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on Industrial Organization |
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Issue of 2018‒01‒29
seven papers chosen by |
| By: | Andreea Cosnita-Langlais; Bjørn Olav Johansen; Lars Sorgard |
| Abstract: | In two-sided markets it is important to consider feedback effects following a merger, i.e. how a price change on one side of the market affects the price change on the other side of the market. Affeldt et al. (2013) introduced the Upward Pricing Pressure (UPP) for two-sided markets, and we extend their approach to take into account such feedback effects. We then discuss the implications of our results for the assessment of two-sided mergers. |
| Keywords: | merger assessment, two-sided markets, Upward Pricing Pressure |
| JEL: | L13 L40 L82 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2018-3&r=ind |
| By: | Gutiérrez-Hita, Carlos; Vicente-Pérez, José |
| Abstract: | In this paper we present a mixed duopoly model of supply function competition under uncertainty with product differentiation. We find that, regardless the nature of product heterogeneity, the best response of the private firm always arises as strategic complement. Contrary to this, state-owned firm's best response arises either as strategic complement or substitute depending on the product heterogeneity. As a result of the ex post realization of the demand uncertainty, different equilibria are reached. |
| Keywords: | Supply Function Equilibria; Mixed oligopoly; Differentiated products. |
| JEL: | D43 H42 L13 |
| Date: | 2018–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83792&r=ind |
| By: | Suzuki, Keishun |
| Abstract: | How does patent policy affect innovation when patent licensing is crucial for firms? To address this question, the present paper incorporates voluntary patent licensing between an innovator and followers, which has been discussed in the literature of industrial organization, into a dynamic general equilibrium model. Unlike in existing studies, both the licensing fee and the number of licensees are endogenously determined by the innovator’s maximization and the free-entry condition. Using this model, we show that strong patent protection does not enhance innovation, economic growth, and welfare. Furthermore, the extended analysis provides a policy implication that the effect of patent policy depends on how difficult further innovation is without patent licensing of the current leading technology. |
| Keywords: | innovation, patent protection, optimal patent licensing, endogenous market structure. |
| JEL: | L24 O31 O34 |
| Date: | 2017–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82712&r=ind |
| By: | Bourreau, Marc; Jullien, Bruno |
| Abstract: | In this paper, we study the impact of a merger to monopoly on prices and investments. Two single-product firms compete in prices and coverage for a new technology. In equilibrium, one firm covers a larger territory than its competitor with the new technology, leading to singleproduct and multi-product zones, and sets a higher uniform price. If the firms merge, the merged entity can set different prices and coverage for the two products. We find that the merger raises prices and total coverage, but reduces the coverage of the multi-product zone. We also show that the merger can increase total welfare and consumer welfare. |
| Keywords: | horizontal mergers; investments; competition |
| JEL: | D43 L13 L40 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:32350&r=ind |
| By: | Rickert, Dennis; Schain, Jan Philip; Stiebale, Joel |
| Abstract: | This paper analyzes the effects of a merger between a German supermarket chain and a soft discounter on consumer prices. We exploit geographic variation in prices within retail chains and brands and use a difference-in-differences estimator to compare regional markets with a change in market structure to a control group in unaffected markets. Our results indicate that both insiders and outsiders raised average prices after the merger, particularly in regions with high expected change in retail concentration. In contrast, we estimate price declines in regions that did not experience a rise in concentration but were potentially affected by cost savings within the merged entity. We also provide evidence that remedies imposed by competition authorities were not sufficient to o set anti-competitive effects. |
| Keywords: | Mergers and Acquisitions,Ex-post Merger Evaluation,Retail Markets,RetailPrices,Competition |
| JEL: | D22 L11 L81 L66 K21 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:280&r=ind |
| By: | Michael Fritsch (FSU Jena); Michael Wyrwich (FSU Jena) |
| Abstract: | We investigate the role of entrepreneurship culture and the historical knowledge base of a region on current levels of new business formation in innovative industries. The analysis is for German regions and covers the time period 1907-2014. We find a pronounced positive relationship between high levels of historical self-employment in science-based industries and new business formation in innovative industries today. This long-term legacy effect of entrepreneurial tradition indicates the prevalence of a regional culture of entrepreneurship. Moreover, local presence and geographic proximity to a technical university founded before the year 1900 is positively related to the level of innovative start-ups more than a century later. The results show that a considerable part of the knowledge that constitutes an important source of entrepreneurial opportunities is deeply rooted in history. We draw conclusions for policy and for further research. |
| Keywords: | Innovative start-ups, universities, regional knowledge, regional cultures of entrepreneurship |
| JEL: | L26 L60 L80 O18 R12 R30 |
| Date: | 2018–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2018-001&r=ind |
| By: | Emek Basker; Timothy Simcoe |
| Abstract: | This paper matches archival data from the Uniform Code Council to establishments in the Longitudinal Business Database and Economic Census to study the diffusion and impacts of the Universal Product Code (UPC). We find evidence of network effects in the diffusion process. Matched-sample difference-in-difference estimates show that employment and trademark registrations increase following UPC adoption by manufacturers or wholesalers. Industry-level imports also increase with domestic UPC adoption. Our findings suggest that barcodes, scanning and related technologies helped stimulate variety-enhancing product innovation and encourage the growth of international retail supply chains. |
| JEL: | L11 L15 L81 O33 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24040&r=ind |