nep-ind New Economics Papers
on Industrial Organization
Issue of 2017‒12‒18
five papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. The Strategic Industry Supply Curve By Flavio M. Menezes; John Quiggin
  2. Entry Deterrence and Strategic Alliances By Gayle, Philip; Xie, Xin
  3. Barriers to European cross-border E-commerce By Alex Coad; Nestor Duch-Brown
  4. Modeling the formation of R&D alliances: An agentbased model with empirical validation By Tomasello, Mario Vincenzo; Burkholz, Rebekka; Schweitzer, Frank
  5. Does hospital competition improve efficiency? The effect of the patient choice reform in England By Francesco Longo; Luigi Siciliani; Giuseppe Moscelli; Hugh Gravelle

  1. By: Flavio M. Menezes (School of Economics, The University of Queensland); John Quiggin (School of Economics, The University of Queensland)
    Abstract: In this paper we develop the concept of the strategic industry supply curve, representing the locus of Nash equilibrium outputs and prices arising from additive shocks to demand. We show that the standard analysis of partial equilibrium under perfect competition, including the graphical representa- tion of supply and demand due to Marshall, can be extended to encompass imperfectly competitive markets. Special cases include monopoly, Cournot and Bertrand oligopoly and competition in linear supply schedules. Our approach permits a unified treatment of monopoly, oligopoly and competi- tion, and that it satisfies the five principles of incidence set out by Weyl and Fabinger (2013).
    Keywords: industry supply, cost pass-through, oligopoly
    JEL: D4 L1
    Date: 2017–12–14
    URL: http://d.repec.org/n?u=RePEc:qld:uq2004:586&r=ind
  2. By: Gayle, Philip; Xie, Xin
    Abstract: Researchers have written extensively on the impact that strategic alliances between airlines have on airfare, but little is known of the market entry deterrent impact of strategic alliances. Using a structural econometric model, this paper examines the market entry deterrent impact of codesharing, a form of strategic alliance, between incumbent carriers in domestic air travel markets. We find evidence of market entry deterrence, but deterrence impact depends on the specific type of codesharing between market incumbents as well as the identity of the potential entrant. We quantify the extent to which market incumbents’ codesharing influences potential entrants market entry cost and probability of market entry.
    Keywords: Entry Deterrence; Strategic Alliances; Dynamic Entry/Exit Model; Airline Competition
    JEL: L13 L93
    Date: 2017–12
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:83233&r=ind
  3. By: Alex Coad (European Commission – JRC); Nestor Duch-Brown (European Commission – JRC)
    Abstract: We analyse survey data to investigate the main barriers to European cross-border e-commerce. We investigate the determinants of selling online, as well as the frequency and determinants of cross-border e-commerce, and the role of barriers. Large firms, which are part of a group, are more likely to sell online. Firms generally make most of their online sales to their home country, although EU firms are more likely to engage in cross-border online trade with EU countries than non-EU countries. Firms report that they are facing a variety of barriers to e-commerce. Regulatory barriers are negatively associated with online sales. There is weak evidence that firms which use their own websites are more vulnerable to financial, market and information barriers. Firms that use a large platform experience fewer financial and market barriers. On the positive side, we find that small and young firms do not seem to be more vulnerable to barriers than large or more experienced firms.
    Keywords: digital single market, e-commerce, cross-border trade
    JEL: D23 K11 K12 L86
    Date: 2017–11
    URL: http://d.repec.org/n?u=RePEc:ipt:decwpa:2017-03&r=ind
  4. By: Tomasello, Mario Vincenzo; Burkholz, Rebekka; Schweitzer, Frank
    Abstract: The authors develop an agent-based model to reproduce the size distribution of R&D alliances of firms. Agents are uniformly selected to initiate an alliance and to invite collaboration partners. These decide about acceptance based on an individual threshold that is compared with the utility expected from joining the current alliance. The benefit of alliances results from the fitness of the agents involved. Fitness is obtained from an empirical distribution of agent's activities. The cost of an alliance reflects its coordination effort. Two free parameters ac and a1 scale the costs and the individual threshold. If initiators receive R rejections of invitations, the alliance formation stops and another initiator is selected. The three free parameters (ac; a1; R) are calibrated against a large scale data set of about 15,000 firms engaging in about 15,000 R&D alliances over 26 years. For the validation of the model the authors compare the empirical size distribution with the theoretical one, using confidence bands, to find a very good agreement. As an asset of our agent-based model, they provide an analytical solution that allows to reduce the simulation effort considerably. The analytical solution applies to general forms of the utility of alliances. Hence, the model can be extended to other cases of alliance formation. While no information about the initiators of an alliance is available, the results indicate that mostly firms with high fitness are able to attract newcomers and to establish larger alliances.
    Keywords: R&D network,alliance,collaboration,agent
    JEL: L14
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:zbw:ifwedp:2017107&r=ind
  5. By: Francesco Longo (Centre for Health Economics, University of York, York, UK.); Luigi Siciliani (Department of Economics and Related Studies, University of York, York, UK.); Giuseppe Moscelli (Centre for Health Economics, University of York, York, UK.); Hugh Gravelle (Centre for Health Economics, University of York, York, UK.)
    Abstract: We use the 2006 relaxation of constraints on patient choice of hospital in the English NHS to investigate the effect of hospital competition on dimensions of efficiency including indicators of resource management (admissions per bed, bed occupancy rate, proportion of day cases, cancelled elective operations, proportion of untouched meals) and costs (cleaning services costs, laundry and linen costs, reference cost index for overall and elective activity). We employ a quasi difference-indifference approach and estimate seemingly unrelated regressions and unconditional quantile regressions with data on hospital trusts from 2002/03 to 2010/11. Our findings suggest that increased competition had mixed effects on efficiency. An additional equivalent rival increased admissions per bed and the proportion of day cases by 1.1 and 3.8 percentage points, and reduced the proportion of untouched meals by 3.5 percentage points, but it also increased the number of cancelled elective operations by 2.6%. Unconditional quantile regression results indicate that hospitals with low efficiency, as measured by few
    Keywords: competition, efficiency, choice, hospital, difference-in-difference
    JEL: C21 H51 I11 I18 L1
    Date: 2017–11
    URL: http://d.repec.org/n?u=RePEc:chy:respap:149cherp&r=ind

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