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on Industrial Organization |
| By: | Germán Coloma |
| Abstract: | This paper develops a method for market definition using demand-and-supply estimations. That method is then applied to the Argentine dishwashing detergent industry, using data from the years 2022-2024. The results are compared to the ones obtained using only demand estimations, and the conclusion is that the use of supply price equations generates a considerable improvement in those results. Through our empirical estimations, we also find that the dishwashing detergent industry in Argentina seems to be divided in two relevant markets: one that includes the two main detergent brands, and another one that encompasses the remaining brands. |
| Keywords: | supply-and-demand estimation, market definition, Argentina, detergent. |
| JEL: | C3 L4 L6 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:cem:doctra:913 |
| By: | Armstrong, Mark; Vickers, John |
| Abstract: | We study a market in which firms each might supply a number of variants, or "brands", of fundamentally the same product. Consumers differ in the sets of brands they consider, and firms compete using (multi-dimensional) mixed pricing strategies. We show when firms apply uniform pricing across their brands, and when they use segmented pricing so that one "discount" brand is priced below another "premium" brand. We study the case of symmetric brands in particular, and discuss the impact of a firm introducing a new brand, of imposing a requirement to set uniform prices across brands, and of mergers between firms. |
| Keywords: | Price dispersion, price discrimination, multiproduct firms, mixed strategies, oligopoly, multibranding, multi-channel selling. |
| JEL: | C72 D43 D83 L13 M31 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127017 |
| By: | Julia Cagé; Nathan Gallo; Moritz Hengel; Emeric Henry; Yuchen Huang |
| Abstract: | What are the dynamic effects of fact-checking on the behavior of those who circulate misinformation and on the spread of false news? In this paper, we provide causal evidence on these questions, building on a unique partnership with the Agence France Presse (AFP), the world’s largest fact-checking organization and a partner of Facebook’s Third-Party Fact-Checking Program. Over an 18-month period (December 2021-June 2023), we collected information on the stories proposed by fact-checkers during the daily editorial meetings, some of which were ultimately fact-checked while others, despite being ex ante “similar”, were left aside. Using two complementary Difference-in-Differences approaches, one at the story level and the other at the post level (within fact-checked stories), we show that fact-checking reduces the circulation of misinformation on Facebook by approximately 8%, an effect driven entirely by stories rated as “False.” Furthermore, we provide evidence of behavioral responses: the publication of a fact-check more than doubles the deletion of posts in the fact-checked stories, and users whose posts appear in fact-checked stories become less likely to share misinformation in the future. While our results clearly confirm the effectiveness of fact-checking, we provide policy recommendations to further strengthen its impact. |
| Keywords: | fact-checking, misinformation, Facebook, Meta, crowdtangle, fake news, third-party verification, social media |
| JEL: | D8 D83 D91 L82 L86 P00 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12319 |
| By: | Traversa, Marina; Vuillemey, Guillaume |
| Abstract: | We show that adverse selection is a key determinant of banking market structure. Using data on US bank branches over 1981-2016, we study banks' decisions to expand or contract geographically. First, banks are more likely to expand in counties that are similar, in terms of industry shares, to those in which they already have branches. Second, when contracting, banks are more likely to close or sell branches in similar areas. These results suggest that banks value diversification, but that informational barriers prevent them from achieving optimal scale. These findings have implications for banking competition and the rise of fintechs. |
| Keywords: | Banks, Barriers To Entry, Branching, Acquisitions, Diversification, Adverse Selection |
| JEL: | G21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:333924 |
| By: | Huiyu Li; Chen Lian; Yueran Ma; Emily Martell |
| Abstract: | We document new facts that link firms’ markups to borrowing constraints: (1) less constrained firms within an industry have higher markups, especially in industries where assets are difficult to borrow against and firms rely more on earnings to borrow; (2) markup dispersion is also higher in industries where firms rely more on earnings to borrow. We explain these relationships using a standard Kimball demand model augmented with borrowing against assets and earnings. The key mechanism is a two-way feedback between markups and borrowing constraints. First, less constrained firms charge higher markups, as looser constraints allow them to attain larger market shares. Second, higher markups relax borrowing constraints when firms rely on earnings to borrow, as those with higher markups have higher earnings. This two-way feedback lowers TFP losses from markup dispersion, particularly when firms rely on earnings to borrow. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-75 |
| By: | Mert Demirer; Andrey Fradkin; Nadav Tadelis; Sida Peng |
| Abstract: | We document six facts about the structure and dynamics of the LLM market using API usage data from OpenRouter and Microsoft Azure. First, we show rapid growth in the number of models, creators, and inference providers, driven by open-source entrants. Second, we show price declines and persistent price heterogeneity across and within intelligence tiers, with open-source models being 90% cheaper than comparable closed-source models of the same intelligence. Third, we document market dynamism, with frequent turnover among leading models and creators. Fourth, we present evidence of horizontal and vertical differentiation, with no single model dominating across use cases, and demand for intelligence varying widely across applications. Fifth, we estimate preliminary short-run price elasticities just above one, suggesting limited scope for Jevons-Paradox effects. Finally, we show that although the share of firms that use multiple models increased over time, most firms concentrate their use on a single model, consistent with experimentation rather than persistent reliance on multiple models. |
| JEL: | L0 L10 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34608 |
| By: | Yörük, Baris (University at Albany, SUNY); Oxley, Jonathan (Georgia State University); Harrison, Teresa (Drexel University) |
| Abstract: | In this paper, we examine specifically how the presence of corporate firms is associated with nonprofit, charitable activity in US metropolitan areas. We find evidence of a positive association consistent with Card, Hallock, and Moretti (2010) and, due to a longer time horizon with additional information on nonprofit activity, are able to provide additional investigation into how firm location affects size of the nonprofit sector and other nonprofit activities such as fundraising. Our estimates suggest a lower bound on the spillovers such that the presence of an additional firm headquarters within a metropolitan statistical area (MSA) leads to a $8.2 million increase in total charitable contributions within the same MSA. Moreover, a $1 billion rise in the aggregate market value of firms within an MSA corresponds to a $0.8 million increase in local charitable donations. |
| Keywords: | nonprofit organizations, corporate headquarters, charitable giving |
| JEL: | L30 D22 H10 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18330 |
| By: | Do Yoon Kim; Roberto Fontana; Shane Greenstein |
| Abstract: | The study examines the quasi-natural experiments provided by the staggered introduction of open drivers in the supply chains for routers. It is rare to observe components become open and measure whether openness generates a statistical impact on more products and innovative products. This study collects novel data on all routers and subcomponents introduced between 2000 and 2018, characterizing each firm's position in a supply chain as either an upstream component provider or a downstream router assembler. Following prior literature, openness influences a firm's ability to negotiate with current and potential partners, which is labeled as autonomy. Evidence suggests that openness enhances supplier autonomy, increases the introduction of new products, and leads to a greater number of products located closer to the technical frontier. These estimates suggest that openness increased product introductions by enlarging the options available to component suppliers. The largest component suppliers benefited from greater sales, and no evidence indicates that openness aided entrants, small firms, or assemblers. |
| JEL: | L23 L63 O36 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34603 |
| By: | Jan Baran (Narodowy Bank Polski; University of Warsaw); Patryk Czechowski (Narodowy Bank Polski); Jakub Mućk (Narodowy Bank Polski; Warsaw School of Economics) |
| Abstract: | In this paper we examine the role of the electromobility transformation for exports of the automotive sector. To do so, we propose a novel mapping of granular codes of automotive products into three categories: (i) combustion-specific, (ii) neutral, and (iii) electric-specific. We estimate a standard gravity model of the trade flows of automotive products, comparing the three categories with each other. We demonstrate that key drivers of export of the electric-specific products are similar to the combustion-specific ones. However, exports related to electric vehicles are more technologically intensive and supported by either a domestic R&D potential or international knowledge spillovers through FDI. In particular, export-oriented production of electric-specific intermediates proves to be to a large extent R&D intensive. Our results also suggest that the ongoing structural change in the automotive industry leads rather to intra-industry reorganization than to more fundamental restructuring of existing Global Value Chains. |
| Keywords: | automotive industry, international trade, gravity model of trade, structural change, electric vehicles, electromobility, Global Value Chains |
| JEL: | F14 L16 L62 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:nbp:nbpmis:379 |