nep-ind New Economics Papers
on Industrial Organization
Issue of 2006‒09‒11
four papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Competition:an inspirational marketing tool By Waarts, E.
  2. Efficiency Measurement and Regulation in U.S. Telecommunications: A Robustness Analysis By Marcelo Resende
  3. Single or Multiple Pricing in Electricity Pools? By Ahmed Anwar
  4. Holiday Non-Price Rigidity and Cost of Adjustment By Georg Müller; Mark Bergen; Shantanu Dutta; Daniel Levy

  1. By: Waarts, E. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Competition is the engine behind innovation and dynamics in the marketplace. Sectors like public transport,water,energy and telecom are liberalized and deregulated by nationalandinternationalgovernmentsinordertoincreasecompetitionamongcompanies. The ultimate goals are to create transparent markets with ample opportunities for new firms to enter, fair prices and a varied, innovative range of consumer products and services. Competition may indeed stimulate firms to run faster, and to create better products and services by using effectivemarketing practices.This can,for example,readily be observed in the high technology sector. In that sense, competition can be an inspirational and stimulating marketing tool. At the same time, competition can have destructive effectsaswell,whenfirms’primarygoalsbecometobeat orharmtheircompetitors.Thiswas, for example, recently the case in a taxi war in Amsterdam. Constructive and destructive behaviours are partly determined by both the characteristics and rules of the market, the manager and his company. Research is required to fully understand the effects of the various factors on competitive behaviour and subsequently on the performance of the market. This is essential, both for theory development, and for governments, companies and consumers as well.
    Keywords: marketing research;marketing strategy;competition;innovation;competitive interaction;industry;drivers;company performance;
    Date: 2004–08–26
  2. By: Marcelo Resende
    Abstract: The paper investigates the robustness of different efficiency measures that can support the implementation of diverse forms of incentive regulation in the context of U.S. telecommunications. Comparisons, in terms of an output orientation, are considered for efficiency scores obtained from Data Envelopment Analysis (DEA), distance function (with corrected ordinary least squares and a random effects model) and distance function embedded in a stochastic frontier framework (with time invariant, time varying efficiencies or with inefficiency effects). Similarly to the previous empirical literature, one finds, in most cases, only a moderate consistency across the different approaches. In fact, the different spectrum of techniques imposed varied degrees of structure in the error term and indicated non-negligible discrepancies across the different measurement approaches in terms of the ranking structure, degree of persistence and best and worst practices patterns.
    Keywords: efficiency measurement, yardstick regulation
    JEL: D29 L59 L96
    Date: 2006
  3. By: Ahmed Anwar
    Abstract: We present a 2 bidder multi-unit, common cost auction model with uncertain demand and capacity constraints which ensure that the participants sometimes face a residual market share. The model is motivated by electricity pools. We show that a single-price auction where the bidders can submit only one bid for all units weakly dominates an auction where the bidders can make multiple-price bids in terms of average prices. In the case of uniform price auctions we give an example where the dominance is strict.
    Keywords: Electricity Pool, Multi-Unit Auction, Revenue Ranking
    JEL: D44 L13 L94
  4. By: Georg Müller; Mark Bergen; Shantanu Dutta; Daniel Levy
    Abstract: There has been increasing interest in understanding how firms undertake non-price adjustment activities, especially in situations where prices may be rigid despite changes in market conditions. Using scanner price data for over 4,500 different food products from a large US supermarket chain, we document periods of rigidity in product additions and deletions: new products are less likely to be introduced, and existing products are less likely to be discontinued during holiday periods than throughout the rest of the year. We argue that this is due to higher costs of undertaking these kinds of product assortment activities during holiday periods. We discuss how this relates to the exiting literature on non-price adjustment and price rigidity.
    Date: 2006–09

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