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on Industrial Competition |
| By: | Roberto Mazzoleni; Hamza Virk |
| Abstract: | We analyze how an incumbent antibiotic monopolist responds to the threat of post-entry Bertrand competition by a vertically differentiated rival. In a two-period model where current production drives future resistance, Bertrand competition leads to a winner-take-all outcome. We find that strategic deterrence is optimal regardless of bacterial cross-resistance to prospective rival drugs. In contrast with post-entry Cournot competition, anticipated price competition provides the incumbent with a stronger strategic incentive for conservation. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.05261 |
| By: | Tomaso Duso; Martin Peitz |
| Abstract: | Trade conflicts, geopolitical tensions, digital disruption, and the climate crisis pose major challenges for the European Union (EU) and its member states. As called for in the Draghi Report, industrial policy measures can increase competitiveness, strengthen resilience, and facilitate the twin transformation. This article explores ways in which competition policy can be realigned to better accommodate industrial policy objectives. Using German competition law as a reference point, it presents options with which legislatures and competition authorities can respond to current challenges, reconcile conflicting objectives, and adapt the decision-making framework. It then considers elements of a competition-oriented industrial policy, understood as an evidence-based, targeted approach in which competition serves both as a guiding principle and as a control variable. |
| Keywords: | industrial policy, protection of competition, competition, regulation, competition policy, competitiveness, internal market |
| JEL: | L40 L50 L52 K21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2145 |
| By: | Paul Heidhues (Heinrich-Heine-Universität Düsseldorf); Johannes Johnen (CORE/LIDAM, Université catholique de Louvain); Botond Kőszegi (University of Bonn) |
| Abstract: | We investigate the effects of consumer-protection regulations limiting post-purchase harm when there are many markets and consumers have limited attention to examine prices or product features. Such regulation lowers the attention necessary for valuable purchases, which can allow a consumer to purchase in more markets, or serve to induce competition. The first benefit is most important when few markets are regulated, while the second emerges when regulatory scope is sufficiently broad to create “spare” — i.e., in equilibrium unused — attention. Because little spare attention can enforce competition in many markets, consumer welfare can be highly non-linear in regulatory scope. The benefits of regulating a market often accrue in other markets, and there is a sense in which overly tight regulation outperforms overly lax regulation. Broad consumer protection can help the economy reach productive efficiency, and when this is achieved less regulation may suffice. |
| Keywords: | Consumer protection, regulation, competition, participation, limited attention |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:383 |
| By: | Lopez, Rigoberto A.; Mohapatra, Debashrita; Steinbach, Sandro |
| Keywords: | Industrial Organization, Demand and Price Analysis, Agribusiness |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea24:343711 |
| By: | Steinbach, Sandro; Graziano, Marcello; Connolly, Cristina |
| Keywords: | Industrial Organization, Agribusiness |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea24:343800 |
| By: | Rabinovich, Elliot; Chenarides, Lauren; Richards, Timothy J. |
| Keywords: | Industrial Organization, Marketing, Agricultural and Food Policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea24:343649 |
| By: | Frederik von Waldow; Heike Link |
| Abstract: | This paper analyses determinants of pass-through for Germany’s 2022 temporary fuel discount at its implementation and subsequent termination. Based on a unique dataset of fuel station characteristics and prices, we employ a two-stage Regression Discontinuity in Time (RDiT) methodology to estimate spatial pass-through variation. Our findings indicate that horizontal and vertical market structures exert an asymmetric influence on tax pass-through. Competitive pressure enhances price responsiveness to tax reductions, whereas we find the opposite pattern for the tax increase. Furthermore, independence from upstream markets is associated with lower tax pass-through, indicating the presence of double marginalization. |
| Keywords: | gasoline prices, fuel taxation, spatial competition, tax pass-through, regression discontinuity in time |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwddc:dd116 |
| By: | Michele Bisceglia (Center for Algorithms, Data, and Market Design at Yale (CADMY)); Alessandro Bonatti (MIT Sloan School of Management); Fiona Scott Morton (Yale School of Management) |
| Abstract: | We study how privacy regulation affects menu pricing by a monopolist platform that collects and monetizes personal data. Consumers differ in privacy valuation and sophistication: naive users ignore privacy losses, while sophisticated users internalize them. The platform designs prices and data collection options to screen users. Without regulation, privacy allocations are distorted and naive users are exploited. Regulation through privacy-protecting defaults can create a market for information by inducing payments for data; hard caps on data collection protect naive users but may restrict efficient data trade. |
| Date: | 2025–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2474 |
| By: | Daiya ISOGAWA; Hiroshi OHASHI |
| Abstract: | This paper examines the distortionary incentives created by ratchet-based regulation of medical device reimbursement prices. In Japan, reimbursement rates for devices such as cardiac pacemakers are revised every two years, with adjustments based on transaction prices observed between hospitals and device sellers during designated sampling periods. This retrospective pricing rule gives hospitals and sellers a shared incentive to raise prices during update periods -- an incentive that contrasts with their ordinarily opposing interests in price negotiations. Using a Nash-in-Nash bilateral bargaining model and transaction-level cost data, the study finds that hospitals generally hold greater bargaining power than device sellers. When cost data are unavailable -- as is common in much of the existing literature -- the estimated bargaining parameters differ markedly under conventional cost assumptions. Wholesale prices are higher compared to counterfactuals without the ratchet-based regulation, with distortions more pronounced in less competitive product categories. Although the ratchet mechanism could, in principle, have raised reimbursement prices by more than 20%, our simulations indicate that the actual effect was modest. This attenuated impact is attributable to institutional features of the reimbursement system including the government’s use of a relatively long sampling window and its aggregation of products into broad functional categories. This institutional architecture collectively reduces the scope for strategic price inflation. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25118 |
| By: | Nouve, Yawotse; Zheng, Yuqing; Zhao, Shuoli |
| Keywords: | Industrial Organization, Marketing, Agribusiness |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea24:343795 |
| By: | Abdrakhmanova, Maria; Gluschenko, Konstantin |
| Abstract: | A spatially dispersed market for a tradable good is deemed integrated if there are no barriers to trade between its spatial segments (except for geographical barriers, namely distances between the segments). However, perfectly integrated markets are not a common case; real markets deviate to some extent from this ideal state. Therefore, estimating a degree of integration is more helpful then an answer of the type “all or nothing” (whether the market is integrated or not integrated). In an integrated market, price for a good is determined in the national market as a whole, not depending on demand in its spatial segments. Hence, a dependence of local price on local demand (controlling for transportation costs) indicates a deviation from perfect integration, and its “strength” can measure the degree of market integration. Based on this idea, we estimate the annual integration degrees of the US market for an aggregated good (grocery basket) over 15 years, 2001–2015. The spatial segments are cities; our sample covers 66 cities from 39 states of the US. The results suggest that the US market is not perfectly integrated; however, the integration degree of the US market is fairly stable over time. We also compare results for the US with results of a similar study for Russia. With a reservation that the empirical material is not fully comparable, we can conclude that the US market is integrated more strongly than the Russian market and that the integration degree in Russia is more volatile. |
| Keywords: | Spatial market integration Price dispersion Law of one price United States |
| JEL: | L81 R15 R19 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126643 |
| By: | Marc Kaufmann (Central European University); Malte Kornemann (University of Bonn); Botond Kőszegi (University of Bonn) |
| Abstract: | We study how secondary markets for durable goods interact with consumers’ social-responsibility motives to mitigate environmentally harmful new production. On the positive side, secondary markets may allow responsible consumers to acquire used goods that would otherwise be discarded, reducing premature waste. On the negative side, secondary markets introduce two major harmful forces. First, the possibility of buying used goods and thereby causing less harm can raise the demand of responsible consumers, often increasing the production necessary to serve the market. Second, said demand can increase the price of used goods, encouraging purchases of new goods. These forces imply that if used goods have positive private consumption value, then secondary markets always erode the benefits of social responsibility. If, instead, used goods may have negative private value, then secondary markets can enhance or erode the benefits of social responsibility. |
| Keywords: | Socially responsible consumers, climate change, externalities, secondary markets, durable goods, used goods |
| JEL: | D01 D11 D50 D62 D64 D91 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:382 |