nep-ind New Economics Papers
on Industrial Organization
Issue of 2018‒02‒05
four papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Endogenous timing with a socially responsible firm By Garcia, Arturo; Leal, Mariel; Lee, Sang-Ho
  2. The Amazon Monopoly: Is Amazon’s Private Label Business the Tipping Point? By Faherty, Emily; Huang, Kevin; Land, Robert
  3. Real-Estate Agent Commission Structure and Sales Performance By Gautier, Pieter A.; Siegmann, Arjen; van Vuuren, Aico
  4. Price Discrimination in the Italian Medical Device Industry: An Empirical Analysis By Alberto Cavaliere; Giovanni Crea; Angelo Cozzi

  1. By: Garcia, Arturo; Leal, Mariel; Lee, Sang-Ho
    Abstract: This study considers a mixed duopoly in which a socially responsible firm competes with a private firm by incorporating environmental externality and clean technology. We analyze the endogenous market structure in which both firms strategically decides quantities sequentially or simultaneously, which also affects abatement activities. We show that depending on the relative concerns on environment and consumers surplus, the socially responsible firm can be less or more aggressive in the production and abatement. Thus, not only the signifiicance of externality but also the instrumental conflict of social concerns are crucial factors in determining the equilibrium of endogenous timing game, in which the socially responsible firm might earn higher profits.
    Keywords: endogenous timing; socially responsible firm; mixed duopoly; clean technology; environmental externality
    JEL: L13 L31 Q5
    Date: 2018–01–18
  2. By: Faherty, Emily; Huang, Kevin; Land, Robert
    Abstract: The purpose of this paper is to consider if Amazon’s increase in private label brands is the tipping point for transforming the e-commerce giant into a monopoly. To lay the foundation, we initially explore the culture, leadership, and business practices which are unique to Amazon that enabled the company to become one of the U.S.’s largest and fastest growing e-commerce websites. Introduced in 2009, Amazon’s private label business has further propelled Amazon’s growth while creating a competitive advantage for the company by offering high quality products to their customers at low cost options. In considering whether private label brands affect Amazon’s status as a monopoly, we first examine exactly what a monopoly is and if Amazon can be classified as one in its current state. We then take a deep dive into Amazon’s private label strategy, analyzing past performance to make educated assumptions about the future. Our research provided evidence indicating that Amazon’s actions are threatening the cooperative nature of its Marketplace by creating substantial barriers to entry and increasing Amazon’s market share. With this knowledge we make predictions about Amazon’s future and whether it will ever be seen as a monopoly under the economic, legal, and/or social definitions. While Amazon’s case is unprecedented, this paper sources leading economists, journalists, and other academic research to support our theory.
    Keywords: amazon, monopoly, amazon marketplace, private label, store brand, jeff bezos, white label, consumer protection, sherman act, anti-trust, clayton act, hart-scott-rodino, federal trade commission
    JEL: D4 D40 D42 D43 D44 D5 K21 K23 Q55
    Date: 2017–12–03
  3. By: Gautier, Pieter A.; Siegmann, Arjen; van Vuuren, Aico
    Abstract: Do higher real-estate agent fees imply better performance? This study uses a nation-wide data set of residential real-estate transactions in the Netherlands from 1985 to 2011 to provide evidence against this. Brokers with a flat fee structure who charge an up-front fee (which is substantially lower than the average fee of traditional brokers) and leave the viewings to the seller sell faster and at -on average- 2.7 percent higher prices. We correct for fixed house- and time effects. We provide additional evidence that sellers who chose for a flat fee broker were the ones who benefitted most from them.
    Keywords: agency; broker incentives; Housing; real-estate brokers
    JEL: D80 L10 L80 R20 R30
    Date: 2018–01
  4. By: Alberto Cavaliere (Department of Economics and Management, University of Pavia); Giovanni Crea (Department of Economics and Management, University of Pavia); Angelo Cozzi (Department of Economics and Management, University of Pavia)
    Abstract: In this paper we carry out an empirical analysis to show that the significant price dispersion in the Italian market for medical devices may also be due to price discrimination strategies. We find that ASL (Aziende Sanitarie Locali) incur higher costs than AO (Aziende Ospedaliere) that purchase larger quantities. Centralized purchasing agencies pay lower prices than single purchasers. Therefore second-degree price discrimination seems to be one cause of price differences. Product age has a negative effect on prices due to the impact of innovation on suppliers’ costs. Concerning geographical price discrimination, public procurers located in the south pay significantly higher prices than those located in Northern or Central Italy. However we show that this result may be due to the higher probability that southern public procurers purchase from independent retailers rather than from producers of medical devices, implying a potential double marginalization effect due to the market power of retailers at a local level.
    Keywords: Price Dispersion, Bayesian Networks, Double Marginalization.
    JEL: I11 H51 L11
    Date: 2018–01

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