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on Industrial Competition |
| By: | Buchholz, Wolfgang; Hattori, Keisuke |
| Abstract: | This paper studies how an outsider can strategically induce a merger between rival firms. The outsider's anticipated post-merger output expansion lets it capture part of the gains from the merger but can also make the merger unprofitable for the insiders. We show that the outsider can make the merger profitable by committing in advance to a weaker competitive position, while the softer competition following the merger can more than compensate it for its self-imposed handicap. A general framework identifies conditions under which the outsider optimally chooses the minimum merger-inducing handicap. Three Cournot models show that voluntary capacity reduction, withdrawal from a profitable market, and a credible increase in marginal cost can each strictly raise the outsider's profit above the no-handicap, no-merger benchmark. Merger synergies can also benefit the outsider by reducing the handicap required to induce the merger. The analysis highlights the need to account for endogenous outsider constraints in ex ante assessments of mergers. |
| Keywords: | horizontal mergers, strategic commitment, self-handicapping, merger paradox, Cournot competition |
| JEL: | D43 L13 L41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:343613 |
| By: | Thierry Kirat (CNRS, UMR Triangle, Université de Saint-Etienne, France); Frédéric Marty (Université Côte d'Azur, CNRS, GREDEG, France; CIRANO, Montréal) |
| Abstract: | The Chair of the FTC was outvoted in July 2026 in a decision concerning the early termination of a proceeding opened regarding a proposed vertical merger in the quantum computing sector. The disagreement centered on whether to pursue behavioral remedies to counter potential short-term anticompetitive effects. Beyond the competition issue itself, the case is of interest for what it reveals about the complementarity between competition policy and industrial policy. Indeed, in the context of federal support for the construction of new foundries (a central dimension of the foreclosure risks associated with the vertical merger), industrial policy appears as a tool for lifting competitive bottlenecks, while competition policy serves as a tool for preserving competition during the transition phase. |
| Keywords: | vertical merger; foreclosure risk; behavioural remedies; quantum computing; antitrust |
| JEL: | K21 L12 L22 L42 L63 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2026-22 |
| By: | Laurenz Marstaller (University of Bonn) |
| Abstract: | This paper studies how platforms jointly choose fees and recommendations and their implications for fee regulation. A platform charges sellers a commission rate and ranks products based on price and match-value. The analysis shows that price-sensitive rankings intensify seller competition, allowing the platform to extract more surplus. Commission-rate caps constrain fees, but platforms may respond by making recommendations less price-sensitive, attenuating consumersurplus gains. By contrast, capped nominal fees can be more effective because they shift the platform’s incentives toward transaction volume rather than transaction value. Effective fee regulation must therefore account for how platforms adjust their recommendation policies in response. |
| Keywords: | Algorithm Design, DMA, Platform Regulation, Platforms, Recommendations, Search |
| JEL: | D43 D83 L13 L51 L86 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:430 |
| By: | Sebastien Rouillon (Department of Economics, University of Bordeaux); Marc-Alexandre Senegas (Department of Economics, University of Bordeaux) |
| Abstract: | We analyse the determinants of commercial satellite launch prices and the structure of the global launch market over 1996–2025 using a new database combining launch records, expert cost estimates, and regional industry revenue data. This approach provides more granular launch price estimates than previous studies. Econometric results show that payload mass and target altitude are the main determinants of launch prices, while real prices declined by 3.3% annually, reflecting technological progress. Market segmentation identifies three distinct service categories with differentiated price tiers, suggesting that competition is driven by provider specialisation across market segments rather than within a single global market. |
| Keywords: | Economics of space; Launch market; Hedonic regression. |
| JEL: | C23 L11 L93 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:bhw:wpaper:10-2026 |
| By: | Potarca, Matthias |
| Abstract: | The decline of auction-format sales in favor of posted prices on digital marketplaces is commonly attributed to behavioral biases or secular changes in the market environment. This paper examines the latter by jointly modeling two forms of buyer opportunity cost within a standard symmetric independent private values framework: an entry cost sunk upon auction participation, and a mechanism-independent outside option reflecting the surplus a buyer can obtain from a close substitute at a known market price. A seller chooses between a second-price auction and a posted price; potential buyers decide whether to participate after observing their private valuations. The outside option endogenously partitions buyers into low-value types, who bid their full valuation, and high-value types, whose bids are capped at the outside option price, giving rise to qualitatively distinct entry regimes that the seller anticipates and actively shapes. Pressure from either channel strictly erodes the auction's advantage, but the seller's response to the two is asymmetric. The model yields testable implications that qualitatively align well with observed patterns and place weight on the outside option channel as a driver for the shift towards posted prices. |
| Keywords: | auctions, posted prices, entry costs, outside options, mechanism design, e-commerce |
| JEL: | D44 D47 D82 L81 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kitwps:343538 |
| By: | Axel Gottfries; Gregor Jarosch |
| Abstract: | We study no-poach cartels using a wage-posting model that puts worker poaching at the center of labor market competition. Even when just two out of ten employers in a local labor market collude, wages fall by almost 5% market-wide. The reason is that no-poach agreements suppress competition along the job ladder, with spillovers to non-colluding firms. We then compare no-poach agreements to two other forms of anti-competitive conduct in the labor market: noncompete agreements and wage fixing. No-poach agreements have by far the largest negative wage effects. |
| JEL: | E0 J0 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35492 |
| By: | Imenkamp, Nico; Wey, Christian |
| Abstract: | We analyze resale price maintenance (RPM) in a successive monopoly framework. When the retailer faces decreasing average costs or shelf-space opportunity costs while the manufacturer's marginal costs increase, linear pricing forces wholesale prices below marginal cost, potentially causing trade to collapse. Minimum RPM restores efficiency if trade fails, but reduces welfare if trade remains viable. Under the Colgate doctrine, the manufacturer's right to refuse to deal sustains trade even under price-floor bans. Finally, incomplete contracts induce retailer opportunism, including pocketing trade allowances without supporting the product, or exploiting inflated margins to push sales. Strategic contract combinations minimize both margins simultaneously. |
| Keywords: | Successive Monopoly, Resale Price Maintenance, Trade Allowance, Retailer Opportunism |
| JEL: | L42 D86 L12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:dicedp:343592 |
| By: | Jérôme Pouyet (CY - CY Cergy Paris Université, CNRS - Centre National de la Recherche Scientifique, ESSEC Business School and THEMA (UMR 8184) - ESSEC Business School - THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université); David Martimort (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse, CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | A retailer can boost demand for a manufacturer's product through non-verifiable activities. Performance-based trade allowances—rebates conditional on the retailer's successful sales efforts—help mitigate this moral hazard problem. In equilibrium, the wholesale contract includes a retail price set below cost, complemented by a rebate for incremental units purchased when efforts successfully increase sales. Loss leading thus emerges as an incentive mechanism, rather than a practice driven by anti-competitive or exploitative intent. A ban on below-cost pricing leads to higher retail prices and reduced promotional efforts. |
| Keywords: | Vertical restraints, Moral hazard, Loss leading, Performance-based allowances, Below-cost pricing |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05740397 |
| By: | Fazliddin Shermatov; Stephane Robin; Aldo Geuna |
| Abstract: | Whether artificial intelligence pays off for the firms that build it into their products is hard to establish, because AI innovation is itself hard to observe. The medical technology sector is a rare exception: an AI-enabled device must obtain clearance from a national health authority before it can reach a patient, leaving a dated, firm-attributable record of AI innovation output that can be observed directly rather than proxied. We exploit this setting with a three-stage recursive model estimated on a novel firm-level dataset linking FDA premarket clearances, USPTO patents, Scopus publications, and Orbis financials, tracing the full innovation chain from external collaboration through AI device introduction to firm performance. We find that external AI research collaboration is a robust driver of AI device introduction across firm sizes and estimators, with a larger effect for small firms, consistent with external knowledge ties substituting for limited internal R&D capacity. Decomposing by partner type, the effect is largest for industry and clinical collaborations and smallest for academic ties, consistent with the former being closer to the regulatory and commercialisation process. Firms that bring AI devices to market display higher labour productivity, an effect robust for small firms and the full sample that holds under both sequential and joint maximum-likelihood estimation and accumulates across successive device introductions. Effects on profit margins are present but weaker and do not survive all specifications, a pattern consistent with competitive entry eroding pricing power as AI devices diffuse through the sector. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.08485 |
| By: | Valentin Georges; Thomas Allen |
| Abstract: | The changes in industrial sector financing between 1996 and 2024 reveal a shift in the debt structure, with an increase in the proportion of bond financing, particularly in the manufacturing segment since 2012. These developments must be viewed in the light of a trend towards industrial consolidation, which has reinforced the role of the largest players and encouraged a diversification of financing methods. <p> L’évolution du financement du secteur industriel entre 1996 et 2024 met en lumière une transformation de la structure d’endettement, avec l’augmentation de la part des financements obligataires, en particulier pour son segment manufacturier depuis 2012. Ces mutations doivent être interprétées à l’aune d’un mouvement de concentration industrielle, qui a renforcé le rôle des plus grands acteurs et favorisé la diversification des modes de financement. |
| Date: | 2026–07–10 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:econot:456 |