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on Industrial Competition |
| By: | Jens-Uwe Franck; Martin Peitz |
| Abstract: | This contribution examines Heike Schweitzer’s role as a competition policy analyst and adviser in the formative phase of European competition policy towards digital platforms. It situates her work in this context and develops a conceptual framework that captures the challenges of analysis under conditions of uncertainty and dynamic market developments. Through a selective analysis of four key reports, the article reconstructs central analytical approaches and policy proposals, identifies characteristic features of a “Heike Schweitzer approach”, and assesses its influence on subsequent regulatory developments, in particular the Digital Markets Act and section 19a of the German Competition Act. |
| Keywords: | antitrust law, digital platform, Digital Markets Act, German competition law, platform regulation |
| JEL: | K21 K23 K20 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_745 |
| By: | Joseph Emmens; Dennis C. Hutschenreiter; Stefano Manfredonia; Felix Noth; Tommaso Santini |
| Abstract: | We study whether common ownership affects the direction of technological change. We develop a task-based model with multiple local labor markets in which commonly owned firms internalize wage externalities from portfolio rivals when hiring from the same labor pool, increasing incentives to automate. We establish causality by exploiting institutional investor mergers in a dynamic DiD design, using U.S. data on institutional ownership, establishment level employment, and text-classified automation patents. Increases in common ownership among local labor-market rivals raise firms' automation propensity by 22.7 percentage points and reduce employment growth. The effect disappears when firms do not compete within labor markets. |
| Keywords: | Common Ownership, Automation, Local Labor Markets, Market Power |
| JEL: | O33 G23 J42 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26113 |
| By: | Chiara Canta; Leonardo Madio; Andrea Mantovani; Carlo Reggiani |
| Abstract: | Online platforms connecting physicians and patients are increasingly common and often operate in heavily regulated contexts. We consider a platform that provides cost-reducing services for physicians and quality-enhancing services for patients. The platform also improves the matching between patients and physicians, thereby increasing competition among the latter. When prices are unregulated, physicians charge different prices online and offline, yet not all join the platform, which is suboptimal in terms of social welfare. The platform may also under- or over-invest in the quality level offered to patients, making their participation suboptimal as well. We then analyze price regulation. Under a single regulated price for medical visits, regardless of the booking channel, all physicians join the platform. However, the first-best allocation cannot be implemented: patient participation remains inefficiently low because patients do not internalize the platform’s cost-reducing effect. In contrast, allowing two regulated prices, one for offline visits and one for platform bookings, restores the first best. Overall, our findings suggest that an optimal pricing or reimbursement mechanism should differentiate across booking channels. |
| Keywords: | healthcare online platforms, price regulation, patient-physician matching |
| JEL: | I11 I18 L51 H75 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12646 |
| By: | David Wasser |
| Abstract: | I investigate whether the effects of UI extensions are different for workers exposed to higher levels of local labor market concentration, a potential source of employer market power. I exploit measurement error in state unemployment rates that led to quasi-random assignment of UI durations in the U.S. during the Great Recession. Using matched employer-employee data from the Longitudinal Employer-Household Dynamics (LEHD) program, I find that UI extensions lengthen nonemployment durations by one week and cause economically meaningful but not statistically significant increases in earnings. The UI-earnings effect is significantly smaller at higher levels of concentration, while there is no difference in the UI-duration effect. The lower UI-earnings effect is driven by the extremes of the distribution of concentration. My results suggest that match improvements from UI are attenuated at higher levels of concentration. This technical report summarizes the code and data workflow and provides a short summary of the findings. A full write-up of the results can be found in CES Working Paper 26-24. The Census Bureau’s Disclosure Review Board and Disclosure Avoidance Officers have reviewed this information product for unauthorized disclosure of confidential information and have approved the disclosure avoidance practices applied to this release (Project co02564: CBDRB-FY22-P2564-R9730, CBDRB-FY22-P2564-R9765, CBDRB-FY22-P2564-R10066, CBDRB-FY23-P2564-R10107, CBDRB-FY23-P2564-R10207, CBDRB-FY24-P2564-R11080). |
| Keywords: | LBD, LEHD ECF, LEHD EHF, LEHD ICF |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cen:tnotes:26-11 |
| By: | Richard Green; David Newbery |
| Keywords: | Renewable electricity support schemes, auctions, curtailment, locational pricing |
| JEL: | L94 Q28 Q42 Q48 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:enp:wpaper:eprg2607 |
| By: | Namrata Kala; Muhammad Haseeb; James Fenske |
| Abstract: | Effective regulatory design requires an understanding of how regulatory burden affects regulated entities. Using novel data on all applications for environmental permits in five Indian states and a natural experiment, we estimate how regulatory burden of environmental permitting affects firms. Difference-in-difference estimates show that deregulation induces smaller firms to enter and increases entry. Standard data sources would miss these substantial effects, underscoring the importance of collecting data across the firm size distribution. We also use full texts of permit certificates to create novel measures of regulatory burden. Firms in industries with reduced regulations face fewer, less stringent, permit conditions. |
| Date: | 2026–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:bri:uobdis:26/827 |
| By: | Jaerim Choi (Yonsei University); Seongin Hong (University of Virginia); Jung Hur (Sogang University); Manho Kang (Georgia Institute of Technology) |
| Abstract: | How does China's rise affect exporters’ product scope when they compete with Chinese firms at home and abroad? Using Korean plant-level data, we find that both domestic import penetration and export competition in third markets reduce product scope. Specifically, export competition dampens new product creation, while import penetration accelerates the destruction of existing products. Eventually, both forms of competition lead to resource reallocation toward core products, highlighting distinct mechanisms through which global competition shapes product dynamics. We propose the disproportionate importance of the domestic market, the forward-looking nature of product creation, and creative destruction as potential drivers behind these responses. |
| Keywords: | Creative Destruction; Export Competition; Import Penetration; Multi-Product Exporters; Product Churning; Product Scope |
| JEL: | D22 F14 F61 L10 L25 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:yon:wpaper:2026rwp-288 |
| By: | Filip Abraham; Yannick Bormans; Jozef Konings (Nazarbayev University, Graduate School of Business); Werner Roeger |
| Abstract: | This paper provides a new method to estimate price-cost margins in the presence of fixed costs of production. By exploiting properties of the primal and dual sales-based and cost-based Solow residuals, we are able to simultaneously estimate price-cost margins and the share of fixed costs in total costs for each input. Ignoring fixed costs in production underestimates price-cost margins and overestimates excess profit shares. Using a 30 year panel of Belgian firms we estimate price-cost margins, as a fraction of sales, of 25.4% on average, which can be decomposed between fixed costs of 22.9% and excess profits of 2.5%. Belgian price-cost margins have declined (-5.9%) in the past three decades due to a combination of falling fixed costs (-4.0%) and decreasing excess profits (-1.9%), suggesting output markets have become even more competitive over time. While large firms have higher profit shares than small firms, they have lower fixed cost shares as well as lower price-cost margins. |
| Keywords: | Price-cost margins, fixed costs, excess profits, market power, firm level data |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:asx:nugsbw:2024-10 |
| By: | Liu, Qiang (Purdue University); Yu, Siyi; Wen, Siqi; Cai, Yong |
| Abstract: | This chapter examines pharmaceutical pricing through a five-part framework: Cost, Customers, Channels, Competitors, and Compatibility. We synthesize how research and development (R&D) risk, patent and exclusivity rules, insurer design, healthcare providers, patients, and intermediaries including pharmacy benefit managers (PBMs), wholesalers, pharmacies, and group purchasing organizations (GPOs), jointly shape list and net prices. The chapter distinguishes small-molecule and biologic cost structures; explains how patents, generics, and biosimilars alter competitive conduct; and shows how formularies, cost-sharing, copay programs, and patient-assistance mechanisms reallocate spending. We also integrate recent policy interventions, including Medicare Part D reforms, transparency mandates, drug-importation rules, and the Inflation Reduction Act (IRA) negotiation authority, and discuss their implications for innovation incentives and patient access. The chapter concludes with a forward-looking research agenda focused on developing innovative pricing models for high-cost therapies; examining global benchmarking and trade policies that influence R&D investment and affordability; assessing the effects of patient-assistance programs, copay coupons, and digital discount platforms; analyzing intermediary behavior and biosimilar competition within evolving market structures; and evaluating the impact of new U.S. pricing regulations through causal policy analysis. |
| Date: | 2026–05–05 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:vsb8j_v1 |
| By: | Hua Jin |
| Abstract: | This study proposes a framework for estimating demand in differentiated product markets with high dimensional product characteristics, building upon the seminal Berry, Levinsohn, and Pakes (1995) model, using market level data. We allow for a very large set of potential product characteristics, where the number of characteristics may exceed the number of market observations. Our contributions are twofold. First, we establish a general estimation theory for BLP models featuring high-dimensional nuisance parameters. We propose a Neyman orthogonal estimator specifically adapted to this framework, utilizing machine learning techniques, such as Lasso, to construct nuisance parameter estimators that are plugged into the Neyman orthogonal estimator. This approach offers a significant advantage: it achieves $\sqrt{T}$-asymptotic normality for parameters of interest--such as the price coefficient and price heterogeneity--even when nuisance parameters are estimated at slower rates due to their high dimensionality. Second, we apply this theory to a specialized BLP model under approximate sparsity, developing an estimation strategy for the high-dimensional nuisance parameters. The approximate sparsity condition posits that nuisance parameters can be controlled, up to a small approximation error, by a small and unknown subset of variables. In an economic context, this implies that while products have a vast array of characteristics, consumers focus on only a small subset of these due to bounded rationality. This condition makes the recovery of parameters of interest feasible by enabling nuisance parameter estimators to converge at the required rates. The practical performance of the method is evaluated through comprehensive Monte Carlo simulations, which demonstrate its efficacy in finite samples. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.01594 |
| By: | Ruimeng Hu; Mike Ludkovski; Hezhong Zhang |
| Abstract: | We develop a stochastic game-theoretic model for intraday dispatch of grid-scale battery energy storage systems (BESSs). We assume that each BESS operator competitively manages her state-of-charge to maximize energy arbitrage revenues, driven by the endogenized electricity price that depends on the sum of the charging rates. We characterize the Nash equilibrium of the resulting finite-player linear-quadratic differential game with a shared stochastic driver, obtaining semi-explicit representations of equilibrium feedback controls and equilibrium prices both in the general heterogeneous and the simplified homogeneous BESS setting, via a system of Riccati equations. We then analyze competitive effects, including the marginal externality of additional BESS entering the market, the benefit of coordination and the corresponding market power of large operators, and supply effects from hybrid-type BESSs. We further study the asymptotic regime as the number of agents grows large. Our model provides a quantitative testbed to study the impact of decentralized BESS deployment on the grid and the resulting reduction in daily price spreads. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.01178 |
| By: | Simon Elgersma; Hassan Benchekroun; Gerard Cornelis van der Meijden; Cees A. Withagen |
| Abstract: | We characterize the time-consistent solution to the cartel-fringe model of exhaustible resource extraction when the cartel acts as a von Stackelberg leader and renewable substitutes exist. For this feedback von Stackelberg equilibrium (FBSE), we show for each combination of stocks which equilibrium sequence will prevail. The equilibrium outcomes for the FBSE differ significantly: it features either an initial phase of simultaneous supply by the cartel and fringe or an initial phase where the cartel is the sole supplier on the market. We furthermore compare the FBSE with the Nash Cournot and the open-loop von Stackelberg equilibria. |
| Keywords: | cartel-fringe, dynamic game, time-consistency, von Stackelberg equilibrium |
| JEL: | Q01 Q30 Q38 Q42 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12648 |
| By: | Madjid Eshaghi Gordji; Mohamad Ali Berahman |
| Abstract: | Strategic competitions in the real world, from wars to geopolitical rivalries, often involve coalitions competing against rival groups. These contests are not simple interactions between unified entities, but multilayered processes in which coalitions face external competition while dealing with internal conflicts over resources and strategy. Existing game-theoretic models typically treat inter-coalition rivalry and intra-coalition competition separately. This paper introduces the Compound Coalition-Attrition Game (CCAG), a unified framework that integrates a war of attrition between coalitions with a simultaneous war of attrition within each coalition. In this model, the endurance of a coalition in external competition is determined by the strategic choices of its members, who compete internally for shares of the outcome. We prove the nonexistence of pure-strategy equilibria and characterize the unique mixed-strategy Nash equilibrium. The analysis reveals feedback effects: external competition intensifies internal conflict, while internal discord weakens external performance. A case study compares traditional commodity markets, including gold, copper, and silver, with cryptocurrency markets, including Bitcoin, Ethereum, and Solana, using data from 2018 to 2023 in a simulation framework. The results demonstrate applicability in industrial strategy, corporate decision-making, and geopolitical competition. The CCAG framework provides a tool for analysing complex strategic environments. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.02354 |
| By: | Simone Alfarano (Universitat Jaume I); Omar Blanco-Arroyo (Universitat de València) |
| Abstract: | We study how rising concentration in the U.S. stock market affects the transmis- sion of firm-level risk to aggregate volatility. Using a variance decomposition that separates common and granular components of market returns, we document a shift in the composition of idiosyncratic risk since the mid-2010s. Whereas idiosyncratic volatility previously reflected cross-firm comovement, it is now increasingly driven by the weighted variances of a small number of large firms. We show that this change is not explained by concentration alone, but by a reallocation of idiosyncratic risk toward dominant firms. As a result, aggregate volatility becomes more sensitive to firm-specific shocks at the top of the size distribution. |
| Keywords: | granularity; market concentration; idiosyncratic volatility; firm size distribution; aggregate volatility |
| JEL: | G12 G14 E44 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:eec:wpaper:2608 |