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on Industrial Competition |
| By: | Chongwoo Choe (Department of Economics, Monash University); Jiajia Cong (Department of Marketing, City University of Hong Kong); Noriaki Matsushima (Institute of Social and Economic Research, Osaka University); Shiva Shekhar (Tilburg School of Economics and Management (TiSEM), CESifo Research affiliate) |
| Abstract: | Privacy regulations like the General Data Protection Regulation aim to empower consumers with greater transparency and control over their personal data. In response, firms may exercise price discrimination in the form of versioning. This paper studies how these two aspects of privacy regulation—consumer empowerment and versioning—affect market outcomes and welfare. We develop a model where firms earn revenue from sales of service and data monetization, and consumers differ in their preferences for the service and privacy costs incurred when sharing data with the firm. In a monopoly, the firm is better off after regulation because its ability to price discriminate outweighs the effects of increased consumer empowerment. In a duopoly, however, greater consumer choice after regulation intensifies competition, as firms have more ways to deviate from mutually beneficial outcomes. This results in the firm with more data monetization earning smaller profit, while the firm with less data monetization earns larger profit. However, the industry profit as a whole decreases and consumer surplus increases after the regulation. Therefore, the regulation’s impact is nuanced and depends on the market structure. We also examine the regulatory impact on firms’ optimal data-driven revenue models and market entry. |
| Keywords: | privacy regulation, privacy management, versioning, monopoly, competition |
| JEL: | D18 D61 K24 L12 L51 L86 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:mos:moswps:2025-03 |
| By: | Filippo Biondi (Düsseldorf Institute for Competition Economics); Sergio Inferrera (Queen Mary University of London, School of Economics and Finance); Matthias Mertens (Massachusetts Institute of Technology); Javier Miranda (Halle Institute for Economic Research (IWH), Friedrich-Schiller University, and CompNet) |
| Abstract: | We study changes in job reallocation in Europe after 2000 using novel micro-aggregated data that we collected for 19 European countries. In all countries, we document broad-based declines in job reallocation rates that concern most economic sectors and size classes. These declines are mainly driven by dynamics within sectors, size, and age classes rather than by compositional changes. Simultaneously, employment shares of young firms decline. Consistent with US evidence, firms’ employment has become less responsive to productivity shocks. However, the dispersion of firms’ productivity shocks has decreased too. To enhance our understanding of these patterns, we derive and apply a firm-level framework that relates changes in firms’ market power, labor market imperfections, and production technology to firms’ responsiveness and job reallocation. Using German firm-level data, we find that changes in markups and labor output elasticities, rather than adjustment costs, are key in rationalizing declining responsiveness. |
| Keywords: | Business dynamism, job reallocation, productivity, responsiveness of labor demand, market power, technology, European cross-country data |
| JEL: | D24 D43 J21 J23 J42 L11 L25 |
| Date: | 2025–03–20 |
| URL: | https://d.repec.org/n?u=RePEc:jrp:jrpwrp:2025-0004 |
| By: | World Bank |
| Keywords: | Science and Technology Development-Technology Innovation Finance and Financial Sector Development-E-Finance and E-Security |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wboper:41603 |
| By: | World Bank |
| Keywords: | Governance-Governance and the Financial Sector Information and Communication Technologies-ICT Data and Statistics Science and Technology Development-Technology Innovation Law and Development-Administrative & Regulatory Law Macroeconomics and Economic Growth-Markets and Market Access |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wboper:41608 |
| By: | Bettina Bruggemann; Zachary L. Mahone; Thomas Palmer |
| Abstract: | Ownership changes are common across firms of all sizes, and they have meaningful impacts on firm performance. Using a panel of Canadian administrative data we document that sales are an important margin in the firm life cycle, larger than exit rates for employer firms. Applying an event-study framework, we find that (a) survival rates initially decline post sale, leveling off after three years and (b) conditional on survival, profits are permanently higher. Embedding ownership changes in a model of firm dynamics, we find that 4.5% of entrants survive due to the option value of sale and that, within ten years from birth, 13% of dispersion in firm size is attributable to realized ownership changes. Moreover, ownership changes are particularly important for high productivity firms, accounting for one quarter of revenue concentration among the top 1% of businesses. |
| Keywords: | Firm Dynamics; Ownership Changes; Firm Concentration |
| JEL: | E0 L25 D22 M13 G30 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:mcm:deptwp:2025-03 |
| By: | Luria, Michal; Nicholas, Gabriel |
| Abstract: | In a wide range of industries, policymakers have considered encouraging or mandating data interoperability to facilitate more entrants and promote competition and innovation. However, some incumbents in these industries argue that interoperability would entrench existing technological design and stifle innovation. In this paper, we attempt to better understand the relationship between interoperability and innovation by looking at the case study of podcasting and the innovation that has emerged across its ecosystem. We analyze nine podcasting apps, six podcast hosting services, and five podcast directories to catalog the novel features each offers. We then organize those features, from those that best facilitate the movement of data between systems (interoperable) to those that most impede that movement (anti-interoperable). |
| Date: | 2023–12–07 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:t65mw_v1 |
| By: | Klüh, Ulrich |
| Abstract: | We collect observations on how power constitutes itself in decentralized digital platform constellations that position themselves as alternatives to platforms operated by big tech (which we coin "hyperledgers"). We then compare these forms of power to the incumbent structures, the so called "hyperscalers". Such a comparison yields new insights into the way power "works" in surveillance-based platform capitalism. The crucial insight of our analysis is that it is highly unlikely that platform alternatives can be scaled up decisively within the current capitalist accumulation regime. Instead of focusing on finding business models within this regime, platform alternatives should therefore strive for regime change. This, however, would require new alliances, in particular between the victims of surveillance (workers and consumers) and the platform alternatives. The latter, in turn, would not only require massive public funding, but also support from civil society actors representing workers (i.e. unions) to be able to compete with incumbent hyperscalers. |
| Keywords: | Power relations, platform and surveillance capitalism, entrepreneurial activism, organizing studies, labor relations, democratization |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:znwudp:313639 |
| By: | Tadashi SEKIGUCHI; Katsutoshi WAKAI |
| Abstract: | Game theory proves the existence of a stronger punishment than the Nash reversion in the repeated games. Recent empirical ndings in Oligopoly, how- ever, suggest the implementation of the Nash reversion. In a standard repeated game setting, we propose a potential answer for this empirical puzzle by using a re ned version of the discounted utility that exhibits gain/loss asymmetry, where players discount gains more than losses. Our main result is as follows: among gain/loss robust subgame perfect equilibria, the Nash reversion o¤ers the strongest punishment. The robustness is based on the assumption that players are unsure about their own level of gain/loss asymmetry and choose only the strategies that are subgame perfect for any level of gain/loss asymmetry they can perceive as possible. |
| Keywords: | Gain/loss asymmetry, optimal penal code, repeated game, re-cursive utility, utility smoothing |
| JEL: | C73 D20 D90 L13 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:kue:epaper:e-24-009 |
| By: | World Bank |
| Keywords: | Information and Communication Technologies-ICT Data and Statistics Macroeconomics and Economic Growth-Economic Growth Private Sector Development-Competitiveness and Competition Policy |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wboper:41347 |
| By: | Sam Desiere (Ghent University); Tiziano Toniolo (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Gert Bijnens (National Bank of Belgium) |
| Abstract: | Policies supporting small businesses are popular among policymakers but often criticised by economists for their potential to distort the economy. This paper provides a comprehensive evaluation of a unique policy that subsidises the first employee. Empirically, we find that the policy led to a surge in the number of firms employing exactly one employee, without a noticeable effect on the number of firms with two or more employees. A simple frictionless general equilibrium model of occupational choices predicts the empirical facts remarkably well. Leveraging our model, we show that the general equilibrium effects on wages and aggregate output are likely to be small. However, the policy is expensive. Our findings support the traditional view that size-dependent subsidies distort the optimal allocation of resources. |
| Keywords: | size-dependent policies; firm entry; small firms; wage subsidies; payroll taxes |
| JEL: | D22 H25 J08 L25 L26 |
| Date: | 2025–03–11 |
| URL: | https://d.repec.org/n?u=RePEc:ctl:louvir:2025005 |