nep-ind New Economics Papers
on Industrial Organization
Issue of 2008‒07‒05
two papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. A Political Economy Model of Merger Policy in International Markets By Motta, Massimo; Ruta, Michele
  2. Game-theoretical, Strategic forward Contracting in the Electricity Market By Holmberg, Pär

  1. By: Motta, Massimo; Ruta, Michele
    Abstract: This paper looks at the political economy of merger policy under autarky and in international markets. We assume that merger policy is decided by antitrust authorities (whose objective is to maximize welfare) but can be influenced by governments, which are subject to lobbying by the firms (be they insiders or outsiders to the merger). We argue that political economy distortions may explain some of the recently observed merger policy conflicts between authorities and politicians, as well as between institutions belonging to different countries. We illustrate our analysis with applications motivated by recent merger cases, which have been widely debated in the international press.
    Keywords: Antitrust policy; European Union; Lobbying; Mergers
    JEL: D72 F59 H11 L40
    Date: 2008–06
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:6894&r=ind
  2. By: Holmberg, Pär (Research Institute of Industrial Economics (IFN))
    Abstract: Forward sales is a credible commitment to aggressive spot market bidding, and it mitigates producers’ market power in electricity markets. Still it can be profitable for a producer to make such a commitment if it results in a soft response from competitors in the spot market (strategies are substitutes). The optimal contracting level of a risk-neutral producer is determined by the extent to which strategies are substitutes and the slope of the residual demand in the forward market. Conditions under which strategies are substitutes are identified for a two-stage game with supply function competition and capacity constrained producers.
    Keywords: Supply Function Equilibrium; Forward Market; Strategic Contracting; Arbitrage; Strategic Substitutes; Oligopoly; Electricity Market
    JEL: C72 D43 D44 G13 L13 L94
    Date: 2008–06–24
    URL: http://d.repec.org/n?u=RePEc:hhs:iuiwop:0756&r=ind

This nep-ind issue is ©2008 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 http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. 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.