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on Industrial Competition |
| By: | Donna, Javier; Pereira, Pedro |
| Abstract: | The 2023 Merger Guidelines (MGs) change the Agencies’ narrative regarding non-horizontal mergers. They follow a four-pronged approach: (1) They blend horizontal and non-horizontal mergers. (2) They simplify the narrative about non-horizontal mergers. (3) They consoli- date and broaden the theories of harm in non-horizontal mergers. (4) They blend economics and law analysis. In this article, we elaborate on these points. We discuss how the MGs’ an- ticompetitive presumptions apply to non-horizontal mergers, relate them to the economics literature, and provide examples. We finish discussing the economic rationale of the struc- tural presumption involving rivals’ exit concerns due to the exercise of market power and propose a path forward. |
| Keywords: | Antitrust, 2023 Merger Guidelines, Vertical Mergers, Rivals' Exit, Double Marginalization, Merger Evaluation, Competition Policy |
| JEL: | K21 K41 K42 L44 L52 |
| Date: | 2024–05–20 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121615 |
| By: | Kim, Hyunsoo (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Yea, Sangjun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kang, Minji (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | 이 연구에서는 데이터가 디지털플랫폼 경쟁에 미치는 영향을 살펴본다. 디지털플랫폼이 사업을 운영하면서 획득한 사용자 데이터를 통해 서비스의 질적 향상에 기여한다면, 시장경쟁에 어떤 영향을 미치는지에 대해 동태분석한다. 연구결과를 바탕으로 데이터 독점으로 인한 글로벌 디지털플랫폼의 시장 지배력을 완화하고 디지털 생태계의 개방성을 보호하기 위한 정책을 수립하는 데 고려해야 할 사항을 제시한다. Recent regulatory proposals on competition in digital markets, such as the EU's Digital Markets Act and Digital Services Act, emphasize the importance of ensuring fair competition in markets to sustain innovation and avoid long-term monopolies. There is a growing concern that markets are becoming increasingly concentrated, with a small number of data-rich companies gaining prominent positions in horizontally or vertically linked markets and large user bases. This report identifies considerations for introducing policies to mitigate the market power of data-rich global digital platforms and protect the openness of digital ecosystems for potential new entrants. To this end, we examine data-related regulatory trends in major countries and theoretically discuss the implications for inter-platform competition when data gives digital platforms a competitive advantage. We then focus on data portability, the most prominent data-related regulation of digital platforms, to explore the impact of data portability regulation on digital platform competition. This study largely consists of five main parts. Chapter 2 outlines the basic characteristics of the platform economy, including its multi- sided nature and indirect network effects, and describes the role of data in the platform economy, in order to better understand the discussion that follows. Indirect externalities are prominent in digital platforms, which are intermediaries that allow multiple independent groups of economic actors to interact through digital connectivity, due to their two-sided market nature. If one side can initially attract a certain number of people to the platform, it becomes easier for both sides to attract additional platform users in a virtuous cycle through indirect network effects, making it easier for market tipping than in other markets. In these digital platform markets, data is utilized to improve the quality of services provided by the digital platforms and to expand their user base. Digital platforms collect, process, and analyze personal-level data generated from users' interactions with the platform after obtaining their consent. As more data is accumulated, search and recommendation results are tailored to the user, which increases the utility or profitability of the platform for both users and merchants. Digital platforms can also collect and use data to create new business opportunities. By merging with other digital platforms, or by entering the market for complementary services, digital platforms can create additional commercial value by combining their own data with that of other platforms. (the rest omitted) |
| Keywords: | data concentration; digital platforms; regulation; platform economy |
| Date: | 2023–12–30 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieppa:2023_030 |
| By: | Chad Syverson |
| Abstract: | Interest in market power has recently surged among economists in many fields, well beyond its traditional home in industrial organization. This has focused empirical attention on markups, the ratios of price to marginal cost in product markets, and markdowns, the ratios of inputs’ marginal products to their paid wage in factor markets. In this review, I offer a conceptual overview of both metrics and survey recent research examining them. I pay particular attention to the distinct interests that microeconomists and macroeconomists have had regarding these metrics, as well as topics that have bridged and are bridging these often distinct literatures. |
| JEL: | D4 E3 L0 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32871 |
| By: | Suguru Otani (Market Design Center, University of Tokyo and Junior Research Fellow, Research Institute for Economics & Business Administration (RIEB), Kobe University, JAPAN) |
| Abstract: | I investigate how explicit cartels, known as "shipping conferences", in a global container shipping market facilitated the formation of one of the largest globally integrated markets through entry, exit, and shipbuilding investment of shipping firms. Using a novel data, I develop and construct a structural model and find that the cartels shifted shipping prices by 20-50% and encouraged firms' entry and investment. In the counterfactual, I find that cartels would increase producer surplus while slightly decreasing consumer surplus, then may increase social welfare by encouraging firms' entry and shipbuilding investment. This would validate industry policies controlling prices and quantities in the early stage of the new industry, which may not be always harmful. Investigating hypothetical allocation rules supporting large or small firms, I find that the actual rule based on tonnage shares is the best to maximize social welfare. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:kob:dpaper:dp2024-28 |
| By: | Rim Lahmandi-Ayed (CUT - Centre for Unframed Thinking - ESC [Rennes] - ESC Rennes School of Business); Didier Laussel (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, EHESS - École des hautes études en sciences sociales) |
| Abstract: | div>We study a simple model in which two vertically differentiated firms compete in prices and mass advertising on an initially uninformed market. Consumers differ in their preference for quality.There is an upper bound on prices since consumers cannot spend more on the good than a fixed amount (say, their income). Depending on this income and on the ratio between the advertising cost and quality differential (relative advertising cost), either there is no equilibrium in pure strategies or there exists one of the following three types: (1) an interior equilibrium, where both firms have positive natural markets and charge prices lower than the consumer's income; (2) a constrained interior equilibrium, where both firms have positive natural markets, and the high-quality firm charges the consumer's income or (3) a corner equilibrium, where the low-quality firm has no natural market selling only to uninformed customers. We show that no corner equilibrium exists in which the high-quality firm would have a null natural market. At an equilibrium (whenever there exists one), the high-quality firm always advertises more, charges a higher price and makes a higher profit than the low-quality one. As the relative advertising cost goes to infinity, prices become equal and the advertising intensities converge to zero as well as the profits. Finally, the advertising intensities are, at least globally, increasing with the quality differential. Finally, in all cases, as the advertising parameter cost increases unboundedly, both prices converge increasingly towards the consumer's income. |
| Keywords: | random advertising, advertising cost, vertical differentiation |
| Date: | 2024–03–22 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04678637 |
| By: | Christos Genakos; Blair Yuan Lyu; Mario Pagliero |
| Abstract: | We study the retail price pass-through of four major tax changes in petroleum products using daily pricing data from gas stations on small Greek islands. We find that (i) the pass-through of the tax hikes is five times higher than for the tax decrease, (ii) the pass-through of the tax hikes increases with competition, while that of the tax decrease does not, (iii) there is significant asymmetry in the speed of price adjustments, and, (iv) the asymmetric price adjustment cannot be explained by tacit collusion, instead the evidence suggests that search is the most plausible explanation. We dedicate this paper to the loving memory of Mario Pagliero, a brilliant economist and a dear friend, who passed away too soon. |
| Keywords: | pass-through, rockets and feathers, tax incidence, gasoline market, market structure, competition |
| Date: | 2024–08–30 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2028 |
| By: | Trang T. Hoang; Devashish Mitra; Hoang Pham |
| Abstract: | We examine the impact of an export market expansion created by the US-Vietnam Bilateral Trade Agreement (BTA) on labor market competition among Vietnamese manufacturing firms. We measure distortionary wedges between equilibrium marginal revenue products of labor (MRPL) and wages nonparametrically and find that the median firm pays workers 59% of their MRPL. The BTA permanently decreases labor market distortion in manufacturing by 3.4%, mainly for domestic private firms. The median distortion is 26% higher for women than men, and the decline in distortion for women drives the overall distortion reduction. We shed some light on the mechanisms for these results. |
| Keywords: | International Trade; Export Market Access; Labor Market Distortion; Misallocation; Income Distribution; Labor Share; Gender Inequality; Monopsony; Oligopsony |
| JEL: | F16 F63 O15 O24 J42 J16 |
| Date: | 2024–08–09 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:1394 |
| By: | Yating Liu (Nanjing University of Aeronautics and Astronautics); Zhang Qing (Nanjing University of Aeronautics and Astronautics); Xiao Qiuying (Nanjing University of Aeronautics and Astronautics) |
| Abstract: | With the change of consumers' concepts, the popularity of online shopping and the strong publicity of online platforms, nearly expired food is more and more accepted by consumers. Since nearly expired food is featured with lower selling price as it approaches the shelf life, this paper investigates the dynamic pricing strategy of expired food in two stages. At the same time, considering that different supply chain power structures also have different impacts on the pricing of nearly expired food, this paper will explore the dual-channel dynamic pricing strategies under different power structures. In this paper, the dynamic pricing model of the two-channel supply chain of nearly expired food is constructed under manufacturers' dominance and mixed dominance of manufacturers and network platforms respectively, and the two-stage optimal pricing and optimal profit are solved according to the game theory. It is found that there exists a two-stage optimal pricing strategy to maximize supply chain profits. The two-stage pricing of nearly expired food in the dual-channel under the mixed dominance is smaller than that under the manufacturer's dominance. The total manufacturer profit and total retailer profit of both stages are larger in the manufacturer-dominated dual-channel supply chain model, but the manufacturer's profit from online channel sales is higher in the mixed-power-dominated model than in the manufacturer-power-dominated model. Suppliers of nearly expired food can choose the appropriate channel to sell according to the product characteristics. Finally, by solving the centralized decision-making model for the dual-channel supply chain of nearly expired food, it is obtained that under the centralized decision-making, although the pricing in both stages is lower than the decentralized decision-making mentioned above, the total profit of the supply chain is the highest, which indicates that manufacturers and retailers can achieve higher profits by developing revenue-sharing contracts, reducing channel competition, and adopting cooperative pricing. |
| Keywords: | nearly expired food; dynamic pricing; dual-channel supply chain; power structures |
| URL: | https://d.repec.org/n?u=RePEc:sek:iefpro:14416201 |
| By: | Bianchi, Milo; Yamashita, Takuro |
| Abstract: | We analyze the optimal investment in a common infrastructure in a market with network externalities. Taking a dynamic mechanism design perspective, we contrast the level of investment and the associated payments across firms that a budget-constrained welfare-maximizing principal would set to those emerging in an unregulated market. We consider two market scenarios: first, a nascent market in which only one firm operates and an entrant may arrive at a later stage; second, a more mature market in which two firms already operate. In these settings, the principal needs to set access fees so as to provide enough incentives to invest in the infrastructure, while also avoiding wasteful investment. At the same time, the principal needs to coordinate investment and usage of the shared network given the various externalities that each firm exerts. We highlight the relative importance of these two aspects and how regulation can be designed so as to improve social welfare. We also highlight how the optimal timing of investment depends crucially on the regulator’s coordination power. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129665 |
| By: | Bernasconi, Mario (Tilburg University, School of Economics and Management) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:tiu:tiutis:c26b3dfe-a2d3-4c31-b0fc-fde5397a3eb3 |
| By: | Susan J. Méndez (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne); Jongsay Yong (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne); Hugh Gravelle (Centre for Health Economics, University of York, England); Anthony Scott (Centre for Health Economics, Monash University) |
| Abstract: | We examine the pricing behaviour of medical specialists in a setting where fees are unregulated and patients receive a fixed subsidy from the government. We use eight years of specialist-level panel data from the Medicine in Australia Balancing Employment and Life (MABEL) survey. We find that local competition is not associated with a specialist’s willingness to accept the fixed subsidy as full payment nor with the level of fee charged above the subsidy. Instead, we show that fees are associated with specialists’ personality traits. Specialists who score more highly on agreeableness are more likely to accept the government subsidy as full payment, while those who score more highly on conscientiousness and neuroticism are less likely to do so. Furthermore, higher neuroticism scores are associated with higher fees. |
| Keywords: | medical specialists, prices, fees, behaviour, competition |
| JEL: | I11 I13 L1 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iae:iaewps:wp2024n11 |
| By: | De Loecker, Jan; Obermeier, Tim; Van Reenen, John |
| Abstract: | We review the existing literature on falling business dynamism and present a new analysis using comprehensive UK firm-level panel data. Since the mid-1990s, there has been a large increase in UK firm-level inequality (especially in the upper tails) of productivity, wages, markups and labour shares, similarly to the USA. We suggest a simple theoretical framework for understanding some of these trends and quantitatively analyse why, despite increasing markups, the UK labour share has not fallen as sharply as that in the USA. Finally, we suggest some policy options in response to these worrying trends, including modernizing competition rules to deal with the growth of superstar firms and strengthening worker bargaining power. |
| Keywords: | OUP deal |
| JEL: | J1 |
| Date: | 2024–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:121234 |