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on Industrial Organization |
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Issue of 2009‒06‒17
six papers chosen by |
| By: | Matti Liski; Juan-Pablo Montero |
| Abstract: | It has been long recognized that an exhaustible-resource monopsonist faces a commitment problem similar to that of a durable-good monopolist. Indeed, Hörner and Kamien (2004) demonstrate that the two problems are formally equivalent under full commitment. We show that there is no such equivalence in the absence of commitment. The existence of a choke price at which the monopsonist adopts the substitute (backstop) supply divides the surplus between the buyer and the sellers in a way that is unique to the resource model. Sellers receive a surplus share independently of their cost heterogeneity; a result in sharp contrast with the durable-good monopoly logic. The resource buyer can distort the equilibrium through delayed purchases, but the Coase conjecture arises under extreme patience (zero discount rate). |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:0903&r=ind |
| By: | Lach, Saul; Moraga-González, José-Luis |
| Abstract: | This paper examines how the distribution of prices changes with the number of competitors in the market. Using gasoline price data from the Netherlands we find that as competition increases, the distribution of prices spreads out: the low prices go down while the high prices go up, on average. As a result, competition has an asymmetric effect on prices. These findings, which are consistent with a theoretical model where consumers differ in the information they have about prices, imply that consumers' gains from competition depend on their shopping behavior. In our data, all consumers, irrespective of the number of prices they observe, benefit from an increase in the number of gas stations. The magnitude of the welfare gain, however, is greater for those consumers that are aware of more prices. We conclude that an increase in the number of gas stations has a positive but unequal effect on the welfare of consumers in the Netherlands. |
| Keywords: | gasoline prices; imperfect information; number of firms; price distribution |
| JEL: | L1 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:7319&r=ind |
| By: | Pollock, R. |
| Abstract: | The rapid growth of online search and its centrality to the ecology of the Internet raise many questions for economists to answer: Why is the search engine market so concentrated and will it evolve towards monopoly? What implications does this concentration have for consumers, search engines, and advertisers? Does search require regulation and if so in what form? This paper supplies empirical and theoretical material with which to examine these questions. In particular, we (a) show that the already large levels of concentration are likely to continue (b) identify the consequences, negative and positive, of this outcome (c) discuss the regulatory interventions that policy-makers could use to address these. |
| Keywords: | Search Engine, Regulation, Competition, Antitrust, Technology |
| JEL: | L40 L10 L50 |
| Date: | 2009–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0921&r=ind |
| By: | Marco GAMBARO |
| Abstract: | Media policies encompass a large array of activities and interventions carried out by governments and institutions to coordinate, promote, address and sometimes to control media industries. In Europe, different media are subject to different degrees and different kind of regulations. While record industry is practically neglected by public authorities, television is strongly considered both in market structure and in firm conduct, entry is strictly regulated and in many countries the set of choices in programming and advertising market are restricted. Book publishing and film production are both supported with specific financing and a lot of attention but the former is much less considered and regulated than the latter. Newspapers attract more policies and more financing than magazines and professional press operate at the edge of public attention. The availability of adequate information is one of the most important conditions for making markets and political systems work efficiently. The power of influencing, enhancing or concealing information on certain events may have relevant consequences for consumers and citizens. There are multidimensional relationships between the quality of information supplied by mass media, the competition in information and good markets, and the making of public policies. Media are undergoing constant change in many countries and the convergence with telecommunication made possible by digitalization has resulted in a number of new offer and significant transformations. While in the past different media were pretty separate industries with own value chains and distribution channels, the convergence process enable new product, new substitution pattern and a different kind of competition. For instance, the informative web site of newspapers, television and search engines appear much more similar than the original media. Regulation and policy follow the same pattern, and need to become more horizontal and media independent. The control of concentration level become a problem since the reference market can be different for each product and the simple cross ownership rules risk to be inadequate. Evolving media landscape pose new problems that national and European institution need to address in order to maintain and promote social and economic functions vital for societies. |
| Keywords: | Information quality, information variety, pluralism, competition, media industries, regulation |
| JEL: | L82 L52 |
| Date: | 2008–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:mil:wpdepa:2008-28&r=ind |
| By: | Carlo Vittorio FIORIO; Massimo FLORIO |
| Abstract: | The research question addressed by this paper is a simple one: are European consumers happy with the electricity supply services after two decades of reforms? We focus on self-assessed consumers’ satisfaction with electricity prices as reported in three waves of Eurobarometer survey, 2000-2002-2004, conditioning on some indicators of public ownership, vertical integration and entry regulation across the EU-15. Our results do not support a systematic association between consumers’ satisfaction and the complete reform package made of privatisation, vertical disintegration and liberalisation. These results, which have been extensively tested for robustness, raise various concerns about the way the reform processes have been undertaken and provides some warnings about possible effects on public support for public utility reforms. |
| Keywords: | Consumers’ satisfaction, electricity, privatisation, vertical disintegration, liberalisation |
| JEL: | L94 L95 L96 L50 |
| Date: | 2008–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:mil:wpdepa:2008-12&r=ind |
| By: | Fattouh, Bassam (School of Oriental and African Studies (SOAS), University of London, and Senior Research Fellow at the Oxford Institute for Energy Studies (OIES).) |
| Abstract: | This paper discusses three main approaches for analysing oil prices: non-structural models, the supplydemand framework, and the informal approach. Each approach emphasises a certain set of drivers of oil prices. While non-structural models rest on the theory of exhaustible resources, the supply-demand framework uses behavioural equations that link oil demand and supply to its various determinants. The informal approach focuses on the specifics of oil market history in explaining oil prices. Although all approaches provide useful insights on how the world oil market functions, they suffer from major limitations especially when used for long-term projections. Thus, pushing hard for policies based on such projections defeats the purpose of such models and may result in misguided policies. |
| Keywords: | Oil prices; forecasting models |
| JEL: | C53 Q40 Q41 Q43 |
| Date: | 2007–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:ris:eibpap:2007_006&r=ind |