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on Industrial Organization |
| By: | Freilich, Janet; Meurer, Michael; Schankerman, Mark (Tilburg University, School of Economics and Management); Schuett, Florian (Tilburg University, School of Economics and Management) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:tiu:tiutis:542fd552-53b8-47b0-8acf-4b1953cb824e |
| By: | Huck, Steffen; Normann, Hans-Theo; Petros, Fidel |
| Abstract: | We use a laboratory experiment to investigate whether statements from a governmental institution expressing concerns about price increases trigger such increases by facilitating tacit collusion. Such statements on market conduct are disclosed after an exogenous and unexpected upward cost shock. The two potential channels affecting tacit collusion work through (i) a reduction of strategic uncertainty and (ii) an inducement of correlated beliefs. We find that issued statements of concern become a self-fulfilling prophecy, triggering price increases, and that a reduction in strategic uncertainty drives this adverse effect. Our results suggest that institutions should refrain from publishing such statements of concern |
| Keywords: | beliefs, coordination device, strategic uncertainty, tacit collusion |
| JEL: | C91 C72 L41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wzbmbh:301157 |
| By: | Yao Lu; Gordon M. Phillips; Jia Yang |
| Abstract: | We examine the rise of cloud computing and AI in China and their impacts on industry dynamics after the shock to the cost of Internet-based computing power and services. We find that cloud computing is associated with an increase in firm entry, exit and the likelihood of M&A in industries that depend more on cloud infrastructure. Conversely, AI adoption has no impact on entry but reduces the likelihood of exit and M&A. Firm size plays a crucial role in these dynamics: cloud computing increases exit rates across all firms, while larger firms benefit from AI, experiencing reduced exit rates. Cloud computing decreases industry concentration but AI increases concentration. On the financing side, firms exposed to cloud computing increase equity and venture capital financing, while only large firms increase equity financing when exposed to AI. |
| JEL: | D25 G3 G34 L20 L23 L25 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32811 |