nep-ind New Economics Papers
on Industrial Organization
Issue of 2023‒11‒06
three papers chosen by
Kwang Soo Cheong, Johns Hopkins University

  1. In the light of dynamic competition: Should we make merger remedies more flexible? By Bougette, Patrice; Budzinski, Oliver; Marty, Frédéric
  2. Improving Performance Through Allocation and Competition: Evidence from a Patient Choice Reform By Kortelainen, Mika; Laine, Liisa T.; Lavaste, Konsta; Saxell, Tanja; Siciliani, Luigi
  3. Complementarity Effect of Corporate Advertising in a Multimedia World: A Comparison of Online Advertising and Mass Media Advertising By Fujisawa, Chieko; Kasuga, Norihiro

  1. By: Bougette, Patrice; Budzinski, Oliver; Marty, Frédéric
    Abstract: Mergers and acquisitions shape industry competition. Effective merger remedies are important for market efficiency and consumer welfare. This paper explores the need for more flexible remedies to address changing markets after mergers. While the EU permits some flexibility with less restrictive remedies, we conceptually advance the design elements of a dual-phase, bifurcated merger control system. This system integrates ex-ante processes with more systematic and comprehensive ex-post measures. Such an approach can address the shortcomings of the current system and, consequently, holds the potential to enhance merger control in dynamic markets.
    Keywords: merger remedies, competition authorities, market dynamics, dynamic competition, oligopolies, innovation effects, European Union
    JEL: L41 K21 L13
    Date: 2023
  2. By: Kortelainen, Mika; Laine, Liisa T.; Lavaste, Konsta; Saxell, Tanja; Siciliani, Luigi
    Abstract: We study the allocative effects of enhancing consumer choice and non-price competition in markets with heterogeneous producers. We use comprehensive administrative data and a difference-in-differences design based on the introduction of a regional patient choice reform for planned surgeries in Finland. We find that large teaching hospitals attracted more patients and concentration increased in their markets. Waiting times decreased in hospitals exposed to the reform and more patients were treated, with little effect on clinical quality or average surgical expenditure after the reform. Our results suggest that increased choice can reallocate patients towards large producers and improve public hospital performance.
    Keywords: Reallocation, Heterogeneous Producers, Performance, Competition, Concentration, Patient Choice, Market Structure, Local public finance and provision of public services, I11, L11, I18, L32, L38, fi=Elinkeinopolitiikka|sv=Näringspolitik|en=Industrial and economic policy|, fi=Kunnat ja hyvinvointialueet|sv=Kommuner och välfärdsområden|en=Municipalities and wellbeing services counties|, fi=Terveyspalvelut|sv=Hälsovårdstjänster|en=Healthcare services|,
    Date: 2023
  3. By: Fujisawa, Chieko; Kasuga, Norihiro
    Abstract: This study analyzes the type of advertisements firms pursue when they engage in Cournot competition, especially when goods are complementary in a multimedia environment. Advertisements are classified into search-linked advertisements for online advertisements and TV commercials for mass media advertisements. Which one should the firm choose? This study also analyzes how corporate advertising strategies affect social welfare and provides insight into the role of advertising in multimedia. A firm's advertisement selection depends on the degree of complementarity and differentiation between advertisements. This analysis also focuses on the advertising strategies of duopoly firms in an extended model, such as hardware firms that are complementary to software products. In that case, both choose mass media advertising when the differentiation is moderate, and this choice raises both aggregate surplus and producer surplus. When advertising complementarity is high for both mass media and online advertising, firms choose different types of advertisements, but social welfare is low. This result is one of the considerations of a firm's sales strategy, how on using advertisements to increase demand and maximize profits.
    Keywords: Online media advertising, Mass media advertising, Complementary relationship, Advertising Strategy, Duopoly model
    Date: 2023

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