|
on Industrial Organization |
| By: | Roberto Mazzoleni; Hamza Virk |
| Abstract: | We analyze how an incumbent antibiotic monopolist responds to the threat of post-entry Bertrand competition by a vertically differentiated rival. In a two-period model where current production drives future resistance, Bertrand competition leads to a winner-take-all outcome. We find that strategic deterrence is optimal regardless of bacterial cross-resistance to prospective rival drugs. In contrast with post-entry Cournot competition, anticipated price competition provides the incumbent with a stronger strategic incentive for conservation. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.05261 |
| By: | Ngoc-Minh Nguyen (Development and Policies Research Center (DEPOCEN), Suite 305 - 307, 12 Trang Thi Street, Hoan Kiem, Hanoi); Manh-Duc Doan (Development and Policies Research Center (DEPOCEN), Suite 305 - 307, 12 Trang Thi Street, Hoan Kiem, Hanoi); Tuong-Vy Phan (Development and Policies Research Center (DEPOCEN), Suite 305 - 307, 12 Trang Thi Street, Hoan Kiem, Hanoi); Huy Le Vu (Development and Policies Research Center (DEPOCEN), Suite 305 - 307, 12 Trang Thi Street, Hoan Kiem, Hanoi); Ha-My Bui (Development and Policies Research Center (DEPOCEN), Suite 305 - 307, 12 Trang Thi Street, Hoan Kiem, Hanoi); Anh Ngoc Nguyen (Development and Policies Research Center (DEPOCEN), Suite 305 - 307, 12 Trang Thi Street, Hoan Kiem, Hanoi) |
| Abstract: | This study challenges the tobacco industry’s claim that specific excise tax increases undermine public health objectives by driving consumers to a static, cheaper illicit market. Exploiting a unique dataset of 5, 366 cigarette retail price observations across Ha Noi and Ho Chi Minh City collected in February 2025, we analyze market dynamics ahead of major tax legislation. We find that the licit industry engaged in coordinated “overshifting, †raising prices by an average of 8.3%, more than double the national inflation rate, particularly in the price-sensitive economy segment. Crucially, illicit cigarette prices also rose by an average of 2, 400 VND, displaying a †shadow pricing†dynamic where sellers mirrored licit trends to maximize profits rather than maintain low-price competitiveness. These findings invalidate the industry’s †price gap†argument, confirming that the market has significant capacity to absorb the proposed 5, 000 VND specific tax and that policymakers should confidently implement robust, enforcement-backed tax reforms. |
| Keywords: | Tobacco, Excise Tax, Illicit Market, Pricing Strategies, Overshifting, Vietnam |
| JEL: | I18 L13 K42 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:dpc:wpaper:0195 |
| By: | Abdrakhmanova, Maria; Gluschenko, Konstantin |
| Abstract: | A spatially dispersed market for a tradable good is deemed integrated if there are no barriers to trade between its spatial segments (except for geographical barriers, namely distances between the segments). However, perfectly integrated markets are not a common case; real markets deviate to some extent from this ideal state. Therefore, estimating a degree of integration is more helpful then an answer of the type “all or nothing” (whether the market is integrated or not integrated). In an integrated market, price for a good is determined in the national market as a whole, not depending on demand in its spatial segments. Hence, a dependence of local price on local demand (controlling for transportation costs) indicates a deviation from perfect integration, and its “strength” can measure the degree of market integration. Based on this idea, we estimate the annual integration degrees of the US market for an aggregated good (grocery basket) over 15 years, 2001–2015. The spatial segments are cities; our sample covers 66 cities from 39 states of the US. The results suggest that the US market is not perfectly integrated; however, the integration degree of the US market is fairly stable over time. We also compare results for the US with results of a similar study for Russia. With a reservation that the empirical material is not fully comparable, we can conclude that the US market is integrated more strongly than the Russian market and that the integration degree in Russia is more volatile. |
| Keywords: | Spatial market integration Price dispersion Law of one price United States |
| JEL: | L81 R15 R19 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126643 |
| By: | Michele Bisceglia (Center for Algorithms, Data, and Market Design at Yale (CADMY)); Alessandro Bonatti (MIT Sloan School of Management); Fiona Scott Morton (Yale School of Management) |
| Abstract: | We study how privacy regulation affects menu pricing by a monopolist platform that collects and monetizes personal data. Consumers differ in privacy valuation and sophistication: naive users ignore privacy losses, while sophisticated users internalize them. The platform designs prices and data collection options to screen users. Without regulation, privacy allocations are distorted and naive users are exploited. Regulation through privacy-protecting defaults can create a market for information by inducing payments for data; hard caps on data collection protect naive users but may restrict efficient data trade. |
| Date: | 2025–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2474 |
| By: | Tomaso Duso; Martin Peitz |
| Abstract: | Trade conflicts, geopolitical tensions, digital disruption, and the climate crisis pose major challenges for the European Union (EU) and its member states. As called for in the Draghi Report, industrial policy measures can increase competitiveness, strengthen resilience, and facilitate the twin transformation. This article explores ways in which competition policy can be realigned to better accommodate industrial policy objectives. Using German competition law as a reference point, it presents options with which legislatures and competition authorities can respond to current challenges, reconcile conflicting objectives, and adapt the decision-making framework. It then considers elements of a competition-oriented industrial policy, understood as an evidence-based, targeted approach in which competition serves both as a guiding principle and as a control variable. |
| Keywords: | industrial policy, protection of competition, competition, regulation, competition policy, competitiveness, internal market |
| JEL: | L40 L50 L52 K21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2145 |
| By: | Kfir Eliaz; Ran Spiegler |
| Abstract: | A profit-maximizing monopolist curates a database for users seeking to learn a parameter. There are two user types: "Nowcasters" wish to learn the parameter's current value, while "forecasters" target its long-run value. Data storage involves a constant marginal cost. The monopolist designs a menu of contracts described by fees and data-access levels. The profit-maximizing menu offers full access to historical data, while current data is fully provided to nowcasters but may be withheld from forecasters. Compared to the social optimum, the monopolist keeps too much historical data, too little current data, and may store too much data overall. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.00897 |
| By: | Ziran Ding; Adam Hal Spencer; Zinan Wang |
| Abstract: | Amid ongoing geoeconomic tensions, industrial policy has emerged as a prominent tool for policymakers. What are the dynamic and welfare effects of these policies? How does the short-sightedness of policymakers influence their choice of instruments? What are the distributional consequences of these protectionist measures? We address these questions with a dynamic two-country general equilibrium framework that incorporates ï¬ rm heterogeneity, trade, and the offshoring of tasks. By calibrating the model to the contexts of the US and China, we explore the effects of three popular industrial policies: import tariffs, domestic production subsidies, and entry subsidies. Our findings indicate that, from an initial state free of interventions, myopic policymakers are incentivized to subsidize production, while more forward-looking ones favor imposing import tariffs. Although all of these policies initially reduce wage inequality, some result in aggregate welfare losses, either in the short run or the long run. |
| Keywords: | macroeconomic dynamics, firm heterogeneity, trade, trade-in-tasks, industrial policies, welfare, global value chains |
| JEL: | F23 F41 F51 F62 L51 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-67 |