nep-ind New Economics Papers
on Industrial Organization
Issue of 2009‒01‒31
three papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Last-In First-Out Oligopoly Dynamics By Jaap H. Abbring; Jeffrey R. Campbell
  2. Market Power and Vertical and Horizontal Integration in the Maritime Shipping and Port Industry By Eddy van de Voorde; Thierry Vanelslander
  3. Bank Competition Efficiency in Europe: A Frontier Approach By Wilko Bolt; David Humphrey

  1. By: Jaap H. Abbring; Jeffrey R. Campbell
    Abstract: This paper extends the static analysis of oligopoly structure into an infinite-horizon setting with sunk costs and demand uncertainty. The observation that exit rates decline with firm age motivates the assumption of last-in first-out dynamics: An entrant expects to produce no longer than any incumbent. This selects an essentially unique Markov-perfect equilibrium. With mild restrictions on the demand shocks, sequences of thresholds describe firms' equilibrium entry and survival decisions. Bresnahan and Reiss's (1993) empirical analysis of oligopolists' entry and exit assumes that such thresholds govern the evolution of the number of competitors. Our analysis provides an infinite-horizon game-theoretic foundation for that structure.
    JEL: L13
    Date: 2009–01
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:14674&r=ind
  2. By: Eddy van de Voorde; Thierry Vanelslander
    Abstract: The maritime sector is undergoing constant change, as is particularly apparent in the shift in competition that has unfolded in recent years. Whereas in the past shipowners and ports used to compete with one another, the competitive struggle is now increasingly unfolding at the level of logistics chains. Today, market players are selected not so much for their stand-alone competitiveness, but on the basis of whether or not they belong to a successful maritime logistics chain. This explains why certain market players are continuously trying to gain greater control over these chains, including through vertical and horizontal alliances, mergers and acquisitions. This contribution considers in greater detail these concerted efforts to increase market power through extensive integration. First, we deal with the competitive shifts that have occurred in the port and maritime arena. Subsequently, we look at the strategic behaviour exhibited by the main market players (shipowners, terminal operating companies, port authorities, logistics service providers, etc) and analyse their objectives. Finally, we assess the consequences of the strategies pursued in the context of the anticipated future scenarios.
    Date: 2009–01
    URL: http://d.repec.org/n?u=RePEc:oec:itfaaa:2009/2-en&r=ind
  3. By: Wilko Bolt; David Humphrey
    Abstract: There are numerous ways to indicate the degree of banking competition across countries. Antitrust authorities rely on the structure-conduct-performance paradigm while academics prefer price mark-ups (Lerner index) or correlations of input costs with output prices (H-statistic). These measures are not always strongly correlated when contrasted across countries or positively correlated within countries over time. Frontier efficiency analysis is used to devise an alternative indicator of competition and rank European countries by their dispersion from a \competition frontier". The frontier is determined by how well payment and other costs explain variations in loan-deposit rate spread and non-interestactivity revenues.
    Keywords: Banking competition; frontier analysis; European banks
    JEL: C31 F21 F23 F43 O47
    Date: 2009–01
    URL: http://d.repec.org/n?u=RePEc:dnb:dnbwpp:194&r=ind

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