nep-ind New Economics Papers
on Industrial Organization
Issue of 2016‒04‒16
four papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Does the Nature of Piracy and Competition Matter? By Yuanzhu Lu; Sougata Poddar
  2. Organisational mergers: a behavioural perspective on identity management By Giessner, S.R.
  3. How mergers affect innovation: Theory and evidence from the pharmaceutical industry By Haucap, Justus; Stiebale, Joel
  4. Market Power and Joint Ownership: Evidence from Nuclear Plants in Sweden By Lundin, Erik

  1. By: Yuanzhu Lu (China Economics and Management Academy, Central University of Finance and Economics, Beijing, China); Sougata Poddar (Department of Economics, Faculty of Business and Law, Auckland University of Technology)
    Abstract: We explore whether the nature of piracy or the counterfeiting activity and the competition between the copyright holder and the pirate(s) matter in a given regime of Intellectual Property Right (IPR) protection. Generally, the nature of piracy can be of two types, commercial and end-user; and the nature of competition between copyright holder and if the pirate is commercial can be either in price or quantity depending on the pirated good. We find irrespective of the nature of piracy or competition, when the consumers’ tastes are sufficiently diverse and IPR protection is weak, it is profitable for the copyright holder to accommodate the pirate(s), while deter the pirate(s) in all other situations. The relationship between the quality of pirated good and piracy rate can be monotonic or non-monotonic. Piracy is more likely to survive under commercial piracy than under end-user piracy. The relationship between private and public anti-piracy measures is non-monotonic.
    Keywords: IPR protection, private copyright protection, piracy rate, product quality, commercial piracy, end-user piracy
    JEL: D23 D43 L13 L86 O3
    Date: 2015–04
    URL: http://d.repec.org/n?u=RePEc:aut:wpaper:201504&r=ind
  2. By: Giessner, S.R.
    Abstract: Organisational mergers are one of the most extreme forms of organisational change processes. Consequently, they often result in difficulties for employees to adjust to the altered organisational conditions. This is often reflected in low levels of employee identification with the post-merger organisation. As a result, merging organisations experience more conflict, less employee motivation, higher turnover and lower performance levels. These low levels of post-merger identification thus often put the strategic and financial goals of the merger at risk. I argue that an organisational behaviour perspective focusing on the management of identity levels during an organisational merger provides important practical insights for employee management. I will first explain why I am personally so fascinated by this topic. I will then present an identity management perspective on organisational mergers. Here, I will consider three key aspects: (1) Identity processes; (2) Intergroup structure; and (3) Leadership. I will conclude by giving an overview of the potential challenges and directions for future research in this field.
    Keywords: mergers, acquisitions, esprit de corps, identity management, post-merger identification, social identity, human resource management, employee adjustment, uncertainty
    JEL: G34 L22 M12 M14
    Date: 2016–04–01
    URL: http://d.repec.org/n?u=RePEc:ems:euriar:79983&r=ind
  3. By: Haucap, Justus; Stiebale, Joel
    Abstract: This papers analyses how horizontal mergers affect innovation activities of the merged entity and its non-merging competitors. We develop an oligopoly model with heterogeneous firms to derive empirically testable implications. Our model predicts that a merger is more likely to be profitable in an innovation intensive industry. For a high degree of firm heterogeneity, a merger reduces innovation of both the merged entity and non-merging competitors in an industry with high R&D intensity. Using data on horizontal mergers among pharmaceutical firms in Europe, we find that our empirical results are consistent with many predictions of the theoretical model. Our main result is that after a merger, patenting and R&D of the merged entity and its non-merging rivals declines substantially. The effects are concentrated in markets with high innovation intensity and a high degree of firm heterogeneity. The results are robust towards alternative specifications, using an instrumental variable strategy, and applying a propensity score matching estimator.
    Keywords: mergers & acquisitions,innovation,R&D incentives,merger policy
    JEL: D22 L13 L4 G34 O31
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:zbw:dicedp:218&r=ind
  4. By: Lundin, Erik (Research Institute of Industrial Economics (IFN))
    Abstract: This paper presents an empirical test of the anticompetitive effects of joint ownership, by examining the operation of three nuclear plants in Sweden. Since maintenance is the main conduit explaining the variation in output, I formulate a model of intertemporal choice in which firms choose how to allocate a given amount of maintenance within each year. Using data on production and bidding curves on the day-ahead market, I test the model against data given three behavioral assumptions: Unilateral profit maximization; joint profit maximization; and a social planner. Modeling for joint profit maximization best matches data, indicating that joint ownership has facilitated coordination of maintenance decisions. Terminating the joint ownership and modeling for unilateral profit maximization would lead to a 5 percent decrease in prices and a 6 percent decrease in system production costs. I identify positive supply shocks in the form of inflow to the hydro power reservoirs as important determinants of the incentives to exercise market power. Therefore, the mechanisms discussed in this paper should be of relevance also in other electricity markets where the share of intermittent production is increasing. As a motivation for the structural exercise,I use a difference-in-differences estimator to identify a shift in the allocation of maintenance towards the winter season (when demand and prices are peaking) at the time of the introduction of the joint ownership. This is in line with the results from the structural model, as the ability to influence the price is also higher during the winter season.
    Keywords: Joint ownership; Electricity; Nuclear; Maintenance; Collusion
    JEL: D22 D43 D44 D92
    Date: 2016–02–29
    URL: http://d.repec.org/n?u=RePEc:hhs:iuiwop:1113&r=ind

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