nep-ind New Economics Papers
on Industrial Organization
Issue of 2011‒05‒07
three papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Intertemporal Price Discrimination in Storable Goods Markets By Igal Hendel; Aviv Nevo
  2. Retail Power Market Competition with Endogenous Entry Decision-An Auction Data Analysis By Nobuhiro Hosoe; Shingo Takagi
  3. Firm Characteristics and the Cyclicality of R&D Investments By Spyros Arvanitis; Martin Woerter

  1. By: Igal Hendel; Aviv Nevo
    Abstract: We study intertemporal price discrimination when consumers can store for future consumption needs. To make the problem tractable we offer a simple model of demand dynamics, which we estimate using market level data. Optimal pricing involves temporary price reductions that enable sellers to discriminate between price sensitive consumers, who anticipate future needs, and less price-sensitive consumers. We empirically quantify the impact of intertemporal price discrimination on profits and welfare. We find that sales: (1) capture 25-30% of the profit gap between non-discriminatory and third degree price discrimination profits, and (2) increase total welfare.
    JEL: D43 E3 E30 L1 L13
    Date: 2011–04
  2. By: Nobuhiro Hosoe (National Graduate Institute for Policy Studies); Shingo Takagi (Graduate School of Economics and Business Administration, Hokkaido University)
    Abstract: Deregulation in the electric power industry has been aimed at promoting competition and thereby enhancing the industry's efficiency. We use the auction data of public power procurements to study the impact of the reform on the retail power market in Japan. We quantify this impact by measuring a decline in power charges, controlling for the endogeneity bias caused by the entrants' bid-submission decisions. Our results suggest that power charges would decline by about 0.48 yen/kWh on average when two or more providers bid at an auction.
    Keywords: electric power industry, auction data, public procurement, sample selection bias
    Date: 2011–04
  3. By: Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Woerter (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: Aim of this study is to combine micro-aspects of firm behaviour with macro-aspects of business development and identify market conditions (for example, price competition) and firm characteristics (for example, type of R&D partners) that enable a firm to have a procyclical, anti-cyclical or non-systematic R&D investment behaviour. New elements of our analysis are: (a) the identification in our data of the above three main types of R&D behaviour with respect to the fluctuation of overall economic activity as measured by a standard composite indicator of the business conditions at industry level and (b) the investigation of a series of hypotheses as to innovation-relevant firm characteristics that underline the three different behaviour categories. The empirical results confirm to large extent our hypotheses and allow us to make profiles of the three types of R&D behaviour.
    Keywords: R&D, anti-cyclical behaviour, pro-cyclical behaviour
    JEL: O3
    Date: 2011–04

This nep-ind issue is ©2011 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 For comments please write to the director of NEP, Marco Novarese at <>. 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.