nep-ind New Economics Papers
on Industrial Organization
Issue of 2010‒10‒09
six papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. On R&D Information Sharing and Merger By Uday Bhanu Sinha
  2. Price Wars in Two-Sided Markets: The case of the UK Quality Newspapers By Timothy Keller; David Miller; Xiahua (Anny) Wei
  3. Regulating Knowledge Monopolies: The Case of the IPCC By Tol, Richard S. J.
  4. Market Regulation and Competition; Law in Conflict: A View from Ireland, Implications of the Panda Judgment By Andrews, Philip; Gorecki, Paul K.
  5. Exporting and performance: Market entry, expansion and destination characteristics By Richard Fabling and Lynda Sanderson
  6. Contribution of individual to collective brands By Francisco Mas Ruiz; Juan Luis Nicolau Gonzálbez

  1. By: Uday Bhanu Sinha
    Abstract: The paper deals with the issue of information sharing in a Cournot duopoly by an innovating firm in the face of a merger with its rival. The innovating firm would share information about the cost realization with its rival provided the market size is relatively small or, the R&D technology is relatively more efficient in a medium market size. However, in a large market, or in a medium market size with less efficient R&D technology, the innovating firm does not share information with its rival. They also show that the social welfare may be higher under incomplete information regime. [Working Paper No. 145]
    Keywords: Information sharing, market size, R&D, merger and welfare
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:ess:wpaper:id:2908&r=ind
  2. By: Timothy Keller (Department of Economics, University of California, San Diego); David Miller (Department of Economics, University of California, San Diego); Xiahua (Anny) Wei (Department of Economics, University of California, San Diego)
    Abstract: We study duopoly pricing in the market for mobile phone service, which features network externalities, switching costs, and consumer heterogeneity. We introduce a steady state approach that enables a tractable analysis without endgame effects. The model can generate a variety of testable predictions, of which we focus on the comparative statics with respect to switching costs. Using data on the mobile phone service industries in 52 countries, we use the variation in market structure at the time switching costs were suddenly reduced by the regulatory imposition of mobile number portability (MNP). Firms that grew more rapidly prior to MNP respond to MNP by pricing more aggressively; firms facing large competitors respond less aggressively. Exploration of the model and its implications is an object of ongoing research.
    Keywords: Oligopoly, network externalities, switching costs, mobile number portability.
    JEL: L13
    Date: 2010–09
    URL: http://d.repec.org/n?u=RePEc:net:wpaper:1019&r=ind
  3. By: Tol, Richard S. J.
    Abstract: The Intergovernmental Panel on Climate Change has a monopoly on the provision of climate policy advice at the international level and a strong market position in national policy advice. This may have been the intention of the founders of the IPCC. I argue that the IPCC has a natural monopoly, as a new entrant would have to invest time and effort over a longer period to perhaps match the reputation, trust, goodwill, and network of the IPCC. The IPCC is a not-for-profit organization, and it is run by nominal volunteers; it therefore cannot engage in the price-gouging that is typical of monopolies. However, the IPCC has certainly taken up tasks outside its mandate; the IPCC has been accused of haughtiness; innovation is slow; quality may have declined; and the IPCC may have used its power to hinder competitors. There are all things that monopolies tend to do, against the public interest. The IPCC would perform better if it were regulated by an independent body which audits the IPCC procedures and assesses its performance; if outside organizations would be allowed to bid for the production of reports and the provision of services under the IPCC brand; and if policy makers would encourage potential competitors to the IPCC.
    Keywords: Climate change/IPCC/natural monopoly/regulation/policy advice/Climate change/Climate policy/Policy
    Date: 2010–09
    URL: http://d.repec.org/n?u=RePEc:esr:wpaper:wp350&r=ind
  4. By: Andrews, Philip; Gorecki, Paul K.
    Abstract: On 21 December 2009 the Irish High Court found that a regulatory proposal, the Variation, by the four Dublin local authorities, is a breach of national competition law. The Variation allows a single operator to collect household waste, irrespective of whether the operator is selected by competitive tender or the local authority reserves the collection function to itself. The judgment has important, possibly groundbreaking, implications. Local government is held to be an undertaking and hence its decisions susceptible to review and prohibition under national competition rules. The burden of the paper is, however, that the local authorities are not undertakings for the purposes of competition law when they made the Variation. Even if the local authorities were undertakings in this regard, competitive tendering for selecting a single operator to collect household waste collection is neither an anti-competitive agreement nor an abuse of a dominant position. If, however, the High Court judgment is affirmed by the Supreme Court on appeal, then the wider implications of the judgment will need to be explored.
    Keywords: competition policy/regulation/geographic market definition/abuse of dominance/collective dominance/household waste collection/definition of an undertaking/anticompetitive agreement/Article 86/Competition Act 2002/Waste Management Acts,1996-2007
    Date: 2010–09
    URL: http://d.repec.org/n?u=RePEc:esr:wpaper:wp353&r=ind
  5. By: Richard Fabling and Lynda Sanderson (Reserve Bank of New Zealand)
    Abstract: We examine the effect of export market entry on New Zealand firm performance. Our novel contribution to the literature is the treatment of export status as an incremental process, in which firms may export to one or more markets with each of these markets providing additional potential for learning to occur. Focussing on new markets provides several benefits. Since we use matching techniques to account for self-selection, controlling for firm export histories reduces the problem of selection on unobservables (such as managerial preferences) which would confound a causal interpretation. Also, most new market entry is undertaken by incumbent exporters, providing a large number of events on which to test the learning-by-exporting (LBE) hypothesis.
    JEL: C23 D10 R20
    Date: 2010–01
    URL: http://d.repec.org/n?u=RePEc:nzb:nzbdps:2010/07&r=ind
  6. By: Francisco Mas Ruiz (Universidad de Alicante); Juan Luis Nicolau Gonzálbez (Universidad de Alicante)
    Abstract: Traditionally, literature estimates the equity of a brand or its extension but it pays little attention to collective brand equity even though collective branding is increasingly used to differentiate the homogenous products of different firms or organizations. We propose an approach that estimates the incremental effect of individual brands (or the contribution of individual brands) on collective brand equity through the various stages of a consumer hierarchical buying choice process in which decisions are nested: “whether to buy”, “what collective brand to buy” and “what individual brand to buy”. This proposal follows the approach of the Random Utility Theory, and it is theoretically argued through the Associative Networks Theory and the cybernetic model of decision making. The empirical analysis carried out in the area of collective brands in Spanish tourism finds a three-stage hierarchical sequence, and estimates the contribution of individual brands to the equity of the collective brands of “Sun, Sea and Sand” and of “World Heritage Cities”. La literatura ha puesto énfasis en el análisis del valor de una marca o sus extensiones, pero se ha centrado menos en el valor de la marca colectiva, aunque su uso empresarial sea cada vez mayor con el fin de diferenciar los productos homogéneos de diferentes organizaciones. Proponemos un enfoque que estima el efecto incremental de las marcas individuales (es decir, la contribución individual de cada marca) en el valor de la marca colectiva a través de un proceso de compra jerárquica en varias etapas en el que las decisiones están anidadas: “si comprar o no”, “qué marca colectiva comprar” y “qué marca individual comprar”. Esta propuesta sigue el enfoque de la Teoría de la Utilidad Aleatoria, y se argumenta a través de la Teoría de Redes Asociativas y el Modelo Cibernético de Decisión. La aplicación empírica desarrollada en el área de las marcas turísticas colectivas detecta una secuencia en tres etapas, y estima la contribución de las marcas individuales en el valor de las marcas colectivas “Sol y playa” y “Ciudades Patrimonio de la Humanidad”.
    Keywords: valor de marca colectiva, proceso de elección multi-etápico, Modelo Logit con coeficientes aleatorios collective brand equity, consumer multi-stage choice process, random parameter Logit Model
    JEL: D11 M31
    Date: 2010–09
    URL: http://d.repec.org/n?u=RePEc:ivi:wpasec:2010-07&r=ind

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