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on Industrial Organization |
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Issue of 2024‒04‒08
eight papers chosen by |
| By: | Bantle, Melissa |
| Abstract: | The paper uses a machine learning technique to build up a screen for collusive behavior. Such tools can be applied by competition authorities but also by companies to screen the behavior of their suppliers. The method is applied to the German retail gasoline market to detect anomalous behavior in the price setting of the filling stations. Therefore, the algorithm identifies anomalies in the data-generating process. The results show that various anomalies can be detected with this method. These anomalies in the price setting behavior are then discussed with respect to their implications for the competitiveness of the market. |
| Keywords: | Machine Learning, Cartel Screens, Fuel Retail Market |
| JEL: | C53 K21 L44 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:285380&r=ind |
| By: | Tomohiro Ara |
| Abstract: | What is the effect of tariffs on the input trade margins when vertically related markets are oligopolistic? To address the question, this paper develops a vertical oligopoly model in which one country specializes in producing a final good while another country specializes in producing an intermediate good by taking into account strategic interactions among firms. We find that, for constant-elasticity demand, a tariff reduction increases the number of trading firms (extensive margin) and average trade value per firm (intensive margin) in the vertically related sectors, raising the intensive margin relative to the extensive margin. To assess the empirical relevance of our theoretical results, we focus on China's WTO accession which was a large policy change to Chinese firms. We find that a tariff reduction significantcantly increases both margins in the post-WTO period, though the effect on the extensive margin is much smaller than that on the intensive margin. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:toh:tupdaa:46&r=ind |
| By: | Qiuyu Lu; Noriaki Matsushima; Shiva Shekhar |
| Abstract: | This study explores the welfare impact of personalized pricing for consumers in a duopolistic two-sided market, with consumers single-homing and developers affiliating with a platform according to their outside option. Personalized pricing, which is private in nature, cannot influence expectations regarding the network sizes, inducing the platforms to offer lower participation fees for developers. Those lower fees increase network benefits for consumers, allowing the platforms to exploit these benefits through personalized pricing. Personalized prices are higher when the network value for developers is high, benefiting competing platforms at the expense of consumers. These findings offer policy insights on personalized pricing. |
| Keywords: | personalized pricing, uniform prices, two-sided market, content developers |
| JEL: | L13 D43 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10994&r=ind |
| By: | Eric Langlais; Andreea Cosnita-Langlais; Tim Friehe |
| Abstract: | This paper shows how product liability rules influence merger incentives. Consumers’ misperception of product risk critically influences which liability rule induces the strongest merger incentives. When consumers overestimate product risk, merger incentives under negligence and strict liability are similar and weaker than under no liability. When consumers underestimate product risk, merger incentives under negligence are weaker than those under strict liability but stronger than those under no liability. |
| Keywords: | Liability; Merger; Cournot; Market Structure |
| JEL: | K13 L13 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2024-10&r=ind |
| By: | Andres, Raphaela; Rossi, Michelangelo; Tremblay, Mark |
| Abstract: | In the past decade, the Creator Economy has witnessed unprecedented growth. This dynamic ecosystem thrives on a multi-sided business model, connecting content creators, users, and advertisers. However, matching the needs of different stakeholders is a complex challenge, as evidenced by the impact of the YouTube 'Adpocalypse' in 2017, when major advertisers fled Youtube due to concerns about their ads appearing alongside objectionable content. This paper explores the response by content creators that use both Youtube and Patreon to YouTube's content moderation policies following the 'Adpocalypse'. We find that these content creators shift their efforts toward Patreon which uses a subscription fee model instead of an ad-based model; as a result, consumers subsequently increase their use of Patreon through memberships, comments, and likes. However, we also find that Youtube's content moderation, and the shift by content creators and consumers that follows, results in an increase in toxicity on Patreon. |
| Keywords: | Patreon, Platform Competition, Multi-homing, Content Creators |
| JEL: | L10 L20 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:283579&r=ind |
| By: | Tomohiro AraAuthor-Name: Jun Nagayasu |
| Abstract: | How does an increase in tariff on intermediate input affect different margins of trade and what in turn are consequences for optimal tariff? We address this question in a setting with vertical specialization where oligopolistic, downstream Home firms procure input from perfectly competitive, Foreign upstream firms. Our key focus is to understand how Home optimal tariff departs from the competitive benchmark (inverse of foreign export supply elasticity). While underproduction in oligopoly puts a downward pressure on tariff, welfare improvement arising from rationalization (in presence of entry) and possible reallocation (in presence of cost heterogeneity) can put an upward pressure on tariff. Hence, in general, optimal tariff can be higher or lower than the competitive benchmark. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:toh:tupdaa:47&r=ind |
| By: | Diakoulakis, Giorgos N. |
| Abstract: | In this article, we theoretically explore monopolistic pricing when a (representative) consumer exhibits multiple goals. |
| Keywords: | monopolistic firm, personalized pricing, goal-driven consumers |
| JEL: | D42 D90 D21 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:284924&r=ind |
| By: | William A Jackson |
| Abstract: | Economic theory often assumes that traders sell or buy within a market but do not organise it: organising remains separate from trading, in an implicit dualism. This paper argues that we never see organising-trading dualism outside a hypothetical ideal – what we see is duality, whereby organising and trading are distinct but entwined. While the voluntary exchange of property rights is regulated centrally, many details of market trade are decided locally by traders. Such semi‑decentralised organising generates other dualities, including stability-change, continuity-creativity and standardisation-differentiation. A duality perspective can encompass the apparent contradictions called forth by markets and the complexity that lets them adapt and evolve. respects priorities and maximizes self-consistent exclusion rights. |
| Keywords: | markets, organisation, dualism, duality, complexity, evolution |
| JEL: | B52 D40 L11 L14 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:24/02&r=ind |