nep-ind New Economics Papers
on Industrial Organization
Issue of 2022‒07‒11
four papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Pareto-Improving Data-Sharing By Ronen Gradwohl; Moshe Tennenholtz
  2. The Institutional environment as a factor of the protection and the development of economic competition By Fedorov Sergei
  3. Mergers, Foreign Entry, and Jobs: Evidence from the U.S. Appliance Industry By Montag, Felix
  4. How brands mobilize status, reputation, and legitimacy cues to signal their social standing: The case of luxury watchmaking By Déborah Philippe; Alain Debenedetti; Damien Chaney

  1. By: Ronen Gradwohl; Moshe Tennenholtz
    Abstract: We study the effects of data sharing between firms on prices, profits, and consumer welfare. Although indiscriminate sharing of consumer data decreases firm profits due to the subsequent increase in competition, selective sharing can be beneficial. We show that there are data-sharing mechanisms that are strictly Pareto-improving, simultaneously increasing firm profits and consumer welfare. Within the class of Pareto-improving mechanisms, we identify one that maximizes firm profits and one that maximizes consumer welfare.
    Date: 2022–05
  2. By: Fedorov Sergei (Department of Economics, Lomonosov Moscow State University)
    Abstract: The protection and the development of economic competition always take place in the context of the institutional environment. In particular, the influence of this context manifests itself in the form of differences in approaches to industrial regulation, in variations of the administrative barriers to economic activity, and in distortions of antitrust practicies after their cross-country transplantation. This article analyzes the impact exerted by institutional environment on the economic competition by combining two approaches within the framework of the New institutional economics («social orders» by D. North et al. and O. Williamson's «mechanisms of governance»). The analysis allows us to conclude that the opportunism of politicians, along with the opportunism of market players, can cause restrictions on economic competition.
    Keywords: protection and development of competition, institutional environment, mechanisms of governance
    JEL: L50 L51 L40
    Date: 2022–05
  3. By: Montag, Felix
    Abstract: Proponents of industrial policy argue that merger control should consider domestic employment. I propose a model to assess how a product market merger affects rival product entry, consumer welfare, and domestic employment. Firms endogenously decide which products to offer. Domestic jobs depend on production locations and equilibrium quantities in the product market. I estimate the structural parameters of this model for the U.S. home appliance industry. Using the structural model, I examine the impact of Whirlpool’s acquisition of Maytag and compare it to the impact of a counterfactual acquisition by a foreign buyer with no prior presence in the U.S. market. Four key findings emerge from the comparison of these two acquisitions: First, rival product entry is mostly independent of the acquirer. Second, a Whirlpool acquisition leads to the removal of more merging party products. Third, it always leads to lower consumer welfare. Fourth, a Whirlpool acquisition leads to a smaller decrease in U.S. employment. I use these results to estimate the job value necessary for domestic employment effects to offset consumer welfare losses.
    Keywords: merger, jobs, Appliance Industry
    Date: 2022–06
  4. By: Déborah Philippe; Alain Debenedetti (IRG - Institut de Recherche en Gestion - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée); Damien Chaney
    Abstract: While social evaluations have gained prominence in the field of marketing, few studies have investigated how brands strategically mobilize their social evaluations. This study aims to further explore the potential of social evaluations to shed light on brand management processes. Through a qualitative content analysis of 420 unique magazine ads of 36 fine watchmaking brands over a four-year period, we show how brands strategically draw from the distinct repertoires of status, reputation, and legitimacy to signal their social position and increase their appeal to consumers. We find that brands mobilize and combine cues from the three repertoires in different ways and that these variations stem from differences in the brands' strategic intent and extent of market embeddedness. We discuss the contributions of these findings to the marketing literatures on social evaluations and on the role of advertising in brand building and conclude by outlining avenues for future research.
    Keywords: Legitimacy,status,reputation,branding,market system dynamics,social evaluations,luxury
    Date: 2022

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