nep-ind New Economics Papers
on Industrial Organization
Issue of 2006‒07‒09
three papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Price Leadership in the Dutch Mortgage Market By Leo de Haan; Elmer Sterken
  2. Tour operators' price strategie in the Balearic Islands By Joaquín Alegre; Maria Sard
  3. Competition and Innovation - Microeconometric Evidence using Finnish Data By Juha Kilponen; Torsten Santavirta

  1. By: Leo de Haan; Elmer Sterken
    Abstract: We study competitive price setting behavior in the Dutch mortgage market, using daily observations on advertised 5- and 10-year mortgage interest rates for a sample of the four largest Dutch banks. We (1) estimate a VECM model, (2) a discrete choice model and (3) a structural conjectural variation model. The results indicate that one of the banks is a price leader, but that waiting for the leader to set the first step does not exclude competitive pricing by the followers.
    Keywords: Mortgage market; Competition; Price leadership; VECM; Probit; Conjectural variation.
    JEL: G21 L13
    Date: 2006–06
    URL: http://d.repec.org/n?u=RePEc:dnb:dnbwpp:102&r=ind
  2. By: Joaquín Alegre (Universitat de les Illes Balears); Maria Sard (Universitat de les Illes Balears)
    Abstract: In this paper we analyse the package tours prices from a sample of British and German tour operators. The offers correspond to one-week tourist packages in the Balearic Islands in a specific hotel establishment. The period studied comprises the 2002 and 2003 high seasons, what provides us with a dynamic perspective. The paper shows the existence of persistent differences in the mean prices from tour operators, as well as price distributions with different dispersion and shape among tour operators and markets. The time variation of these distributions seems to be linked to the market situation and structure. Although the paper is presented as an empirical investigation, the results can be interpreted in the context of theoretical literature on price dispersion.
    Keywords: price dispersion, tour operators’ industry
    JEL: L11 L83
    Date: 2006–06
    URL: http://d.repec.org/n?u=RePEc:ubi:deawps:19&r=ind
  3. By: Juha Kilponen; Torsten Santavirta
    Abstract: The relationship between product market competition (PMC) and innovative activity has attracted the attention of many economists lately. In this study we elaborate the theory of Aghion et al. (1997, 2001) of an inverted-U relationship between competition and innovations. We provide a theoretical prediction of a complementary relationship between the incentive effects of PMC and R&D subsidies. We empirically test our complementarity prediction and that of an inverted-U relationship using Finnish firm level data. Our results suggest that the inverted-U relationship is fairly robust to all our innovation measures. We also find that the inverted-U relationship tends to be steeper when also direct R&D subsidies are considered. This result suggests that there exists complementarity between competition and R&D subsidies.
    Keywords: Product market competition, Innovation, R&D subsidies
    JEL: O31 O10 O30 L10
    Date: 2004–11–15
    URL: http://d.repec.org/n?u=RePEc:fer:resrep:113&r=ind

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