristics predict price-cutting behavior. The novel recording of the price dynamics in the petrol station market by using the accurate petrol station price data to the second indicates promising research of extensive price data and avoids the enormous loss of information in the previously common calculation of average prices at certain times.
    Keywords: Edgeworth cycles, gasoline prices, dynamic pricing
    JEL: L13 L41 K21
    Date: 2020–08
  12. By: Gabriele Lattanzio (Nazarbayev University, Graduate School of Business); Jerome Taillard (Babson College, Department of Finance)
    Abstract: Using text-based measures of cybersecurity risk, we document that low cybersecurity risk firms are more likely to initiate or be targeted for an M&A transaction. Further, we show that the market has recently started to price cybersecurity risk at the time of a deal announcement and – consistent with this finding - attempted mergers are significantly less likely to fail if the selected target has a low cybersecurity risk profile. Cyber risk is finally reflected in merger premium, which appears to be systematically higher for mergers where the acquirer exhibits low cybersecurity risk levels. These findings offer novel evidence on the economic impact of cybersecurity risk on the market for corporate control.
    Keywords: Mergers and Acquisitions, Cybersecurity Risk, M&A Withdrawal, Valuation
    JEL: G30 G34 M14
    Date: 2021–10
  13. By: Song Ma
    Abstract: This paper proposes a new measure of technological obsolescence using detailed patent data. Using this measure, we present two sets of results. First, firms' technological obsolescence foreshadows substantially lower growth, productivity, and reallocation of capital. This finding applies mainly for obsolescence of core innovation and embodied innovation, and it is stronger in competitive product markets. Second, in stock markets, high-obsolescence firms under-perform low-obsolescence firms by 7 percent annually. Using analyst forecast data, we show this is due to a systematic overestimation of future profits of obsolescent firms. The measure contains incremental information about firm innovation relative to measures focusing on new innovation.
    JEL: G1 G3 G4 O3 O4
    Date: 2021–11
  14. By: Christoph Kleineberg (Leuphana University of Lüneburg)
    Abstract: The geographical definition of markets is a crucial challenge for economists. With the availability of multiple tools to compare prices, the idea of market definition is entering a new era as it infiltrates the digital sphere. Since December 1st, 2013 the market transparency unit of the Federal German Cartel Office is forwarding all prices, for every gasoline type, at every gasoline station in Germany at all times, through consumer information services to consumers by the means of websites or smartphone apps. Gasoline is a perfectly homogenous product as there is no alternative for its consumption by car, bus or truck drivers in the short or medium run. The availability of price data allows us to study what premiums drivers are willing to pay in order to avoid search costs or additional driving distances. The research question is how prices of highway gasoline stations are dependent upon prices offered by street gasoline stations in the vicinity, and what additional price customers are willing to pay to avoid searching for another gasoline station away from the highway. Results indicate that there is a premium of 10 to 11 cents per litre throughout the day and 15 cents per litre in the evening on gasoline sold by stations on the highway. When checked for robustness, results indicate that the pricing behavior of gasoline stations differ depending on the particular market environment. There is no uniform pricing behavior of highway gasoline stations. Some highway gasoline station are setting their prices independently from the gasoline stations in the vicinity, other are acting like regular gasoline stations and do not even charge an additional premium. Furthermore, a high frequency of traffic on highways leads to lower prices whereas a high population density leads to higher prices.
    Keywords: market definition, applied economics, pricing patterns, gasoline market
    JEL: D03 D40 L11
    Date: 2020–07
  15. By: Lee, Yunkyung
    Keywords: Marketing, Crop Production/Industries
    Date: 2021–08
  16. By: E Philip Davis; Ka Kei Chan; Dilruba Karim
    Abstract: Studies of the effect of macroprudential policy on bank risk tend to disregard the potential complementary role of bank competition, which could influence policy's effectiveness in achieving its financial stability objectives. Accordingly, we assess the relation of macroprudential policy and competition to bank risk jointly from a sample of 1373 banks from 13 East Asian countries, using the latest IMF dataset of macroprudential policy from 1990 to 2018. Among our results, we have found that whereas macroprudential policies did commonly have a beneficial effect on risk at a bank level controlling for competition, there are a number of cases where policies were deleterious through increased risk. Notably in the developing and emerging East Asian countries and in the short term, the interactions between competition and macroprudential measures often show a lesser response in terms of risk reduction for banks with more market power, a form of "competition-stability". We suggest that this links in turn to ability of such banks to undertake risk-shifting in response to macroprudential policy. On the other hand, we find for banks in advanced East Asian countries some tendency in the long term for banks facing intense competition to take relatively more risks in face of macroprudential measures, i.e. "competition fragility". These findings provide important implications for regulators.
    Keywords: Macroprudential policy, bank risk, Z score, bank competition
    JEL: E44 E58 G17 G28
    Date: 2021–12
  17. By: Xiaohua Bao; Bruce A. Blonigen; Zhi Yu
    Abstract: Multiproduct firms are responsible for the vast majority of global trade. A prior literature examines how multiproduct firms respond to trade liberalizations that simultaneously affect all of the firms' products and inputs. In contrast, our study uses Chinese firm-product-level export data to examine how an AD action, a very targeted trade policy against a specific product in a specific export destination, affects a multiproduct firms' price and quantity decisions across its other products and export destinations. We find robust evidence for a new phenomenon we call within-firm cross-product trade deflection whereby an AD duty against one of the firm's products in one of its export destinations is associated with reduced prices and increased sales of its other products across all markets. This type of effect depends on increasing costs from joint production within multiproduct firms, something that is often assumed away in many models of the multiproduct firm. We also document for the first time a within-firm chilling effect whereby an AD action in one export destination on a product leads the firm to raise price and lower quantity of the product in other export destinations to lower the risk of AD actions in these other markets.
    JEL: F13 F14 L11 L23
    Date: 2021–11
  18. By: Ali Hortaçsu; Isabelle Perrigne
    Abstract: The empirical analysis of auction data has become a thriving field of research over the past thirty years. Relying on sophisticated models and advanced econometric methods, it addresses a wide range of policy questions for both public and private institutions. This chapter offers a guide to the literature by stressing how data features and policy questions have shaped research in the field. The chapter is organized by types of goods for sale and covers auctions of timber, construction and services procurement, oil and gas leases, online auctions, internet advertising, electricity, financial securities, spectrum, as well as used goods. It discusses the idiosyncrasies of each applied setting and the respective empirical findings.
    JEL: G2 L11 L4 L71 L73 L74 L86 L94 L96
    Date: 2021–11
  19. By: Steve McCorriston (Department of Economics, University of Exeter); Donald MacLaren (Department of Economics, University of Melbourne)
    Abstract: Intermediaries play a crucial role in the functioning of agricultural and food markets through linking production, imports and storage with consumption. They may be either private firms or parastatals, each type with a different objective function. In this paper, we develop a theoretical framework in the context of a small open economy subject to an exogenous and stochastic world commodity price and analyse how competition in the intermediary sector and alternative forms of intermediaries determine the incentives for storage and market outcomes more generally. We apply this framework to the Egyptian wheat sector as an illustrative case study, a country where food security is a priority and where both forms of intermediaries co-exist. Through stochastic simulation, we analyse two changes in government policy where we account for different characterisations of the intermediary sector: the first is the effects of changing the policy instruments; the second relates to market reforms where the private sector replaces the storage function of the parastatal.
    Keywords: private intermediaries, parastatals, storage, food security
    JEL: Q13 Q1
    Date: 2021–12–02
  20. By: Gagan Aggarwal; Kshipra Bhawalkar; Guru Guruganesh; Andres Perlroth
    Abstract: We study the mechanism design problem of selling $k$ items to unit-demand buyers with private valuations for the items. A buyer either participates directly in the auction or is represented by an intermediary, who represents a subset of buyers. Our goal is to design robust mechanisms that are independent of the demand structure (i.e. how the buyers are partitioned across intermediaries), and perform well under a wide variety of possible contracts between intermediaries and buyers. We first study the case of $k$ identical items where each buyer draws its private valuation for an item i.i.d. from a known $\lambda$-regular distribution. We construct a robust mechanism that, independent of the demand structure and under certain conditions on the contracts between intermediaries and buyers, obtains a constant factor of the revenue that the mechanism designer could obtain had she known the buyers' valuations. In other words, our mechanism's expected revenue achieves a constant factor of the optimal welfare, regardless of the demand structure. Our mechanism is a simple posted-price mechanism that sets a take-it-or-leave-it per-item price that depends on $k$ and the total number of buyers, but does not depend on the demand structure or the downstream contracts. Next we generalize our result to the case when the items are not identical. We assume that the item valuations are separable. For this case, we design a mechanism that obtains at least a constant fraction of the optimal welfare, by using a menu of posted prices. This mechanism is also independent of the demand structure, but makes a relatively stronger assumption on the contracts between intermediaries and buyers, namely that each intermediary prefers outcomes with a higher sum of utilities of the subset of buyers represented by it.
    Date: 2021–11
  21. By: Thomas Wein (Leuphana University of Lüneburg)
    Abstract: Hardcore cartels that make agreements on quantities, prices, or areas, risk receiving both administrative fines from the cartel authority and civil law claims for damages. In addition to these risks, there is a recurring legal policy discussion that cartelist should also face criminal law consequences, such as fines and imprisonment with or without probation. In Germany, for example, companies may be found guilty of an administrative offence or have to answer for damages they cause. The cartel authority may fine employees who contribute significantly to the establishment and enforcement of the cartel within a company. As well, such as in the case of a tendering cartel, individuals may face prosecution. According to Becker's theory of crime, penalties must be at least as high as expected benefits to deter crimes. For example, we start by multiplying cartel infringement by the reciprocal of the probability of detection and punishment. When we factor in expected reductions due to leniency and settlements, it’s easy to see there must be an increase in penalties for them be effective. From the company perspective, there is a substitutive relationship between administrative penalties and compensation payments under private law. Criminal penalties such as fines or imprisonment have a negative impact on an employees’ concept of personal benefits. In theory, deterrence to participate in cartel activities must be based both on the incentives of firms as a whole, and on the individual participants’ perspectives. Sanctions by the Bundeskartellamt in the last decade provide information on the profits made from cartel offences despite current restrictions, and take into account cartel surcharges discussed in the literature. By applying the empirically determined probabilities of punishment, we can calculate the minimum level of fines required to deter cartel infringement ex-post for each case, and compare the figures to the actual penalties. In many cases, the calculated minimum penalties would result in a considerable increase in fines, which would have to be covered either by compensation payments, or criminal sanctions. If custodial sentences were based on the probability of zero compensation payments, and the monetary loss of benefit, the result would sometimes equal an impractically long criminal sentence. Sensitivity analyzes that use alternative values for the probability of punishment usually still result in long prison sentences. In light of these estimates, the practicality of achieving a sufficient degree of deterrence through criminal sanctions is highly questionable. From a legal policy perspective, it would be more effective to raise administrative sanctions to a sufficient level, especially against individuals, if compensation payments cannot be increased substitutionally.
    Keywords: hard-core-cartels, deterrence, criminal penalty
    JEL: L41 K14 K21
    Date: 2020–07
  22. By: Claire Mouminoux (BETA - Bureau d'Économie Théorique et Appliquée - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Christophe Dutang (CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - CNRS - Centre National de la Recherche Scientifique - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres); Stéphane Loisel (SAF - Laboratoire de Sciences Actuarielle et Financière - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon); Hansjoerg Albrecher (UNIL - Université de Lausanne)
    Abstract: In this paper, we extend the non-cooperative one-period game of Dutang et al. (2013) to model a non-life insurance market over several periods by considering the repeated (one-period) game. Using Markov chain methodology, we derive general properties of insurer portfolio sizes given a price vector. In the case of a regulated market (identical premium), we are able to obtain convergence measures of long run market shares. We also investigate the consequences of the deviation of one player from this regulated market. Finally, we provide some insights of long-term patterns of the repeated game as well as numerical illustrations of leadership and ruin probabilities.
    Keywords: Markov chains Mathematics Subject Classification (2010): MSC 60J10,solvency constraint,non-cooperative game,consumers' price sensitivity,game theory,Markov chains Mathematics Subject Classification (2010): MSC 91G05,Markov chains Mathematics Subject Classification (2010): MSC 91A20
    Date: 2021–10–29

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.