nep-ind New Economics Papers
on Industrial Organization
Issue of 2022‒08‒29
four papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. A Cointegration-based cartel screen for detecting collusion By Kurdoglu, Berkay; Yucel, Eray
  2. Pricing Power in Advertising Markets: Theory and Evidence By Matthew Gentzkow; Jesse M. Shapiro; Frank Yang; Ali Yurukoglu
  3. Flexibility and risk transfer in electricity markets By Crampes, Claude; Renault, Jérôme
  4. Price Pass-Through and Event Impacts in the U.S. Beef Industry By McKendree, Melissa G. S.; Tonsor, Glynn T.; Dong, Zekuan

  1. By: Kurdoglu, Berkay; Yucel, Eray
    Abstract: In this article, we propose a new empirical screen for detecting cartels, using the cointegration as our basis of modeling. The proposed screen is capable of identifying potential cartel behavior, indicating the strength of price adjustment among firms, and providing a basis for assessing structural change. The screen is applied to the Turkish cement market for an initial demonstration of use; we obtain promising results.
    Keywords: Antitrust; Cartel; Detection; Empirical screen
    JEL: D43 L41
    Date: 2022–07–26
  2. By: Matthew Gentzkow; Jesse M. Shapiro; Frank Yang; Ali Yurukoglu
    Abstract: Existing theories of media competition imply that advertisers will pay a lower price in equilibrium to reach consumers who multi-home across competing outlets. We generalize and extend this theoretical result and test it using data from television and social media advertising. We find that television outlets whose viewers watch more television charge a lower price per impression to advertisers. This finding helps rationalize well-known stylized facts such as a premium for younger and more male audiences on television. Also consistent with the theory, we show that social media advertising markets feature a premium for older audiences. A quantitative version of our model whose only free parameter is a scale normalization can explain 35 percent of the variation in price per impression across owners of television networks, and aligns with recent trends in television advertising revenue. We use the model to quantify the impact of mergers, the effect of competition on incentives to produce content, and the effect of Netflix ad carriage on prices for linear television advertising.
    JEL: L10 L82 M37
    Date: 2022–07
  3. By: Crampes, Claude; Renault, Jérôme
    Abstract: The producers of electricity using dispatchable plants rely on partially flexible technologies to match the variability of both demand and production from renewables. We analyse upward and downward flexibility in a two-stage decision process where firms compete in quantities produced ex ante at low cost and ex post at high cost to supply a random residual demand. We first compute the first best and competitive outcomes, then we determine the subgame perfect equilibria corresponding to two market designs: one where all trade occurs in a spot market with known demand, the other where a day-ahead market with random demand is added to the ex-post market, first in a general setting, then using a quadratic specification. We show that being inflexible can be more profitable than being flexible. We also show that adding a day-ahead market to the spot market increases welfare but transfers risks from firms to consumers.
    Keywords: flexibility; electricity; market design; risk transfer
    JEL: C72 D24 D47 L23 L94
    Date: 2022–07–28
  4. By: McKendree, Melissa G. S.; Tonsor, Glynn T.; Dong, Zekuan
    Keywords: Marketing, Production Economics, Agricultural Finance
    Date: 2022–08

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