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on Industrial Organization |
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Issue of 2024‒04‒29
six papers chosen by |
| By: | Joshua S. Gans |
| Abstract: | This paper surveys the relevant existing literature that can help researchers and policy makers understand the drivers of competition in markets that constitute the provision of artificial intelligence products. The focus is on three broad markets: training data, input data, and AI predictions. It is shown that a key factor in determining the emergence and persistence of market power will be the operation of markets for data that would allow for trading data across firm boundaries. |
| JEL: | L15 L40 O34 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32270&r=ind |
| By: | Crémer, Jacques; Biglaiser, Gary; Mantovani, Andrea |
| Abstract: | The aim of this report is to present the main facets of the development of cloud services, its economics and the related policy issues. We begin by surveying the sector, its growth and the significant increase in concentration in recent years. We then discuss the tools that economics gives us to study these phenomena before turning to a critical analysis of some of the most prominent policy reports which have been produced on the topic. We finally turn to a more detailed look at the (meagre) economic literature on the industry and of the economic theories which could be used for deeper analysis. |
| JEL: | K21 L13 L51 L86 O33 |
| Date: | 2024–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:129265&r=ind |
| By: | Polemis, Michael |
| Abstract: | The longevity of cartels has been a highly contested topic among economists and managers, with numerous researchers arguing that cartels are inherently unstable and their endurance is usually short-lived. Understanding the main factors that influence a cartel duration is essential from a managerial point of view let alone the competition policy perspective. Despite having a large body of literature, there has been no systematic evaluation of the existing driving factors to determine the current understanding and identify potential paths for future research. The present paper employs quantile regression techniques thus allowing for a more thorough and precise depiction of the data in terms of estimations compared to the traditional OLS analysis. The empirical findings support that the number of cartelists imposes an asymmetric effect, reducing (increasing) the lifespan of the collusion only in the short (long) lived cartels. Operating internationally and having a third-party facilitator both lengthen cartels, but the magnitudes of these effects decline monotonically over the range of the distribution. Relative to price-fixing, bid-rigging lengthens cartels in the bottom 20% of the distribution but has no significant effect elsewhere. Finally, the prevalence of leniency programs appears to have no significant effect on cartel duration, except at the very bottom of the distribution where the effect is small in magnitude. |
| Keywords: | Collusion; Longevity; Cartelists; Sanctions; Quantiles |
| JEL: | C31 D43 L13 L41 |
| Date: | 2024–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120534&r=ind |
| By: | Matthias Kehrig; Nicolas Vincent |
| Abstract: | We document that most dispersion in marginal revenue products of inputs occurs across plants within firms rather than between firms. This is commonly thought to reflect misallocation: dispersion is “bad.” However, we show that eliminating frictions hampering internal capital markets in a multi-plant firm model may in fact increase productivity dispersion and raise output: dispersion can be “good.” This arises as firms optimally stagger investment activity across their plants over time to avoid raising costly external finance, instead relying on reallocating internal funds. The staggering in turn generates dispersion in marginal revenue products. We use U.S. Census data on multi-plant manufacturing firms to provide empirical evidence for the model mechanism and show a quantitatively important role for good dispersion. Since there is less scope for good dispersion in emerging economies, the difference in the degree of misallocation between emerging and developed economies looks more pronounced than previously thought. |
| Keywords: | Misallocation, Productivity Dispersion, Multi-Plant Firms, Internal Capital Markets. |
| JEL: | E2 G3 L2 O4 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:24-13&r=ind |
| By: | Panteleimon Kruglov; Charles Shaw |
| Abstract: | This study explores the relationship between R&D intensity, as a measure of innovation, and financial performance among S&P 500 companies over 100 quarters from 1998 to 2023, including multiple crisis periods. It challenges the conventional wisdom that larger companies are more prone to innovate, using a comprehensive dataset across various industries. The analysis reveals diverse associations between innovation and key financial indicators such as firm size, assets, EBITDA, and tangibility. Our findings underscore the importance of innovation in enhancing firm competitiveness and market positioning, highlighting the effectiveness of countercyclical innovation policies. This research contributes to the debate on the role of R&D investments in driving firm value, offering new insights for both academic and policy discussions. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.10982&r=ind |
| By: | López, Rigoberto A.; Seoane, Luis |
| Abstract: | The meatpacking industry is a crucial intermediary between ranchers and the downstream supply chain, and concentration within the industry has significant implications for stakeholders in terms of competition and transmission of efficiencies. Due to constraints on the efficient transportation of live animals over long distances, ranchers primarily operate within regional markets. In this paper we provide new knowledge about the degree of regional concentration in the beef packing industry and propose a model to examine its impact on the wholesale farm-price spread. Findings indicate a significant increase in concentration across all regions, with some regions experiencing up to a 300 percent rise in the Herfindahl index, although concentration levels vary considerably among the different regions. |
| Keywords: | Livestock Production/Industries |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:341195&r=ind |