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on Industrial Competition |
| By: | Bos, Iwan; Marini, Marco A. |
| Abstract: | This paper examines a homogeneous-good Bertrand-Edgeworth oligopoly model to explore the role of firm size and number in pricing. We consider the price impact of merger, breakup, investment, divestment, entry, and exit. A merger leads to higher prices only when it increases the size of the largest seller and industry capacity is neither too big nor too small post-merger. Similarly, breaking-up a firm only leads to lower prices when it concerns the biggest producer and aggregate capacity is within an intermediate range. Investment and entry (weakly) reduce prices, whereas divestment and exit yield (weakly) higher prices. Taken together, these findings suggest that size matters more than number in the determination of oligopoly prices. |
| Keywords: | Bertrand-Edgeworth Competition; Edgeworth Price Cycle; Firm Size Distribution; Oligopoly Pricing; Price Dispersion |
| JEL: | D43 L1 L12 L13 |
| Date: | 2022–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:115800&r=com |
| By: | Miguel Anton; Florian Ederer; Mireia Gine; Martin C. Schmalz |
| Abstract: | We present a mechanism based on managerial incentives through which common ownership affects product market outcomes. Firm-level variation in common ownership causes variation in managerial incentives and productivity across firms, which leads to intra-industry and intra-firm cross-market variation in prices, output, markups, and market shares that is consistent with empirical evidence. The organizational structure of multiproduct firms and the passivity of common owners determine whether higher prices under common ownership result from higher costs or from higher markups. Using panel regressions and a difference-in-differences design we document that managerial incentives are less performance-sensitive in firms with more common ownership. |
| JEL: | D21 G32 J33 L13 L21 M12 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30785&r=com |
| By: | Gamp, Tobias (HU Berlin); Krähmer, Daniel (University of Bonn) |
| Abstract: | We study the interplay between quality provision and consumer search in a search market where firms may design products of inferior quality to promote them to naive consumers who fail to fully understand product characteristics. We derive an equilibrium in which both superior and inferior quality is offered and show that as search frictions vanish, the share of firms offering superior goods in the market goes to zero. The presence of inferior products harms sophisticated consumers, as it forces them to search longer to find a superior product. We argue that policy interventions that reduce search frictions such as the standardization of price and package formats may harm welfare. In contrast, reducing the number of naive consumers through transparency policies and education campaigns as well as a minimum quality standard can improve welfare. |
| Keywords: | inferior products; competition; naivete; consumer search; |
| JEL: | D18 D21 D43 D83 |
| Date: | 2022–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:364&r=com |
| By: | Johannes Boehm (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Jan Sonntag (Sciences Po - Sciences Po) |
| Abstract: | This paper studies the prevalence of potential anticompetitive effects of vertical mergers using a novel data set on U.S. and international buyer-seller relationships and across a large range of industries. We find that relationships are more likely to break when suppliers vertically integrate with one of the buyers' competitors than when they vertically integrate with an unrelated firm. This relationship holds for both domestic and cross-border mergers and for domestic and international relationships. It also holds when instrumenting mergers using exogenous downward pressure on the supplier's stock prices, suggesting that reverse causality is unlikely to explain the result. In contrast, the relationship vanishes when using rumored or announced but not completed integration events. Firms experience a substantial drop in sales when one of their suppliers integrates with one of their competitors. This sales drop is mitigated if the firm has alternative suppliers in place. These findings are consistent with anticompetitive effects of vertical mergers, such as vertical foreclosure, rising input costs for rivals, or self-foreclosure. This paper was accepted by Joshua Gans, business strategy. |
| Keywords: | Mergers and acquisitions, Market foreclosure, Vertical integration, Production networks |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03877289&r=com |
| By: | Gamp, Tobias (HU Berlin); Krähmer, Daniel (University of Bonn) |
| Abstract: | We study the implications of biased consumer beliefs for search market outcomes in the seminal framework due to Diamond (1971). Biased consumers base their search strategy on a belief function which specifies for any (true) distribution of utility offers in the market a possibly incorrect distribution of utility offers. If biased consumers overestimate the best offer in the market, a novel type of equilibrium may emerge in which firms make exceptionally favourable offers in order to meet biased consumers' unreasonable high expectations which then become partially self-fulfilling. Consequently, the presence of biased consumers may improve the welfare of all consumers. |
| Keywords: | consumer search; bounded rationality; cursed beliefs; |
| JEL: | D18 D21 D43 D83 |
| Date: | 2022–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:365&r=com |
| By: | Luca Fontanelli (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur, SSSUP - Scuola Universitaria Superiore Sant'Anna [Pisa]); Mattia Guerini (University of Brescia, GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur, SSSUP - Scuola Universitaria Superiore Sant'Anna [Pisa]); Mauro Napoletano (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, SKEMA Business School, SSSUP - Scuola Universitaria Superiore Sant'Anna [Pisa]) |
| Abstract: | We build a simple dynamic model to study the effects of technological learning, market selection and international competition in the determination of export flows and market shares. The model features two countries populated by firms with heterogeneous productivity levels and sales. Market selection in each country is driven by a finite pairwise Pólya urn process. We show that market selection leads either to a national or to an international monopoly in presence of a static distribution of firm productivity levels. We then incorporate firm learning and entry-exit in the model and we show that the market structure does not converge to a monopoly. In addition, we show that the extended model is able to jointly reproduce a wide ensemble of stylized facts concerning intra-industry trade, industry and firm dynamics. |
| Keywords: | International trade, industrial dynamics, rm dynamics, market selection, Pólya urn |
| Date: | 2022–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:halshs-03509092&r=com |
| By: | Vanessa Alviarez (Sauder - Sauder School of Business [British Columbia] - UBC - University of British Columbia); Keith Head (Sauder - Sauder School of Business [British Columbia] - UBC - University of British Columbia); Thierry Mayer (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We assess the consequences for consumers in 76 countries of multinational acquisitions in beer and spirits. Outcomes depend on how changes in ownership affect markups versus efficiency. We find that owner fixed effects contribute very little to the performance of brands. On average, foreign ownership tends to raise costs and lower appeal. Using the estimated model, we simulate the consequences of counterfactual national merger regulation. The US beer price index would have been 4–7% higher without divestitures. Up to 30% savings could have been obtained in Latin America by emulating the pro-competition policies of the US and EU. |
| Keywords: | multinationals, oligopoly, markups, concentration, firm effects, brands, frictions, mergers and acquisitions, competition policy |
| Date: | 2021–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03389199&r=com |
| By: | Thierry Kirat (IRISSO - Institut de Recherche Interdisciplinaire en Sciences Sociales - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Frédéric Marty (CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal = University of Québec in Montréal, GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | The article presents the late convergence process from American economists that led them to support a strong antitrust enforcement in the Second New Deal despite their long-standing distrust toward this legislation. It presents the path from which institutionalist economists, on the one side, and members of the First Chicago School, on the other one, have converged on supporting the President F.D. Roosevelt administration towards reinvigorating antitrust law enforcement as of 1938, putting aside their initial preferences for a regulated competition model or for a classical liberalism. The appointment of Thurman Arnold at the head of the Antitrust Division in 1938 gave the impetus to a vigorous antitrust enforcement. The 1945 Alcoa decision crafted by Judge Hand embodied the results of this convergence: in this perspective, the purpose of antitrust law enforcement does consist in preventing improper uses of economic power. |
| Keywords: | Antitrust, Efficiency, Economic Power, Institutional Economics, Chicago School, New Deal |
| Date: | 2021–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:halshs-03261721&r=com |
| By: | Michele Fioretti (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Alessandro Iaria (University of Bristol [Bristol]); Aljoscha Janssen (SIS - Singapore Management University); Robert K Perrons (QUT - Queensland University of Technology [Brisbane]); Clément Mazet-Sonilhac (Centre de recherche de la Banque de France - Banque de France, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We investigate the effect of technology adoption on competition by leveraging a unique dataset on production, costs, and asset characteristics for North Sea upstream oil & gas companies. Relying on heterogeneity in the geological suitability of fields and a landmark decision of the Norwegian Supreme Court that increased the returns of capital investment in Norway relative to the UK, we show that technology adoption increases market concentration. Firms with prior technology-specific know-how specialize more in fields suitable for the same technology but also invest more in high-risk-high-return fields (e.g., ultra-deep recovery), diversifying their technology portfolio and ultimately gaining larger shares of the North Sea market. Our analyses illustrate how technology adoption can lead to market concentration both directly through specialization and indirectly via experimentation. |
| Keywords: | Market structure, Competition, Specialization, Experimentation, Upstream oil and gas markets, North Sea, Innovation, Adoption |
| Date: | 2022–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03791971&r=com |
| By: | Serafica, Ramonette B.; Oren, Queen Cel A. |
| Abstract: | The size of the digital sector is significant and comprises various activities, processes, and industries. The interdependence of different markets within and across segments of the digital value chain implies that barriers to entry and expansion in one industry can have far-reaching effects on the growth of the rest of the digital sector and the economy, more widely. Ensuring robust competition across the digital value chain is therefore of paramount importance. Internet connectivity is the most critical element of the value chain as it links the various participants in the digital sector to the final users or consumers. It is also the segment that has the highest barriers to entry. Although natural barriers exist, regulatory and strategic barriers further constrain competition. Thus, access regulations will need to be strengthened and enforced. An open access framework and increased transparency will facilitate the growth of broadband. Adapting M&A guidelines, effective cross-sectoral regulatory cooperation, and investment in training will also reduce barriers to entry and expansion. Partnerships between the private and public sectors will also be necessary to reduce the digital divide in the country significantly. The telecommunications industry has been dominated by two vertically integrated firms, which are also expanding their service portfolios to other segments. While vertical integration along the digital value chain could create efficiencies, significant market power could enable anticompetitive conduct and limit innovation. In the digital age, competitive pressures must be built into the entire value chain by lowering barriers to entry and expansion, removing bottlenecks to innovation, and reducing switching costs. Further analysis of particular segments or specific bottlenecks and anti-competitive practices will be useful in crafting appropriate regulatory approaches. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | ICT;telecommunications;digital;internet;value chain;competition |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2022-47&r=com |
| By: | Christian Bontemps (ENAC - Ecole Nationale de l'Aviation Civile, TSE-R - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Kevin Remmy (université de Mannheim); Johnny Wei |
| Abstract: | In this paper, we estimate a structural model of the domestic US airline market to analyze the eect of the recent merger between American Airlines and US Airways. Our results show that, between 2011 and 2016, a substantial fuel price drop in conjunction with changes in consumer preferences toward direct ights completely rationalizes the observed decrease in prices. However, we estimate that, during the same period, more than half of the consumer welfare increase is due, on top of these environmental changes, to the ex-post optimization of the networks of the newly merged airline and of its competitors. Acknowledgments: We would like to thank the Guest Editors and two anonymous referees for helpful comments. Special thanks to Sara Crompton Meade and Mariane Bontemps for proofreading. Funding from the French National Research Agency (ANR) under the Investments for the Future program (Investissements d'Avenir, grant ANR-17-EURE-0010) is gratefully acknowledged. |
| Keywords: | merger, airlines, network, structural model, nested logit, airfare, demand, supply |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03845873&r=com |
| By: | Thierry Mayer (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CEPR - Center for Economic Policy Research - CEPR); Marc Melitz (Department of Economics, Harvard University - Harvard University [Cambridge], NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research, CEPR - Center for Economic Policy Research - CEPR); Gianmarco Ottaviano (Bocconi University [Milan, Italy], CEP - LSE - Centre for Economic Performance - LSE - London School of Economics and Political Science, CEPR - Center for Economic Policy Research - CEPR) |
| Abstract: | We document how demand shocks in export markets lead French multiproduct exporters to reallocate the mix of products sold in those destinations. In response to positive demand shocks, French firms skew their export sales toward their best-performing products. We develop a theoretical model of multiproduct firms and derive the specific demand conditions (with endogenous price elasticities) needed to generate these product-mix reallocations. Under those demand conditions, the increased competition from demand shocks in export markets also induces productivity changes within the firm. We empirically test for this connection between demand shocks and the productivity of multiproduct firms. We find that this connection is economically substantial. |
| Date: | 2021–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03796148&r=com |
| By: | Anna D’Annunzio (: TBS Business School); Antonio Russo (Department of Economics, University of Sheffield and CESifo) |
| Abstract: | We study commodity taxation in markets where suppliers implement second-degree price discrimination, by offering different package sizes or quality-differentiated versions of a product. In these markets, suppliers distort the quantity (or quality) intended for all types of consumers, except for those with the highest marginal willingness to pay. We show that differentiated ad valorem taxes can alleviate this distortion, and thus increase government revenue as well as welfare, provided the tax rate increases with the size of the package (or quality of the version) of the good supplied. |
| Keywords: | Commodity taxation, tax incidence, price discrimination |
| JEL: | D4 H21 H22 L1 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2023001&r=com |
| By: | Qianjun Lyu (Institute for Microeconomics, University of Bonn) |
| Abstract: | This paper studies the optimal refund mechanism when an uninformed buyer can privately acquire information about his valuation over time. In principle, a refund mechanism can specify the odds that the seller requires the product returned while issuing a (partial) refund, which we call stochastic return. It guarantees the seller a strictly positive minimum revenue and facilitates intermediate buyer learning. In the benchmark model, stochastic return is sub-optimal. The optimal refund mechanism takes simple forms: the seller either deters learning via a well-designed non-refundable price or encourages full learning and escalates price discrimination via free return. This result is robust to both good news and bad news framework. |
| Keywords: | buyer learning, refund contract, information design, implementable mechanism |
| JEL: | D82 D86 L15 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:214&r=com |
| By: | Dirk Bergemann; Tibor Heumann; Stephen Morris |
| Abstract: | We consider a general nonlinear pricing environment with private information. The seller can control both the signal that the buyers receive about their value and the selling mechanism. We characterize the optimal menu and information structure that jointly maximize the seller's profits. The optimal screening mechanism has finitely many items even with a continuum of values. We identify sufficient conditions under which the optimal mechanism has a single item. Thus the seller decreases the variety of items below the efficient level as a by-product of reducing the information rents of the buyer. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2212.03360&r=com |
| By: | Erik Brynjolfsson; Long Chen; Xijie Gao |
| Abstract: | E-commerce sales have grown rapidly worldwide, massively increasing the availability of new products. We examine data from the largest digital platform in China and find that the number of book titles almost doubled, prices fell somewhat, and most new books are sold to consumers with unusual tastes. Demand for these niche products was significantly more inelastic than that of mass products. Embedding the estimates of demand elasticity into a two-segment CES framework, we find the welfare gain from increased variety was about 40 times the gain from lower prices and that rural consumers enjoyed the largest gains. |
| JEL: | O0 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30802&r=com |
| By: | Maarten De Ridder (London School of Economics (LSE); Centre for Macroeconomics (CFM)); Basile Grassi (Bocconi University; Centre for Economic Policy Research (CEPR); Innocenzo Gasparini Institute for Economic Research (IGIER)); Giovanni Morzenti (Bocconi University) |
| Abstract: | Is it feasible to estimate firm-level markups with commonly available datasets? Common methods to measure markups hinge on a production function estimation, but most datasets do not contain data on the quantity that firms produce. We use a tractable analytical framework, simulation from a quantitative model, and firm-level administrative production and pricing data to study the biases in markup estimates that may arise as a result. While the level of markup estimates from revenue data is biased, these estimates do correlate highly with true markups. They also display similar correlations with variables such as profitability and market share in our data. Finally, we show that imposing a Cobb-Douglas production function or simplifying the production function estimation may reduce the informativeness of markup estimates. |
| Keywords: | Macroeconomics, Production Functions, Markups, Competition |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:2210&r=com |
| By: | Michele Fioretti (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Vanessa Alvariez (IDB - Inter-American Development Bank - Inter-American Development Bank); Ayumu Ken Kikkawa (UBC - University of British Columbia); Monica Morlacco (USC - University of Southern California) |
| Abstract: | Global value chains (GVCs) typically involve large firms exerting bargaining power over the terms of trade. We develop a novel theory of international prices accounting for these features of GVCs and illustrate their e↵ect on the pass-through of trade shocks into import prices. We build a new dataset merging transaction-level U.S. import data with balance sheet data for both importers and exporters to evaluate the model's performance. Our estimated model generates more accurate predictions of pair-level price changes following trade shocks than standard models, improving the estimated impact of the 2018 trade war on aggregate U.S. import prices by 40-60%. |
| Date: | 2022–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03795736&r=com |
| By: | Pérez, Jorge; Vial, Felipe; Zárate, Román |
| Abstract: | Does transit infrastructure reduce labor market power? This paper estimates the effects of a large subway expansion on local labor market outcomes in Santiago, Chile. Using a linked employer-employee dataset with spatial information, we estimate the effects of the network expansion on the most-affected workers and firms through a reduced-form analysis. We find changes in work locations and wages consistent with a reduction in firms’ labor market power around areas connected to the subway network after the expansion. We then lay out a quantitative spatial equilibrium model where firms behave as oligopsonies in the labor market to calculate the welfare gains from the transit infrastructure expansion. Our model allows us to decompose the welfare gains into i) the efficiency gains through improved matching between workers and firms and ii) the gains from reducing labor misallocation through labor market power responses. The model also provides a framework to analyze the distributional implications of the infrastructure expansion. We find that workers benefit as firm owners see reduced profits and that accounting for labor market power responses amplifies the welfare gains. |
| Keywords: | Desarrollo urbano, Economía, Infraestructura, |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:dbl:dblwop:1992&r=com |
| By: | Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne); Emilio Raiteri (Eindhoven University of Technology); Rudi Bekkers (Eindhoven University of Technology) |
| Abstract: | This paper tests for traces of discrimination against foreigners in the patent system. It focuses on patent applications filed in China, and for which the owner has made a public disclosure that they are or may become essential to the implementation of a technical standard. Such potentially standard-essential patents are of particularly high importance to their owner. We use the timing of disclosure to a leading standard-setting organization as a source of econometric identification and carry out extensive tests to ensure the exogeneity of timing. We find that foreign patent applications are significantly less likely to be granted by the Chinese patent office if their owners disclose them to be potentially essential to a standard before the substantive examination starts. Furthermore, the patent office spends, on average, one more year on the examination of such patents, and the scope of the patents are also more extensively reduced. Our findings contribute to the emerging discussion on technology protectionism. |
| Keywords: | discrimination; indigenous innovation; national treatment principle; standard-essential patent; technology protectionism |
| JEL: | F53 F68 K39 L52 L63 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:iip:wpaper:21&r=com |
| By: | KhafidzinAli, M. |
| Abstract: | The convergence of media is one of the development of mass media that involve many technological factors in it. The existence of the internet encourages the media to apply the concept of convergence of media such as online media, e-paper, e-books, social media, and others. Competition in the media business is one factor driving the mass media to apply this concept because the mass media today does not merely rely on printed formarts like as newspapers, magazines, books alone. Media convergence innovation is deemed necessary so that the mass media be able to remain competitive in today's media business era. As one of the innovations in mass media, media convergence requires a variety of processes and stages in the application. This paper will explore th process of diffusion of convergence innovation in the daily news Pikiran Rakyat. This qualitative study describes how media convergence is adopted by the mass media in stages. |
| Date: | 2022–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:tdhwr&r=com |
| By: | Charles Angelucci (MIT - Massachusetts Institute of Technology); Julia Cagé (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Michael Sinkinson (Yale University [New Haven], NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research) |
| Abstract: | Technological innovations in content delivery, such as the advent of broadcast television or of the Internet, threaten local newspapers' ability to bundle their original local content with third-party content such as wire national news. We examine how the entry of television-with its initial focus on national news-affected local newspapers as well as consumer news diets in the United States. We construct a novel dataset of U.S. newspapers' economic performance and content choices from 1944 to 1964 and exploit quasi-random variation in the rollout of television to show that this new technology was a negative shock in both the readership and advertising markets for newspapers. Newspapers responded by providing less content, particularly local news. We tie this change towards increasingly nationalized news diets to an increase in party vote share congruence between Congressional and Presidential elections. |
| Keywords: | Media, Local News, Television, Newspapers, Advertising, Bundling, Split-Ticket Voting |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03880088&r=com |
| By: | Bertin Martens |
| Abstract: | This paper explores several pro- and anti-competitive provisions included the proposed EU Data Act. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:node_8645&r=com |
| By: | Claudio Luccioletti (CEMFI, Centro de Estudios Monetarios y Financieros) |
| Abstract: | Workers in larger cities are paid higher wages. The city-size wage premium may reflect the productivity gains from agglomeration or sorting of more productive workers in densely populated areas. However, local labor markets in large cities have more firms and are expected to be more competitive, which could also generate part of the urban earnings premium. I quantify the importance of this channel with rich administrative data for Spain using a spatial equilibrium model to guide the empirical strategy. To address the identification challenge posed by labor market power and wages moving endogenously with unobserved local productivity shocks, I first control for firms’ revenues per worker and for time trends that are heterogeneous across local labor markets. I then develop a new instrumental variable that leverages quasi-experimental variation in monopsony power stemming from changes over time in the size of local public firms. I conclude that 20–30% of the city-size wage premium and 6–15% of the employment gap between small and large cities can be attributed to differences in labor market power across locations. |
| Keywords: | Labor market power, city sizes, wage premium. |
| JEL: | R10 J42 R23 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2022_2214&r=com |
| By: | Johannes Boehm (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEP - LSE - Centre for Economic Performance - LSE - London School of Economics and Political Science); Swati Dhingra (CEP - LSE - Centre for Economic Performance - LSE - London School of Economics and Political Science, CEPR - Center for Economic Policy Research - CEPR); John Morrow (King‘s College London, CEP - LSE - Centre for Economic Performance - LSE - London School of Economics and Political Science, CEPR - Center for Economic Policy Research - CEPR) |
| Abstract: | Resource-based theories propose that firms grow by diversifying into products that use common capabilities. We provide evidence for common-input capabilities, using a policy that removed entry barriers in input markets to show that the similarity of a firm's and an industry's input mix determines firm production choices. We model industry choice and economies of scope from input capabilities. When the model is estimated for Indian manufacturing, input complementarities make firms 5% more likely to produce in an industry and are quantitatively as important as time-invariant drivers of coproduction rates. Upstream entry barriers were equivalent to a 9.5% tariff on inputs. |
| Keywords: | Multiproduct firms, firm capabilities, vertical input linkages, comparative advantage, economies of scope, size-based policies |
| Date: | 2021–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03877257&r=com |