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on Industrial Competition |
| By: | Enghin Atalay; Alan T. Sorensen; Christopher J. Sullivan; Wanjia Zhu |
| Abstract: | We examine merging firms' additions and removals of products for a sample of 66 mergers across a wide variety of consumer packaged goods markets. We find that mergers lead to a net reduction in the number of products offered by merging firms. Merging firms tend to both drop and add products at the periphery of their joint product portfolios, with the net effect of increasing within-firm product similarity. These results are consistent with theories of the firm that emphasize cost synergies among similar types of products or managerial core competencies linked to particular segments of the product market. |
| JEL: | L0 L1 L10 L13 L21 L22 L23 L25 L4 L40 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31229&r=com |
| By: | Martin Peitz; Susumu Sato |
| Abstract: | We propose a tractable model of asymmetric platform oligopoly. Users from two distinct groups who are subject to within-group and cross-group network effects decide which platform to join. We characterize the equilibrium when platforms manage user access by setting participation fees. We explore the effects of platform entry, change of incumbent platforms’ quality under free entry, and partial compatibility on market outcomes. We show how the analysis can be extended to partial user participation and zero fees for one of the user groups. |
| Keywords: | oligopoly theory; aggregative games; network effects; two-sided markets; two-sided single-homing; free entry; compatibility |
| JEL: | L13 L41 D43 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2023_428&r=com |
| By: | Vanessa I. Alviarez; Michele Fioretti; Ken Kikkawa; Monica Morlacco |
| Abstract: | We develop a quantitative theory of prices in firm-to-firm trade with bilateral negotiations and two-sided market power. Markups reflect oligopoly and oligopsony forces, with relative bargaining power as weight. Cost pass-through elasticities into import prices can be incomplete or complete, depending on the exporter's and importer's bargaining power and market shares. In U.S. import data, we find that U.S. importers have substantial market power and disproportionate leverage in price negotiations. The estimated model produces accurate predictions of the impact of Trump tariffs on pair-level prices. At the aggregate level, ignoring two-sided market power could exaggerate tariff pass-through by about 60%. |
| JEL: | F12 L14 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31253&r=com |
| By: | Lin William Cong; Siguang Li |
| Abstract: | With the rise of social media and streaming platforms, firms and brand-owners increasingly depend on influencers to attract consumers, who care about both common product quality and consumer-influencer interaction. Sellers thus compete in both influencer and product markets. As outreach and distribution technologies improve, influencer payoffs and income inequality change non-monotonically. More powerful influencers sell better-quality products, but pluralism in style mitigates market concentration by effectively differentiating consumer experience. Influencer style dispersion substitutes horizontal product differentiation but serves as either complement (small dispersion) or substitute (large dispersion) to vertical product differentiation. The assortative matching between sellers and influencers remains under endogenous influence-building, with the maximal differentiation principle recovered in the limit of costless style acquisition. Meanwhile, influencers may under-invest in consumer outreach to avoid exacerbating price competition. Finally, while requiring balanced seller-influencer matching can encourage seller competition, uni-directional exclusivity can improve welfare for sufficiently differentiated products and uncrowded influencer markets. |
| JEL: | L11 L20 L51 M31 M37 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31243&r=com |
| By: | Micael Castanheira De Moura; Georges Siotis; Carmine Ornaghi |
| Abstract: | Competition investigations start with market definition, which establishes the perimeter of the competitive analysis. In this paper, we focus on the definition of economic markets in the pharmaceutical industry, where the entry of generics in different therapeutic areas provides a sequence of quasi-natural experiments involving a significant competitive shock for the originator producer. We show how generic entry modifies price and non-price competitive constraints over time, generating market-wide effects. Paradoxically, generic entry may soften the competitive pressure for brands other than the originator. We obtain these results by econometrically estimating time-varying price elasticities. We then apply the logic of the Hypothetical Monopolist Test to gauge the strength of competitive constraints under different market structures. Our results provide strong empirical support for an approach that defines relevant markets contingent on the theory of harm. We discuss the relevance of these findings in the context of ongoing cases. |
| Keywords: | market definition; competition policy; antitrust; pharmaceutical industry |
| JEL: | D22 I11 L13 |
| Date: | 2023–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/353440&r=com |
| By: | Granlund, David (Department of Economics, Umeå University); Rudholm, Niklas (Handelns Forskningsinstitut) |
| Abstract: | We present a new method for estimating the probability of collusion using observed price patterns. Having these probabilities, we can estimate the impact of the number of firms and other relevant variables on collusion as well as estimate how collusion affects prices in the market. We find that the most common form of collusion in our dataset is bid-rotation (i.e., firms taking turns in offering the lowest price in the market). Depending on specification, we find that moving from competition to collusion increases average prices by 30–65%, resulting in overcharges of between 375 and 694 million SEK (33 to 61 million USD). For two reasons, the total overcharge would be severely underestimated if we grouped observations with a likelihood of collusion below 90% and treated them as competitive, as is done in many previous studies. First, approximately half of the sales predicted to be affected by collusion are in markets with a probability of collusion below 90%. Second, the price effect of collusion is underestimated when the comparison group also contains collusive markets. Finally, our results demonstrate that multimarket contact significantly increases the risk of collusion and that increasing the number of firms from two to four reduces the risk of collusion by approximately one half. |
| Keywords: | bid rigging; price coordination; cartels; collusion screening; competition |
| JEL: | C57 D22 D44 I11 L41 |
| Date: | 2023–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:1014&r=com |
| By: | Sweeney, Richard L. |
| Abstract: | The 1990 Clean Air Act Amendments imposed extensive restrictions on refined petroleum product markets, requiring select end users to purchase new cleaner versions of gasoline and diesel. I estimate the impact of this intervention on refining costs, product prices and consumer welfare. Isolating these effects is complicated by several challenges likely to appear in other regulatory settings, including overlap between regulated and non-regulated markets and deviations from perfect competition. Using a rich database of refinery operations, I estimate a structural model that incorporates each of these dimensions, and then use this cost structure to simulate policy counterfactuals. I find that the policies increased gasoline production costs by 7 cents per gallon and diesel costs by 3 cents per gallon on average, although these costs varied considerably across refineries. As a result of these restrictions, consumers in regulated markets experienced welfare losses on the order of $3.7 billion per year, but this welfare loss was partially offset by gains of $1.5 billion dollars per year among consumers in markets not subject to regulation. The results highlight the importance of accounting for imperfect competition and market spillovers when assessing the cost of environmental regulation. |
| Date: | 2023–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-23-19&r=com |
| By: | Selcuk, Cemil (Cardiff Business School) |
| Abstract: | Fixed-price selling is common in todayís markets. While previous research in marketing and economics literatures provide several intuitive reasons for the emergence of fixed-price selling (e.g. clarity and simplicity of managing the fixed-price process, reduced coordination and information costs) our study offers an entirely different rationale —— based on market competition and trade frictionsó that explains the prevalence of fiixed-price selling. Using a market equilibrium approach, and employing a novel competitive search framework to account for a fully competitive and dynamic market, we offer a new and micro-founded account for the widespread use of fixed pricing policy. Considering three important market characteristics—— customer risk aversion, the degree of trade frictions and the level of market competition —— we explore the strategic choice between the fixed-price, best-offer, and over-the-sticker pricing policies. Unlike the standard models in the literature, which are based Hotelling, Cournot, Bertrand frameworks, the competitive search framework enables us to model competition with a large number of buyers and sellers, and to vary the degree of competition accordingly. We find that fixed pricing emerges as the unique or the de-facto selling rule in most parameter regions. Indeed, the only region where haggling matters is the case in which customers are risk neutral and trade frictions are significant and market competition is moderate |
| Keywords: | fixed-price selling, haggling, risk aversion, trade friction, competition |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2023/18&r=com |
| By: | Enghin Atalay; Erika Frost; Alan T. Sorensen; Christopher J. Sullivan; Wanjia Zhu |
| Abstract: | We study changes in markups across 72 product markets from 2006 to 2018. A growing literature has documented a rise in markups over time using a production function approach; we instead employ the standard microeconomic method, which is to estimate demand and then invert firms’ first-order pricing conditions to infer their markups. To make the method scalable, we propose estimating nested logit demand models, using household panel data to automate the assignment of products to nests. Our results indicate an overall upward trend in markups between 2006 and 2018, with considerable heterogeneity across and within product markets. We find that changes in firms’ marginal costs and households’ price sensitivity are the primary drivers of markup increases, with changes in firm ownership playing a much smaller role. |
| JEL: | L0 L1 L10 L11 L13 L16 L2 L20 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31230&r=com |
| By: | Brown, David P. (University of Alberta, Department of Economics); Cajueiro, Daniel O. (University of Brasilia); Eckert, Andrew (University of Alberta, Department of Economics); Silveira, Douglas (University of Alberta, Department of Economics) |
| Abstract: | Information and data transparency have been shown to have an important impact on competitive behavior and market outcomes. Market transparency can enhance competition by allowing firms to respond efficiently to a changing market environment. However, a high degree of information can facilitate coordination by enhancing communication and the monitoring of rival behavior. A recent example highlighting concerns over the use of publicly available information to communicate across firms involves the Alberta wholesale electricity market. This market used to release anonymized information on firms’ pricing strategies in near real-time. Allegations were raised that firms were using unique patterns in their prices to reveal their identities to rival firms and coordinate on higher prices. This paper uses machine learning techniques to investigate how firms could use anonymized publicly available information to communicate with their rivals. These techniques can be employed as a possible screen to evaluate whether publicly available information can be used to identify rival behavior and facilitate coordination. Based on these results, regulators can determine if the degree of market transparency is detrimental to market competition. |
| Keywords: | Machine Learning; Electricity; Market Power; Competition Policy |
| JEL: | D43 L13 L50 L94 Q40 |
| Date: | 2023–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2023_006&r=com |
| By: | Rhodes, Andrew |
| Abstract: | Drip pricing arises when a firm initially advertises a low price, then reveals additional fees as the consumer advances through the purchase process. We give examples of firms that have been pursued for engaging in drip pricing. We summarize theoretical papers on the topic, emphasizing the importance of whether drip prices are optional or mandatory, as well as the degree of consumer sophistication. We also discuss empirical papers which examine how consumers respond to drip pricing, and which examine how the ability to do drip pricing affects firm profitability. False advertising arises when firms make false claims about the “quality” of their product, which in turn cause consumers to pay more than they otherwise might. We give examples of firms that have been pursued for making such false claims. We summarize theoretical papers on the topic, emphasizing that it may not be optimal for consumers or society to impose very large fines for false advertising. For example, we argue this can be true when consumers are sophisticated and the market is relatively healthy. We also discuss empirical evidence which shows that false advertising can affect consumers’ purchase behavior, and that firms are more likely to use it when the returns are higher. |
| Keywords: | Drip pricing, Add-ons; Obfuscation, Deception; False Advertising, Regulation |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:128073&r=com |
| By: | McShane, William |
| Abstract: | Competition in the U.S. appears to have declined. One contributing factor may have been heterogeneity in the availability of credit during the financial crisis. I examine the impact of product market peer credit constraints on long-run competitive outcomes and behavior among non-financial firms. I use measures of lender exposure to the financial crisis to create a plausibly exogenous instrument for product market credit availability. I find that credit constraints of product market peers positively predict growth in sales, market share, profitability, and markups. This is consistent with the notion that firms gained at the expense of their credit constrained peers. The relationship is robust to accounting for other sources of inter-firm spillovers, namely credit access of technology network and supply chain peers. Further, I find evidence of strategic investment, i.e. the idea that firms increase investment in response to peer credit constraints to commit to deter entry mobility. This behavior may explain why temporary heterogeneity in the availability of credit appears to have resulted in a persistent redistribution of output across firms. |
| Keywords: | financial crisis, instrumental variables, long-run effects, spillovers, strategic behavior |
| JEL: | G01 G21 G30 L11 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:102023&r=com |
| By: | Siddhartha Banerjee; Kamesh Munagala; Yiheng Shen; Kangning Wang |
| Abstract: | A seller is pricing identical copies of a good to a stream of unit-demand buyers. Each buyer has a value on the good as his private information. The seller only knows the empirical value distribution of the buyer population and chooses the revenue-optimal price. We consider a widely studied third-degree price discrimination model where an information intermediary with perfect knowledge of the arriving buyer's value sends a signal to the seller, hence changing the seller's posterior and inducing the seller to set a personalized posted price. Prior work of Bergemann, Brooks, and Morris (American Economic Review, 2015) has shown the existence of a signaling scheme that preserves seller revenue, while always selling the item, hence maximizing consumer surplus. In a departure from prior work, we ask whether the consumer surplus generated is fairly distributed among buyers with different values. To this end, we aim to maximize welfare functions that reward more balanced surplus allocations. Our main result is the surprising existence of a novel signaling scheme that simultaneously $8$-approximates all welfare functions that are non-negative, monotonically increasing, symmetric, and concave, compared with any other signaling scheme. Classical examples of such welfare functions include the utilitarian social welfare, the Nash welfare, and the max-min welfare. Such a guarantee cannot be given by any consumer-surplus-maximizing scheme -- which are the ones typically studied in the literature. In addition, our scheme is socially efficient, and has the fairness property that buyers with higher values enjoy higher expected surplus, which is not always the case for existing schemes. |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2305.07006&r=com |
| By: | Andrei Matveenko; Egor Starkov |
| Abstract: | This paper argues, in the context of targeted advertising, that receivers’ ability to independently acquire information has a non-trivial impact on the sender’s optimal disclosure strategy. In our model, a monopolist has an opportunity to launch an advertising campaign and chooses a targeting strategy – which consumers to send its advertisement to. The consumers are uncertain about and heterogeneous in their valuations of the product, and can engage in costly learning about their true valuations. We discover that the firm generally prefers to target consumers who are either indifferent between ignoring and investigating the product, or between investigating and buying it unconditionally. If the firm is uncertain about the consumer appeal of its product, it targets these two distinct groups of consumers simultaneously but may ignore all consumers in between. |
| Keywords: | advertising, targeting, rational inattention, costly disclosure |
| JEL: | D83 L15 M37 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2023_425&r=com |
| By: | Boehm, Johannes; Dhingra, Swati; Morrow, John |
| Abstract: | Resource based theories propose that firms grow by diversifying into products which 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 industry’s input mix determine firm production choices. We model industry choice and economies of scope from input capabilities. Estimating the model 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 co-production rates. Upstream entry barriers were equivalent to a 9.5% tariff on inputs. |
| Keywords: | multiproduct firms; firm capabilities; vertical input linkages; comparative advantages; economies of scope; size-based policies; LSE - TISS - TATA Grant; Starting Grant 760037 |
| JEL: | R14 J01 L81 |
| Date: | 2022–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:115137&r=com |
| By: | Mario Bernasconi; Miguel Espinosa; Rocco Macchiavello; Carlos Suarez |
| Abstract: | Under collusion, firms deviate from current profit maximization in anticipation of future rewards. As current profit maximization places little restrictions on firms’ pricing behaviour, collusive conduct is hard to infer. We show that bids from certain firms in the Colombian wholesale electricity market collapsed immediately after the announcement, and before the implementation, of a reform that potentially made collusion harder to sustain. After ruling out confounders, we uncover how the cartel functioned and how firms may have communicated. Calibrating the dynamic enforcement constraint confirms that collusion was sustainable before, but not after, the reform. The conclusions discuss policy implications. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10384&r=com |
| By: | Lou, Youcheng; Rahi, Rohit |
| Abstract: | We study a financial market in which agents with interdependent values bid for a risky asset. Some agents are privately informed of their own value for the asset while others seek to infer it from the equilibrium price. Due to adverse selection, uninformed agents are less willing than the informed to provide liquidity, and engage in greater bid shading when prices are more informative. While increased participation by informed agents leads to perfect competition in the limit, the market remains illiquid to some degree even with free entry of uninformed traders. The incentive to produce information is increasing in market size and is maximal in a perfectly competitive economy. Price informativeness, on the other hand, is independent of market size. Curtailing information production by one group can reduce adverse selection, and improve liquidity and welfare for all agents. |
| Keywords: | double auction; interdependent values; market power; adverse selection; information acquisition; welfare |
| JEL: | D82 G14 |
| Date: | 2021–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:118843&r=com |
| By: | Mariana Spatareanu |
| Abstract: | Chinese multinationals’ acquisitions of Western firms have increased dramatically in recent years. However, relatively little is known about the effects of these acquisitions on the acquirers’ innovation. Using Chinese acquisitions in Western countries during 2000-2017 and applying matching and difference in difference methods we find that Chinese acquirers innovate more after acquisitions. Their patenting activity significantly picks up after the acquisitions of high-tech firms in developed countries. The results give support to the widespread view that Chinese companies are acquiring foreign technologies through acquisitions; they also show that Chinese companies successfully transfer and incorporate the newly acquired technologies at home, especially if the parent company was an innovator before the acquisition. The results also show that the degree of product complexity of the target firms matters and increases the innovation activity of Chinese acquirers. |
| Keywords: | M&As, emerging markets MNEs, innovation |
| JEL: | F23 O31 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:run:wpaper:2023-002&r=com |
| By: | Dipankar Das (Assistant Professor, BML Munjal University); Vivek Sharadadevi Jadhav ((Corresponding author), Ph.D. Scholar, Madras School of Economics, Chennai, India) |
| Abstract: | The primary objective of the paper is to identify the pattern of non-linear pricing in the E-Commerce market and its usage. This paper also investigates whether the post-digitalization tying as a non-linear pricing strategy is an option or a compulsion, through formation of trust. Das and Jadhav (2021) take effort to understand the non-linear pricing in modern e-commerce. This work takes similar effort to analyse the usage of non-linear pricing by e-commerce firms. The researchers have used theoretical model using empirical evidence to find a new pattern of non-linear pricing strategy and its impact on e-commerce market behaviour. |
| Keywords: | Non-linear Pricing, Trust, Antitrust Law, E-Commerce, Fuzzy preference |
| JEL: | L11 L41 L81 |
| URL: | http://d.repec.org/n?u=RePEc:mad:wpaper:2021-209&r=com |
| By: | Marco Guerzoni; Luigi Riso; Marco Vivarelli |
| Abstract: | Using both regression analysis and an unsupervised graphical model approach (never applied before to this issue), we confirm the rejection of the Gibrat’s law when our firm-level data are considered over the entire investigated period, while the opposite is true when we allow for market selection. Indeed, the growth behavior of the re-shaped (smaller) population of the survived most efficient firms is in line with the Law of Proportionate Effect; this evidence reconciles early and current literature testing Gibrat’s law and may have interesting implications in terms of both applied and theoretical research. |
| Keywords: | Gibrat’s Law, firm survival, market selection, firm growth |
| JEL: | L11 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:514&r=com |
| By: | Jääskeläinen, Atte; Yanatma, Servet; Ritala, Paavo |
| Abstract: | Digital platforms have disrupted traditional news organizations, with new platform-based models gaining ground. However, the incumbents can defend their positions and reap the benefits of multi-sided market structures by establishing a platform business model themselves. We examine a case study of the Austrian News Agency (APA), which gradually formulated a strategy that resulted in a platform-based business model. Platform features were strategized and innovated over time and in phases, with the intent of creating value for customers on both sides of the platform. We found that APA’s platform transformation was enabled by a visionary value proposition backed by a trusted institution’s legitimacy and a co-operative organizational model that provided added incentives for the participating news media companies. The strategy and the business model emerged on the basis of external developments and internal realizations concerning the feasibility of the new platform strategy. Based on our results, we develop a framework for an incumbent strategy formation process towards a platform business model. This framework demonstrates the incumbent organization’s emergent, as well as deliberate, strategic ability to introduce platform features into its business model, based on unique intra-firm synergies with established parts of the business, and highlighting a potential for “incumbent advantage.” |
| Keywords: | platform business model; digital platform; strategy; platformization; news media; Austrian News agency; Knowledge Exchange and Impact Fund |
| JEL: | R14 J01 |
| Date: | 2021–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:112560&r=com |
| By: | Anderson, Edward (University of Sydney Business School, Australia, and Imperial College Business School); Holmberg, Pär (Research Institute of Industrial Economics (IFN)) |
| Abstract: | We study multi-unit auctions where bidders have single-unit demand and asymmetric information. For symmetric equilibria, we identify circumstances where uniform-pricing is better for the auctioneer than pay-as-bid pricing, and where transparency improves the revenue of the auctioneer. An issue with the uniform-price auction is that seemingly collusive equilibria can exist. We show that such outcomes are less likely if the traded volume of the auctioneer is uncertain. But if bidders are asymmetric ex-ante, then both a price floor and a price cap are normally needed to get a unique equilibrium, which is well behaved. |
| Keywords: | Multi-unit auction; Single-unit demand; Uniform pricing; Pay-as-bid; Asymmetric information; Publicity effect |
| JEL: | C72 D44 D82 |
| Date: | 2023–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1460&r=com |
| By: | Navin Kartik; Weijie Zhong |
| Abstract: | A seller posts a price for a single object. The seller's and buyer's values may be interdependent. We characterize the set of payoff vectors across all information structures. Simple feasibility and individual-rationality constraints identify the payoff set. The buyer can obtain the entire surplus; often, other mechanisms cannot enlarge the payoff set. We also study payoffs when the buyer is more informed than the seller, and when the buyer is fully informed. All three payoff sets coincide (only) in notable special cases -- in particular, when there is complete breakdown in a ``lemons market'' with an uninformed seller and fully-informed buyer. |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2305.02994&r=com |
| By: | Diego Jimenez-Hernandez; Enrique Seira |
| Abstract: | Governments spend considerable resources providing goods directly. We show that such behavior may increase welfare when private suppliers have market power. We do this by studying the staggered rollout of hundreds of government milk “ration stores” in Mexico using a proprietary panel of household food purchases. The rollout lowered the price per liter of privately supplied milk by 2.4% and increased household consumption. To compare direct provision with budget-neutral alternatives, we develop and estimate an equilibrium model of the market that accounts for quality differences. Direct provision generates larger consumer surplus than milk vouchers and unrestricted cash transfers. |
| Keywords: | private provision; public provision; market concentration |
| JEL: | H42 L33 L44 L66 O15 |
| Date: | 2022–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:96204&r=com |
| By: | Reiner, Christian |
| Abstract: | Globale Warenketten (GWK) sind ein zentrales Merkmal der Epoche der Hyperglobalisierung. Leitunternehmen aus den ökonomischen Zentren organisieren globale Produktionsnetzwerke und Lieferanten aus dem globalen Süden produzieren gemäß deren Vorgaben. Die Vorteile daraus sind sehr ungleich verteilt. Ein wichtiger Grund hierfür ist die sehr ungleiche Verteilung von Marktmacht bzw. Wettbewerbsintensität entlang der Lieferkette. Leitunternehmen aus dem globalen Norden konnten ihre Marktmacht auf Absatzmärkten und Beschaffungsmärkten auf Kosten der Zulieferunternehmen im globalen Süden ausweiten. Institutionelle und technologische Markteintrittsbarrieren, etwa durch den zunehmenden Einsatz von immateriellen Vermögensgütern, schützen die dominante Position der Leitunternehmen. Der Aufbau einer Gegenmacht (countervailung power) im globalen Süden durch die Bildung von Genossenschaften oder Kartellen sowie eine regionale Integration und Wettbewerbspolitik erscheint zwar grundsätzlich möglich, aber voraussetzungsreich. Konflikte mit Leitunternehmen und deren Regierungen im globalen Norden sind eine mögliche Folge solcher Strategien. |
| Keywords: | Globale Warenketten, Monopolmacht, Rent-Seeking, Countervailing Power, Wettbewerbspolitik, Global value chains, monopoly power, rent-seeking, countervailing power, competition policy |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:oefsew:72&r=com |
| By: | Hegarty, Tadgh; Whelan, Karl |
| Abstract: | Online sports betting is growing rapidly around the world. We describe how the competitive structure of the bookmaking market affects odds when bettors disagree about the probabilities of the outcomes of sporting events but are on average correct. We show that the demand for bets on longshots is less sensitive to the odds than bets on favorites. This means monopolistic bookmakers will set odds exhibiting favorite-longshot bias while competitive bookmaking markets will not have this feature. We develop a version of the model for soccer matches and use these results to explain empirical findings on odds for over 80, 000 European soccer games from two different bookmaking markets. |
| Keywords: | Favorite-Longshot Bias, Monopoly, Sports Betting |
| JEL: | D42 G14 L83 |
| Date: | 2023–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117243&r=com |
| By: | Jens-Uwe Franck; Till Seyer |
| Abstract: | If an antitrust fine has been imposed on a company, the question of managerial recourse liability arises. We present court cases from the Netherlands, the UK, and Germany, in part denying managerial liability and claiming that it would undermine the fines’ deterrent effect. We analyse whether managerial liability should be limited or banned to prevent, on the one hand, the company or its shareholders being under-deterred or, on the other hand, the company’s management being over-deterred. Regarding the former, we argue that a ban of managerial liability – which would have to be accompanied by a ban on any other type of internal financial sanction – would take an indispensable governance instrument out of the hands of shareholders. This holds true despite the availability of D&O insurance. Regarding the latter, we identify risks of overdeterrence but also see mitigating mechanisms at work. We conclude that, while a restriction on managerial liability may be regarded a reasonable measure, this should be viewed as lying within the discretion of company law legislation and jurisprudence but not as a mandatory implication of antitrust fining laws. |
| Keywords: | antitrust law, cartels, antitrust fines, deterrence, managerial liability, antitrust compliance, D&O insurance, EU law, principle of effectiveness |
| JEL: | K21 K22 K42 L40 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2023_429&r=com |
| By: | Katharina Bergant; Prachi Mishra; Raghuram Rajan |
| Abstract: | We find that financial conditions in the core have significant spillover effects on cross-border mergers and acquisitions (M&As). On average, a 1 percentage point easing of the IMF US Financial Conditions Index is associated with approximately a 10% higher volume of cross-border M&As. The spillovers are stronger for countries with more liabilities denominated in foreign currency (or in US dollars). We find that the spillovers are driven by changes in US financial conditions, rather than changes in Euro Area conditions. Deals that happen when financial conditions in the US are tighter (and therefore acquisitions fewer) add more value for the acquirers, as reflected in higher acquirer excess stock returns around the announcement. |
| JEL: | G1 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31235&r=com |