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on Industrial Organization |
| By: | Nocke, Volker; Rhodes, Andrew |
| Abstract: | We develop a framework to study horizontal mergers when the parties can propose remedies to an antitrust authority. Remedies are modeled as asset divestitures, which make the firm receiving the assets more efficient at the expense of the merged firm. We consider both the case where the merger affects a single market and where it affects multiple markets. Solving for the merging firms’ optimal proposal, we investigate when it involves remedies—and if so, which assets should be divested, and to whom, and how this depends on market characteristics such as the level of competitiveness. |
| Keywords: | Antitrust; horizontal mergers; structural remedies; divestitures; data |
| JEL: | L13 L40 D43 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:130888 |
| By: | Rabah Amir; Igor V. Evstigneev; Mikhail V. Zhitlukhin |
| Abstract: | The paper compares two types of industrial organization in the Cournot duopoly: (a) the classical one, where the market players maximize profits and the outcome of the game is a Cournot-Nash equilibrium; (b) a contest in which players strive to win a fixed prize/bonus employing unbeatable strategies. Passing from (a) to (b) leads to a perfect competition with zero profits of the players (Schaffer's paradox). Transition from (b) to (a) results in a substantial decline in the production output, which also seems paradoxical, as it is commonly accepted that competition increases efficiency. We examine these phenomena in two versions of the Cournot model: with a homogeneous good and with differentiated goods. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.00960 |
| By: | Chengqing Li; Junjie Zhou |
| Abstract: | We examine price regulation for monopolists in networks with demand spillovers. The Pareto frontier of the profit-surplus set is characterized using a centrality-based price family. Under typical price regulation policies, regulated outcomes are generically Pareto inefficient at fixed spillover levels but become neutral as spillovers grow, with relative profit loss and surplus changes vanishing. Welfare impacts of banning price discrimination under strong spillovers depend solely on the correlation between intrinsic values and network summary statistics. In networks with two node types (e.g., coreperiphery or complete bipartite), intrinsic value averages across node types suffice for welfare comparisons. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.17301 |
| By: | Liu, Yi; Matsumura, Toshihiro |
| Abstract: | We develop a duopoly model that incorporates fuel diversification, resulting in ex post cost asymmetry between firms. We theoretically examine how common ownership influences welfare. Our findings indicate that welfare decreases (increases) with the degree of common ownership when ex post cost heterogeneity due to fuel diversification is small (large). Furthermore, we identify a potential U-shaped relationship between the degree of common ownership and welfare, an insight not previously documented in the literature. In addition, we demonstrate that common ownership promotes fuel diversification, which may further enhance welfare. |
| Keywords: | overlapping ownership; welfare-improving production substitution; cost asymmetry; fuel choices |
| JEL: | G23 L13 Q42 |
| Date: | 2025–08–14 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125747 |
| By: | Enache, Andreea; Rhodes, Andrew |
| Abstract: | Many platforms have used a Price Parity Clause (PPC) to prevent sellers charging lower prices on other sales channels. PPCs are often considered anti-competitive and have been banned in some jurisdictions. We provide a novel rationale—centered on how PPCs affect platforms’ data acquisition—for why a complete ban on PPCs may harm buyers and sellers. |
| Keywords: | Price Parity Clauses; Platforms; Data; Product Discovery |
| JEL: | D43 D83 L13 L42 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:130889 |
| By: | Yueran Ma; Benjamin Pugsley; Haomin Qin; Kaspar Zimmermann |
| Abstract: | We present new facts about the largest American companies over the past century. In manufacturing, top firms in the 1910s, 1950s, and 2010s predominantly date back to around 1900. Even as this special generation persists, turnover among top firms has been substantial. In contrast, in retail and wholesale, we do not observe a special generation among top firms. We show in a model of firm dynamics that a special generation can arise from an industrial revolution, through the adoption of a scalable technology and learning-by-doing. Top firm turnover is matched by standard idiosyncratic productivity shocks. Time-varying market size growth rates or entry costs are not sufficient to explain the facts. Among retailers and wholesalers, learning appears absent, so a special generation would be harder to sustain. Our results highlight the potential for lasting nonstationarity among the dynamics of top firms, which can result from the long echoes of technological change. |
| JEL: | D2 E2 L1 M1 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34194 |
| By: | Dibiasi, Andreas; Erhardt, Katharina |
| Abstract: | This paper studies heterogeneous firm responses to a sudden trade-induced profitability shock - the 2015 Swiss franc appreciation. Using firm-level investment data and a novel measure of exposure, we document that this trade shock causes large and persistent investment declines among affected firms. Examining heterogeneous responses among firms with similar exposure, we find that differences in responsiveness are not explained by economic fundamentals but are strongly linked to firm age and managerial experience. Younger firms and those led by less experienced managers react substantially more strongly. We argue that these empirical patterns are consistent with a model of Bayesian learning, in which firms update their beliefs about profitability over time. The results provide important insights into the long-lasting effects of trade shocks on business dynamism, capital investment, and local employment. |
| Keywords: | Trade shocks, Firm-level investment, Exchange rate shocks |
| JEL: | F14 D22 G31 L25 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:dicedp:324872 |
| By: | Williams, Angelica; Collins, LaPorchia A.; Boline, Amy |
| Abstract: | U.S. fertilizer production and consumption—crucial for the productivity of U.S. agriculture—take place within a global fertilizer market. The fertilizer price increases of 2021–22, driven by a set of national and global market events, pushed U.S. fertilizer costs per acre for corn and wheat in 2022 to more than double their levels in 2020. This study analyzes U.S. fertilizer production, consumption, and trade from 2006 (the last full year preceding the Great Recession) to 2023. Relative to 2006, U.S. fertilizer consumption and production have declined. Over the study period, U.S. nitrogen fertilizer consumption remained higher than phosphate and potash fertilizer consumption combined. Whereas phosphate fertilizer was once the main fertilizer produced in the United States, nitrogen fertilizer now makes up the largest share of production, while potash fertilizer made up 2 percent or less of total U.S. fertilizer production throughout the period. While global production and trade in fertilizer have increased, the U.S. share of world fertilizer production, imports, and exports have each declined by 25 percent or more since 2006. |
| Keywords: | Crop Production/Industries, Demand and Price Analysis, International Relations/Trade, Production Economics, Resource/Energy Economics and Policy, Supply Chain |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:ags:uersrr:369107 |