nep-ind New Economics Papers
on Industrial Organization
Issue of 2005‒11‒05
three papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Competition and contracts in the Nordic Residential Electricity Markets By Stephen Littlechild
  2. Oligopsonistic Cats and Dogs By Gerda Dewit; Dermot Leahy
  3. U.S. v. Microsoft: Did Consumers Win? By David S. Evans; Albert L. Nichols; Richard Schmalensee

  1. By: Stephen Littlechild
    Abstract: The main Nordic residential electricity markets (Norway, Sweden and Finland) effectively opened to retail competition around 1998. They have not been subject to regulatory controls on prices or other contract terms. Between 11 and 29 per cent of residential customers have switched suppliers and between a fifth and a half of all residential customers have chosen alternative contractual terms of supply. These alternatives include fixed price contracts ranging from 3 months to five years duration, as well as spot-price related terms, instead of the standard variable tariffs. The use of these alternatives is increasing over time, and there is considerable product innovation. This paper surveys these developments and illustrates with case studies of significant suppliers in each Nordic market. The market is thus ascertaining and bringing about the outcomes that customers prefer. Without retail competition, it is not clear how regulation will replicate this aspect of the market process.
    Keywords: retail competition, electricity, regulation, Nordic countries
    JEL: L94 L L51
    Date: 2005–11
    URL: http://d.repec.org/n?u=RePEc:cam:camdae:0550&r=ind
  2. By: Gerda Dewit (National University of Ireland Maynooth); Dermot Leahy (University College Dublin)
    Abstract: We study the strategic investment behaviour of oligopsonistic rivals in the labour market. Under wage competition, firms play "puppy dog" with productivityaugmenting investment and "fat cat" with supply-enhancing investment. Under employment competition, investing strategically always involves playing "top dog".
    Keywords: Oligopsony,Strategic behaviour,Productivity-augmenting investment
    JEL: L13 J42
    Date: 2005–09
    URL: http://d.repec.org/n?u=RePEc:may:mayecw:n1590905&r=ind
  3. By: David S. Evans; Albert L. Nichols; Richard Schmalensee
    Abstract: U.S. v. Microsoft and the related state suit filed in 1998 appear finally to have concluded. In a unanimous en banc decision issued in late June 2004, the D.C. Circuit Court of Appeals rejected challenges to the remedies approved by the District Court in November 2002. The wave of follow-on private antitrust suits filed against Microsoft also appears to be subsiding. In this paper we review the remedies imposed in the United States, in terms of both their relationship to the violations found and their impact on consumer welfare. We conclude that the remedies addressed the violations ultimately found by the Court of Appeals (which were a subset of those found by the original district court and an even smaller subset of the violations alleged, both in court and in public discourse) and went beyond them in important ways. Thus, for those who believe that the courts were right in finding that some of Microsoft's actions harmed competition, the constraints placed on its behavior and the active, ongoing oversight by the Court and the plaintiffs provide useful protection against a recurrence of such harm. For those who believe that Microsoft should not have been found liable because of insufficient evidence of harm to consumers, the remedies may be unnecessary, but they avoided the serious potential damage to consumer welfare that was likely to accompany the main alternative proposals. The remedies actually imposed appear to have struck a reasonable balance between protecting consumers against the types of actions found illegal and harming consumers by unnecessarily restricting Microsoft's ability to compete.
    JEL: K21 L1 L4 L6
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:11727&r=ind

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