nep-ind New Economics Papers
on Industrial Organization
Issue of 2021‒11‒29
three papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Expanding Multi-Market Monopoly and Nonconcavity in the Value of Information By Stefan Behringer
  2. The Anatomy of a Hospital System Merger: The Patient Did Not Respond Well to Treatment By Martin Gaynor; Adam Sacarny; Raffaella Sadun; Chad Syverson; Shruthi Venkatesh
  3. Trade Intermediation by Producers By Erbahar, Aksel; Rebeyrol, Vincent

  1. By: Stefan Behringer
    Abstract: In this paper I investigate a Bayesian inverse problem in the specific setting of a price setting monopolist facing a randomly growing demand in multiple possibly interconnected markets. Investigating the Value of Information of a signal to the monopolist in a fully dynamic discrete model employing the Kalman-Bucy-Stratonovich filter, we find that it may be non-monotonic in the variance of the signal. In the classical static settings of the Value of Information literature this relationship may be convex or concave, but is always monotonic. The existence of the non-monotonicity depends critically on the exogenous growth rate of the system.
    Date: 2021–11
  2. By: Martin Gaynor; Adam Sacarny; Raffaella Sadun; Chad Syverson; Shruthi Venkatesh
    Abstract: There is an ongoing merger wave in the US hospital industry, but it remains an open question how hospital mergers change, or fail to change, hospital behavior, performance, and outcomes. In this research, we open the “black box” of practices within hospitals in the context of a mega-merger between two large for-profit chains. Benchmarking the effects of the merger against the acquirer’s stated aims, we show that they achieved some of their goals: they harmonized their electronic medical records and sent managers to target hospitals; after the acquisition, managerial processes were similar across hospitals in the merged chain. However, these interventions failed to drive detectable gains in profitability or patient outcomes. Our findings demonstrate the importance of hospital organizations and internal processes for merger research and policy in health care and the economy more generally.
    JEL: D22 I11 M12
    Date: 2021–11
  3. By: Erbahar, Aksel; Rebeyrol, Vincent
    Abstract: This paper shows that Turkish manufacturing exporters export goods that they have not pro-duced and thus also act as trade intermediaries. This exporting of “sourced” products is ubiquitous across firms, products, and destinations. Beyond these facts, the main contribution of the paper is to show that sourced exports are more sensitive to gravity determinants than produced exports at the aggregate level, but at the firm level, this relationship is reversed. We rationalize these findings by allowing producers to act as intermediaries in a model where profitability at the product-destination level is stochastic and correlated across markets. We provide empirical evidence for the model’s core mechanism.
    Keywords: international trade; intermediaries; carry-along trade; multi-product firms
    JEL: F12 F14 L2
    Date: 2021–11–18

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