nep-ind New Economics Papers
on Industrial Organization
Issue of 2005‒12‒01
five papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  2. Does Third Degree Price Discrimination Reduce Social Welfare? By Debashis Pal; Victor Kaftal
  3. Monopolization through acquisitions in a differentiated product industry By Emilie Dargaud
  4. Prices, Production, and Inventories Over the Automotive Model Year By George Hall; Adam Copeland; Wendy Dunn
  5. "Download for Free" - When Do Providers of Digital Goods Offer Free Samples? By Anette Boom

  1. By: Nauro F. Campos; Mariana Iootty
    Abstract: What are the determinants of firm entry and exit in Brazil? How do entry and exit rates affect productivity? This paper tries to answer these questions using panel data for about 104 Brazilian manufacturing sectors (3-digit level) for the period 1996 to 2002. Our results show that the share of exports in sectoral output is one main determinant of entry and exit rates. The results also suggest that in years of real per capita GDP decline, export propensity is associated with entry rates, while in years of GDP expansion, sectoral growth is positively associated with net entry. Finally, our results show that exit (and to a lesser extent, entry and net entry) is a very robust determinant of total factor productivity across industrial sectors in Brazil.
    JEL: L6 C33 O12
    Date: 2005
  2. By: Debashis Pal; Victor Kaftal
    Abstract: We analyze the welfare impact of monopolistic third degree price discrimination when all markets are not necessarily served by uniform pricing. We consider n markets with linear demand curves. Each demand is characterized by the price intercept of the demand curve and by the size of the market as measured by the area under the demand curve. Based on these two exogenous parameters, we (i) establish the necessary and su¢ cient conditions to determine the number of markets to be served under uniform pricing, (ii) derive the necessary and su¢ cient conditions to determine the direction of the welfare change under third degree price discrimination, (iii) determine minimally su¢ cient conditions for all markets being served under uniform pricing, involving either the market sizes or the price intercepts of demands alone, and (iv) derive minimally su¢ cient conditions, involving market sizes alone, for third degree price discrimination to increase welfare when all markets are not served by uniform pricing.
    Date: 2005
  3. By: Emilie Dargaud (GATE CNRS)
    Abstract: This article analyzes the incentive to merge in a context of price competition with horizontal product differentiation. In contrast to the results obtained by Kamien and Zang (1990), we show that merged equilibria can appear in this game. Moreover monopolization of the industry occurs with a high number of firms.
    Keywords: Mergers, Oligopoly, Cooperative game
    JEL: L10 L11 L20
    Date: 2005–11
  4. By: George Hall (Department of Economics Yale University); Adam Copeland; Wendy Dunn
    Keywords: dynamic pricing, discrete choice demand estimation, dynamic programming, revenue management
    JEL: L11 L62
    Date: 2005
  5. By: Anette Boom (Freie Universität Berlin)
    Abstract: In a monopoly setting where consumers cannot observe the quality of the product we show that free samples which are of a lower quality than the marketed digital goods are used together with high prices as signals for a superior quality if the number of informed consumers is small and if the difference between the high and the low quality is not too small. Social welfare is higher, if the monopolist uses also free samples as signals, compared to a situation where he is restricted to pure price signalling. Both, the monopolist and consumers benefit from the additional signal.
    Keywords: Digital Goods, Free Samples, Multi-dimensional Signalling
    JEL: D21 D82 L15
    Date: 2004–09

This nep-ind issue is ©2005 by Kwang Soo Cheong. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.