nep-ind New Economics Papers
on Industrial Organization
Issue of 2009‒11‒07
three papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Competition between TV Platforms By Laia Domènech Campmajó
  2. How to Measure the Deterrence Effects of Merger Policy: Frequency or Composition? By Pedro P. Barros; Joseph A. Clougherty; Jo Seldeslachts
  3. Supply Chain Control: A Theory of Vertical Integration By Ursino, Giovanni

  1. By: Laia Domènech Campmajó (PPRE-IREA, University of Barcelona, Spain)
    Abstract: The aim of this paper is to identify the factors that affect the market penetration of pay television by studying the competition that exists between three types of technology (satellite, cable and ADSL). We distinguish three groups of factors: the level of market competition, the level of competition in the industry and the quality of the product being offered. Our results seem to indicate that as market concentration increases, the television service can achieve greater penetration. This relationship is specifically captured by the level of intra- and inter-platform competition. We also examine the relationship between free television channels and pay television and find that as the amount of time dedicated to the broadcasting of advertising by the former increases, the number of subscribers to pay TV rises. Finally, we examine product quality by introducing the effect of holding the rights to broadcast Professional Football League matches and an HBO or Showtime produced series. Our results suggest that these variables are critical for the penetration of pay television.
    Keywords: pay TV, competition between platforms, telecommunications.
    JEL: L82 L96
    Date: 2009–10
  2. By: Pedro P. Barros; Joseph A. Clougherty; Jo Seldeslachts
    Abstract: We show that the number of merger proposals (frequency-based deterrence) is a more appropriate indicator of underlying changes in merger policy than the relative anti-competitiveness of merger proposals (composition-based deterrence). This has strong implications for the empirical analysis of the deterrence effects of merger policy enforcement, and potential implications regarding how to reduce anti-competitive merger proposals. <br> <br> <i>ZUSAMMENFASSUNG <br>IDiese Studie vergleicht zwei Indikatoren zur Messung der Abschreckungswirkung von wettbewerbspolitischen Maßnahmen. Untersucht wird, welcher Indikator sich besser eignet, Veränderungen in der Strenge oder Laxheit von wettbewerbspolitischen Regimes abzubilden. Es lässt sich feststellen, dass der häufigkeitsbasierte Indikator, der die Anzahl von offiziellen Fusionsankündigungen misst, dazu besser geeignet ist als der zusammengesetzte Abschreckungsindikator, der die angekündigten Unternehmensfusionen im Hinblick auf ihre relative Wettbewerbsbeschränkung im Vergleich zu möglichen anderen Fusionen bewertet. Dieses Ergebnis hat Folgen für die empirische Analyse der Abschreckungseffekte, die eine effektive Fusionskontrolle haben sollte. Außerdem kann es Implikationen haben für die Frage, wie die offizielle Ankündigung von wettbewerbsreduzierenden Fusionen verhindert werden können.<i>
    Keywords: antitrust, deterrence, merger policy
    JEL: L4 K21 O4 C23
    Date: 2009–10
  3. By: Ursino, Giovanni
    Abstract: Improving a company's bargaining position is often cited as a chief motivation to vertically integrate with suppliers. This paper expands on that view in building a new theory of vertical integration. In my model firms integrate to gain bargaining power against other suppliers in the production process. The cost of integration is a loss of flexibility in choosing the most suitable suppliers for a particular final product. I show that the firms who make the most specific investments in the production process have the greatest incentive to integrate. The theory provides novel insights to the understanding of numerous stylized facts such as the effect of financial development on the vertical structure of firms, the observed pattern from FDI to outsourcing in international trade, the effect of technological obsolescence on organizations, etc.
    Keywords: vertical integration; supply chain; bargaining; outside options
    JEL: L2 L1
    Date: 2009–10–01

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