nep-com New Economics Papers
on Industrial Competition
Issue of 2025–06–30
twenty papers chosen by
Russell Pittman, United States Department of Justice


  1. Does Common Ownership Distort Entry Incentives In Successive Oligopolies? By Basak, Debasmita
  2. Dual Pricing in a Model of Sales By Nicolas Schutz; Anton Sobolev
  3. Competition and Collusion in Two-Sided Markets with an Outside Option By Cristian Chica; Yinglong Guo; Gilad Lerman
  4. Upstream competition and exclusive content provision in media markets By Kiho Yoon
  5. Limits of Disclosure in Search Markets By Raphael Boleslavsky; Silvana Krasteva
  6. Price Equilibria in a Spatial Competition with Captive Buyers By Shinnosuke Kawai; Kuninori Nakagawa
  7. Estimating labour market power: the long and short of it By Ihsaan Bassier; Alan Manning
  8. Long-term Vertical Contracts, Geography, and the Persistence of Brand Shares By Robert Clark; Jean-François Houde; Xinrong Zhu
  9. Coping with Undesirable Effects of DMA Implementation: Google Search and the Ban on Self-Preferencing By Jens-Uwe Franck; Mauro Hartl
  10. How does online shopping affect offline price sensitivity? By Shirsho Biswas; Hema Yoganarasimhan; Haonan Zhang
  11. The (Mis)use of Information in Decentralised Markets By D. Carlos Akkar
  12. Subgame Perfect Nash Equilibria in Large Reinsurance Markets By Maria Andraos; Mario Ghossoub; Michael B. Zhu
  13. The “Netflix effect” revisited: OTT video, media globalization and digital sovereignty in 4 countries By Tambini, Damian
  14. Parallel Universe: How ending parallel import restrictions cuts costs for British consumers By Howe, Martin; Lesh, Matthew
  15. A Model of Ride Dispatch in Informal Market under Rival Entry By Md Mahadi Hasan
  16. Road-rail substitution in the early motoring age, 1910-1938 By Alban de Gmeline; Alexis Litvine
  17. Preventing the misuse of antitrust against FDI: Key action points By Mariotti, Sergio
  18. Import Competition and Restructuring Strategies: Evidence from Japanese firm-level data By Tadashi ITO; Toshiyuki MATSUURA
  19. Rethinking Competition as a Non-Beneficial Mechanism in Economic Systems By Marcelo S. Tedesco; Gonzalo Marquez
  20. A Tale of Two Monopolies By Yi-Chun Chen; Zhengqing Gui

  1. By: Basak, Debasmita
    Abstract: It is commonly believed that common ownership deters entry by internalizing market competition which warrants pro-competitive entry regulations. Using a successive oligopoly model with common ownership, we challenge this conventional wisdom. We show that if the downstream sector alone operates under common ownership, entry is always socially excessive, i.e., more firms enter the market than is socially optimal. In contrast, when the upstream sector alone operates under common ownership, entry is socially excessive (insufficient) if the degree of common ownership in the upstream market is reasonably low (high). Finally, when both sectors are characterized by common ownership, entry is socially excessive if the degree of ownership in the downstream market is stronger than that in the upstream market. Therefore, our findings provide a rationale for anti-competitive, rather than pro-competitive entry regulations.
    Keywords: Common Ownership, Excessive Entry, Insufficient Entry, Successive Oligopoly
    JEL: D43 L11 L13 L22
    Date: 2025
    URL: https://d.repec.org/n?u=RePEc:zbw:esprep:319538
  2. By: Nicolas Schutz; Anton Sobolev
    Abstract: We study the competitve effects of dual pricing, a vertical restraint that involves charging a distributor different prices for units intended to be resold online versus offline. We develop a model in which a manufacturer contracts with hybrid retailers selling both in-store and online. We find that, by eliminating wasteful price dispersion, dual pricing allows the manufacturer to induce the industry monopoly outcome, whereas uniform pricing does not. Despite this, a ban on dual pricing has negative welfare effects if the online market is small, if the offline consumers' search costs are high, and if the monopoly pass-through is high.
    Keywords: dual pricing, price dispersion, consumer search, vertical restraints
    JEL: L13 L42 D43 D83
    Date: 2025–03
    URL: https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_678v2
  3. By: Cristian Chica; Yinglong Guo; Gilad Lerman
    Abstract: We introduce pricing formulas for competition and collusion models of two-sided markets with an outside option. For the competition model, we find conditions under which prices and consumer surplus may increase or decrease if the outside option utility increases. Therefore, neglecting the outside option can lead to either overestimation or underestimation of these equilibrium outputs. Comparing collusion to competition, we find that in cases of small cross-side externalities, collusion results in decreased normalized net deterministic utilities, reduced market participation and increased price, on both sides of the market. Additionally, we observe that as the number of platforms increases in the competition model, market participation rises. Profits, however, decrease when the net normalized deterministic utility is sufficiently low but increase when it is high. Furthermore, we identify specific conditions that quantify the change of price and consumer surplus when the competition increases.
    Date: 2025–05
    URL: https://d.repec.org/n?u=RePEc:arx:papers:2505.06109
  4. By: Kiho Yoon
    Abstract: With a multilateral vertical contracting model of media markets, we examine upstream competition and contractual arrangements in content provision. We analyze the trade of content by the Nash bargaining solution and the downstream competition by the Hotelling location model. We characterize the equilibrium outcomes and the contractual arrangements for various vertical structures. We show that the possibility of exclusive contracts rises when the value of the premium content increases, the degree of horizontal differentiation in the downstream market decreases, the importance of advertising revenue decreases, and the relative bargaining power of upstream firm decreases.
    Date: 2025–06
    URL: https://d.repec.org/n?u=RePEc:arx:papers:2506.15063
  5. By: Raphael Boleslavsky; Silvana Krasteva
    Abstract: This paper examines competitive information disclosure in search markets with a mix of savvy consumers, who search costlessly, and inexperienced consumers, who face positive search costs. Savvy consumers incentivize truthful disclosure; inexperienced consumers, concealment. With both types, equilibrium features partial disclosure, which persists despite intense competition: in large markets, firms always conceal low valuations. Inexperienced consumers may search actively, but only in small markets. While savvy consumers benefit from increased competition, inexperienced consumers may be harmed. Changes in search costs have non-monotone effects: when costs are low, sufficient reductions increase informativeness and welfare; when costs are high, the opposite.
    Date: 2025–05
    URL: https://d.repec.org/n?u=RePEc:arx:papers:2506.06319
  6. By: Shinnosuke Kawai; Kuninori Nakagawa
    Abstract: This paper explores price competition with exogenous product differentiation in a spatial model similar to that of Nakagawa (2023). Nakagawa examines product differentiation within the framework of Varian (1980). Nakagawa integrates Varian's concept of uninformed consumers, who lack complete price information, into a spatial model based on Hotelling (1929). While Nakagawa placed informed consumers at the center of the Hotelling line and used quadratic transportation costs, our study employs a uniform distribution of informed consumers and linear transportation costs. This approach enables a more direct comparison with established spatial competition literature, particularly Osborne and Pitchik (1987). We classify equilibrium candidates and characterize the parameter regions corresponding to each equilibrium. There is no pure equilibrium in the region where we construct mixed strategy equilibria. Furthermore, we compare the expected profit in the equilibrium of our model with the findings of Osborne and Pitchik (1987). Finally, we discuss the impact of captive buyers on the nature of spatial competition.
    Date: 2025–05
    URL: https://d.repec.org/n?u=RePEc:arx:papers:2505.06961
  7. By: Ihsaan Bassier; Alan Manning
    Abstract: This paper combines two empirical traditions in the study of employer monopsony power. One tradition estimates static firm labour supply elasticities, while the other focuses on labour market flows, estimating separations and hires elasticities. We nest these two approaches in a simple dynamic model for firm-level labour supply in which the short- and long-run labour supply elasticities are different. Using matched employer-employee data from the UK, we estimate a short-run labour supply elasticity of 1-2 and a longrun elasticity of 5-6. Estimating a static labour supply curve estimates a weighted combination of the short- and long-run elasticities. Separations and hiring elasticities estimated on the same data are consistent with the long-run elasticity but are not informative about the short-run.
    Keywords: Monopsony, Dynamic Labour Supply, labour, labor
    Date: 2025–06–10
    URL: https://d.repec.org/n?u=RePEc:cep:cepdps:dp2108
  8. By: Robert Clark; Jean-François Houde; Xinrong Zhu
    Abstract: Previous research highlights persistent differences in national brand market shares across regions, driven by geographic consumer preferences and early entry advantages (Bronnenberg et al. 2007, 2009). This study investigates the extent to which long-term vertical contracts can explain the observed geographic dispersion and persistence of national brand dominance. Using NielsenIQ data from the same product categories as Bronnenberg et al. (2007), we follow Abowd et al. (1999) to decompose the variance in brand shares into Brand × Retailer and Brand × Market effects. Results show that 50% of the variance is explained by retailer effects, compared to 20% by market effects. This suggests that some retailers use vertical contracts that favor a specific brand across all markets in which they compete, such as exclusive-dealing, slotting allowances, or category-captaincy contracts, and that these play a key role in sustaining national brand dominance documented in prior literature. By emphasizing how retailer-specific factors drive observed patterns, we complement demand-side explanations and shift attention to supply-side factors that could affect competition.
    JEL: L42 L81
    Date: 2025–06
    URL: https://d.repec.org/n?u=RePEc:nbr:nberwo:33906
  9. By: Jens-Uwe Franck; Mauro Hartl
    Abstract: The Digital Markets Act (DMA) accepts certain negative short-term effects on the welfare of users of core platform services in order to achieve fairness and contestability in the long run. In this paper, we illustrate and analyse the more critical case where the regulatory rigidity of the DMA leads to side effects that clearly run counter to these regulatory objectives, as the implementation of the DMA by one platform consolidates the entrenched position of another core platform service. We develop four theses in this regard: (i) such side effects are undesirable but do not justify a limited enforcement of a particular obligation; (ii) adopting specifying measures to prevent such effects would exceed the regulatory leeway granted to the Commission under Article 8(2) of the DMA; (iii) there may be indirect effects on the scope of other DMA provisions that mitigate undesirable effects; (iv) undesirable side effects need to be addressed through anttitrust and other regulatory instruments. As a paradigmatic example, we analyse how the ban on self-preferencing has been implemented by Google with regard to hotel search queries. In doing so, we consider several open questions regarding the ban on self-preferencing and show how the status quo of Google’s display of hotel search results (still) violates Article 6(5) of the DMA.
    Keywords: Digital Markets Act; Google Search; self-preferencing; specifying procedure; implementing acts; disintermediation; Booking.com
    JEL: K21
    Date: 2025–06
    URL: https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_692
  10. By: Shirsho Biswas; Hema Yoganarasimhan; Haonan Zhang
    Abstract: The rapid rise of e-commerce has transformed consumer behavior, prompting questions about how online adoption influences offline shopping. We examine whether consumers who adopt online shopping with a retailer become more price-sensitive in their subsequent offline purchases with that retailer. Using transaction-level data from a large Brazilian pet supplies retailer operating both online and offline, we compare ''adopters'' - customers who began shopping online after a period of offline-only purchasing - with ''non-adopters'' who remained offline-only. We estimate a discrete choice logit model with individual-level heterogeneity, using a novel algorithm to handle high-dimensional fixed effects and address price endogeneity. We then apply a staggered difference-in-differences approach to the estimated price elasticities and obtain the Average Treatment Effect on the Treated (ATT). We find that offline price sensitivity increases significantly after online adoption in three out of four product categories, particularly in items with low switching costs, such as pet hygiene. Counterfactual pricing simulations show that incorporating these behavioral spillovers into pricing strategies can increase firm profits by up to 4.1%. These results underscore the importance of recognizing cross-channel effects in consumer behavior and contribute to the literature on pricing and multichannel retailing by identifying online adoption as a key driver of offline price sensitivity.
    Date: 2025–06
    URL: https://d.repec.org/n?u=RePEc:arx:papers:2506.15103
  11. By: D. Carlos Akkar
    Abstract: A seller offers an asset in a decentralised market. Buyers have private signals about their common value. I study whether the market becomes allocatively more efficient with (i) more buyers, (ii) better-informed buyers. Both increase the information available about buyers' common value, but also the adverse selection each buyer faces. With more buyers, trade surplus eventually increases and converges to the full-information upper bound if and only if the likelihood ratios of buyers' signals are unbounded from above. Otherwise, it eventually decreases and converges to the no-information lower bound. With better information about trades buyers would have accepted, trade surplus increases. With better information about trades they would have rejected, trade surplus decreases--unless adverse selection is irrelevant. For binary signals, a sharper characterisation emerges: stronger good news increase total surplus, but stronger bad news eventually decrease it.
    Date: 2025–06
    URL: https://d.repec.org/n?u=RePEc:arx:papers:2506.06848
  12. By: Maria Andraos; Mario Ghossoub; Michael B. Zhu
    Abstract: We consider a model of a reinsurance market consisting of multiple insurers on the demand side and multiple reinsurers on the supply side, thereby providing a unifying framework and extension of the recent literature on optimality and equilibria in reinsurance markets. Each insurer has preferences represented by a general Choquet risk measure and can purchase coverage from any or all reinsurers. Each reinsurer has preferences represented by a general Choquet risk measure and can provide coverage to any or all insurers. Pricing in this market is done via a nonlinear pricing rule given by a Choquet integral. We model the market as a sequential game in which the reinsurers have the first-move advantage. We characterize the Subgame Perfect Nash Equilibria in this market in some cases of interest, and we examine their Pareto efficiency. In addition, we consider two special cases of our model that correspond to existing models in the related literature, and we show how our findings extend these previous results. Finally, we illustrate our results in a numerical example.
    Date: 2025–06
    URL: https://d.repec.org/n?u=RePEc:arx:papers:2506.07291
  13. By: Tambini, Damian
    Abstract: This article examines the interplay between the ‘Netflix effect’ of media globalisation and the reassertion of ‘digital sovereignty’ through national competition, content, and industrial policy. Taking a case study approach the study is based on analysis of laws, codes and policy documents along with expert interviews and secondary data. The study finds that whilst OTT video has undermined revenues and audiences for national broadcasters in all the countries studied, there are differences in the nature of the impact and the response. Policymakers are reasserting digital sovereignty using a variety of broadcasting policy tools. All the countries feature policies including protection of domestic producers, consumers and public service media as well as competition law-based interventions. In some countries such as Australia and the UK, public service media protections have been updated. In others, such as Japan and Korea, policy has focused more on promotion of domestic content exports abroad. The article closes with discussion of the wider significance of these developments for media globalisation, soft power and digital sovereignty.
    JEL: R14 J01
    Date: 2025–06–30
    URL: https://d.repec.org/n?u=RePEc:ehl:lserod:127739
  14. By: Howe, Martin; Lesh, Matthew
    Abstract: Parallel imports are genuine products imported into the United Kingdom without the consent of the intellectual property (IP) rights holder, often taking place when there is a price or availability difference between markets. Parallel import restrictions (PIRs) allow producers to control distribution across borders and price-discriminate between different national markets. The UK historically allowed parallel imports based on a principle of international exhaustion of rights. This changed following the harmonisation of EU trademark rules in the late 20th century, with the European Court of Justice (ECJ) requiring member states to block imports of genuine goods from outside the EU without rights holder permission. Brexit has provided an opportunity to diverge from the EU approach and abolish an effective trade barrier. The previous government consulted on the future parallel import regime in 2021 but did not make a final decision prior to the election. There is therefore an opportunity for the new government to take action. Since Brexit, the UK has continued allowing parallel imports from the EU/EEA while restricting imports from the rest of the world. This approach is arbitrary, inconsistent, and may violate World Trade Organization (WTO) obligations. Removing PIRs would intensify competition, lower consumer prices, expand consumer choice and improve supply chain flexibility. Academic evidence from Australia, New Zealand and within the EU suggests benefits to consumers from allowing parallel imports. The NHS, for example, is estimated to save hundreds of millions of pounds each year as a result of parallel imports from the EU. Arguments from rights holders against removing restrictions - such as harming domestic creative industries, reducing investment incentives, impacting product quality, distorting retail competition, and environmental/ethical concerns - are not well supported by evidence. There may be limited exceptional cases, such as low-cost pharmaceuticals for developing countries, warranting continued restriction. The UK should revert to its historical stance by allowing parallel imports from all countries with narrow exceptions as needed. This would be consistent with the approach taken by many other nations globally.
    Date: 2025
    URL: https://d.repec.org/n?u=RePEc:zbw:ieadps:314033
  15. By: Md Mahadi Hasan
    Abstract: I develop a continuous-time model in which an incumbent batch-service provider faces stochastic passenger arrivals and must decide when to dispatch under the threat of customer defection to a faster entrant. The incumbent's problem is formalized as a trade-off between departure frequency and load maximization, with the option to accept mid-route pickups. I characterize the equilibrium dispatch strategy and show that increased competitive pressure strictly reduces the feasible departure threshold, leading to more frequent departures with smaller passenger loads. Longer travel times tend to raise the unconstrained optimal threshold, but realized dispatch behavior also depends on passenger tolerance for delay. Endogenizing demand by letting the arrival rate fall with expected waiting time yields an interior optimum, rationalizing why incumbents now (i) depart partially full and (ii) accept mid-route riders. Comparative statics show that the optimal threshold tends to increase with travel time under a mild regularity condition and decreases with competitive intensity.
    Date: 2025–05
    URL: https://d.repec.org/n?u=RePEc:arx:papers:2505.20554
  16. By: Alban de Gmeline (University of Cambridge); Alexis Litvine (University of Cambridge)
    Abstract: We investigate the closures of railway lines in France between 1910 and 1938 when France experienced rapid network shrinkage. Multiple hypotheses have been put forward, ranging from the financial troubles of railway companies, the competition of automobiles and interurban coach services, and the rationalisation of the network leading to its nationalisation and the creation of the SNCF in 1938. We provide a quantitative assessment of these factors using newly assembled data on road and rail networks and the first historical metric for passenger traffic at the station level. Finally, we analyse the impact in terms of spatial inequality.
    JEL: L92 N74
    Date: 2025–03–19
    URL: https://d.repec.org/n?u=RePEc:cmh:wpaper:43
  17. By: Mariotti, Sergio
    Abstract: Economic downturns and geopolitical tensions fuel protectionism, leading to trade barriers and competition policy manipulation to restrict FDI deemed harmful to national interests and favor domestic firms. National and international reforms are essential. Given challenges in global cooperation, bilateral and regional agreements offer a pragmatic path forward.
    Date: 2025
    URL: https://d.repec.org/n?u=RePEc:zbw:colfdi:319708
  18. By: Tadashi ITO; Toshiyuki MATSUURA
    Abstract: Using firm-level data from Japan, this study examines how firms restructure in response to import competition from China, with a focus on employment adjustments and industry switching. The results indicate that many firms reduced their workforce in response to rising imports, with production workers experiencing the most substantial job losses. An analysis of the time lag in the effects of import shocks suggests that while the number of production workers declines immediately following an increase in imports, broader employment adjustments and industry switching typically occur after a delay of two or more years. Moreover, a comparison between firms that switched industries and those that did not shows that non-switching firms faced more severe negative impacts from import competition. Offshoring plays a critical role in mitigating these adverse effects.
    Date: 2025–06
    URL: https://d.repec.org/n?u=RePEc:eti:dpaper:25059
  19. By: Marcelo S. Tedesco; Gonzalo Marquez
    Abstract: Persistent economic competition is often justified as a mechanism of innovation, efficiency, and welfare maximization. Yet empirical evidence across disciplines reveals that competition systematically generates fragility, inequality, and ecological degradation, emergent outcomes not of isolated failures but of underlying systemic dynamics. This work reconceptualizes economic ecosystems as real complex adaptive systems, structurally isomorphic with biological and social ecosystems. Integrating complexity science, evolutionary biology, ecology, and economic and business theory, we classify economic interactions according to their systemic effects and propose a theoretical model of ecosystemic equilibrium based on the predominance of beneficial versus non-beneficial relationships. Recognizing economies as ecologically embedded and structurally interdependent systems provides a novel framework for analyzing systemic resilience, reframing competition as a non-beneficial mechanism.
    Date: 2025–06
    URL: https://d.repec.org/n?u=RePEc:arx:papers:2506.11405
  20. By: Yi-Chun Chen; Zhengqing Gui
    Abstract: We apply marginal analysis \`a la Bulow and Roberts (1989) to characterize the revenue-maximizing selling mechanism for a multiproduct monopoly. Specifically, we derive the revenue change due to a price perturbation on any subset of bundles holding the prices of other bundles fixed. In an optimal mechanism, total revenue must not increase with any small price change for bundles with positive demand, nor with a small price decrease for bundles with zero demand. For any symmetric two-dimensional type distribution satisfying mild regularity conditions, the marginal analysis fully characterizes the optimal mechanism, whether the buyer's valuations are additive or exhibit complementarity or substitutability. For general type distributions, the analysis identifies which bundles must carry positive or zero demand and provides conditions under which randomization is necessary.
    Date: 2025–06
    URL: https://d.repec.org/n?u=RePEc:arx:papers:2506.06763

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