nep-ind New Economics Papers
on Industrial Organization
Issue of 2013‒04‒27
six papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Advertising-induced Embarrassment By Puntoni, S.; Hooge, I.E. de; Verbeke, W.J.M.I.
  2. Entrepreneurship and property right: de Soto'r right By Kodila-Tedika, Oasis
  3. The US and Ireland Approach to Sentencing in Cartel Cases: the Citroen Case By Gorecki, Paul K.; Maxwell, Sarah
  4. Hospital Mergers: A Spatial Competition Approach By Kurt R. Brekke; Luigi Siciliani; Odd Rune Straume
  5. Irish and British Historical Electricity Prices and Implications for the Future By Deane, Paul; FitzGerald, John; Malaguzzi Valeri, Laura; Tuohy, Aidan; Walsh, Darragh
  6. Exploring mobile pricing strategies and innovations in the Thai mobile communications market By Srinuan, Chalita; Srinuan, Pratompong; Bohlin, Erik

  1. By: Puntoni, S.; Hooge, I.E. de; Verbeke, W.J.M.I.
    Abstract: Consumer embarrassment is an important concern for marketers. Yet, little is knownabout embarrassment in passive situations like advertising viewing. The authors investigate when and why consumers experience embarrassment as a result of exposure to socially sensitive advertisements. The theory distinguishes between viewing potentially embarrassing ads together with an audience that shares the social identity targeted by the message and viewing the same ads together with an audience that does not share the targeted social identity. Four studies provide support for the theory, demonstrating that advertising targeting and social context jointly determine feelings of embarrassment and advertising effectiveness.
    Keywords: advertising;social identity;embarrassment;self-conscious emotions
    Date: 2013–04–15
  2. By: Kodila-Tedika, Oasis
    Abstract: Using cross-sectional analysis with new data on entrepreneurship and entrepreneurship, we test the hypothesis of de Soto (1994, 2005) that the right of property is required for hatching entrepreneurship. Given our econometric estimates and our sensitivity tests, the right to property is essential to entrepreneurship. Countries with a higher entrepreneurship are those who respect property rights..
    Keywords: de Soto, entrepreneuriat, droit de propriété, institutions
    JEL: D73 D2 I2 L26 P48
    Date: 2012–12–29
  3. By: Gorecki, Paul K.; Maxwell, Sarah
    Abstract: Developing a coherent evidence based methodology for determining sanctions in cartel cases is vitally important for robust cartel enforcement in Ireland. This methodology should take into account aggravating/mitigating factors for individuals as well as culpability indicators for firms, while at the same time taking cognisance of the economic damage caused by cartels to consumers. Irish Courts, despite presiding over 33 convictions on indictment for cartel offences stretching back over six years have, as yet, to develop such a methodology. While the Duffy judgment, the only reported judgment on sentencing of a cartel member, the Court provides some guidance on sentencing. It states, for example, that cartels are bad and pernicious and that jail sentences are to be expected in future cartel cases. This is not a coherent sentencing methodology. The Sentencing Guidelines, developed by the US Sentencing Commission, provide such a methodology, while at the same allowing for judicial discretion. Applying that methodology to the facts of the Citroen cartel case in Ireland, in which 14 individuals and firms were convicted on indictment, suggests that the current approach to sentencing in Ireland by the Courts results in fines and jail sentences that are too low. This encourages rather than discourages cartel activity which raises prices for consumers and thus damages consumer welfare.
    Keywords: Individuals/Ireland/US
    Date: 2013–01
  4. By: Kurt R. Brekke (Department of Economics and Centre and Health Economics Bergen, Norwegian School of Economics); Luigi Siciliani (Department of Economics and Centre for Health Economics, University of York, Heslington); Odd Rune Straume (Department of Economics, University of Minho)
    Abstract: Using a spatial competition framework with three ex ante identical hospitals, we study the effects of a hospital merger on quality, price and welfare. The merging hospitals always reduce quality, but the non-merging hospital responds by reducing quality if prices are fixed and increasing quality if not. The merging hospitals increase prices if demand responsiveness to quality is sufficiently low, whereas the non-merging hospital always increases its price. If prices are endogenous, a merger leads to higher average prices and quality in the market. A merger is harmful for total patient utility but can improve social welfare under price competition.
    Keywords: Hospital mergers; Spatial Competition; Antitrust
    JEL: I11 I18 L13 L44
    Date: 2013
  5. By: Deane, Paul; FitzGerald, John; Malaguzzi Valeri, Laura; Tuohy, Aidan; Walsh, Darragh
    Abstract: This paper compares retail and wholesale electricity prices in SEM, the market of the island of Ireland, and BETTA in Great Britain. Wholesale costs are much lower in BETTA. We show that this is mostly because the wholesale price in BETTA is set too low to cover generation costs, although it is compensated by large retail margins. The substantial need for new investment in generation in Great Britain suggests that returns to generators will have to increase. Developing a market mechanism to compensate generators fairly while simultaneously reducing retail revenue will help in achieving this goal.
    Keywords: SEM/BETTA/electricity prices/simulation model
    JEL: C63 L94 L98
    Date: 2013–04
  6. By: Srinuan, Chalita; Srinuan, Pratompong; Bohlin, Erik
    Abstract: This paper aims to explore the price plans offered by Thai mobile operators and analyse the role of demand characteristics in the development of new price plans. The paper also shows how demand affects a firm's degree of innovativeness in terms of the number of new price plans. The empirical qualitative analysis is based on an original data set from several secondary data sources and includes all the price plans offered in the history of the Thai mobile communications market between 2002 and 2010. The results show that mobile operators have introduced several innovative price plans to attract and retain their consumers. Although a greater number of price plans can increase competition among operators, some have complex combinations that may lead to confusion for consumers. A price comparison programme should therefore be implemented by the telecom regulator to ensure that consumers receive correct and complete information about the price plans. Most studies, by far, have not extensively discussed this mobile communications market in detail and the effect of innovation on competition between firms in the mobile communications industry, in particular the development of innovation in developing countries. --
    Keywords: pricing strategies,mobile communications market,innovation,Thailand
    Date: 2012

This nep-ind issue is ©2013 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.