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on Industrial Organization |
| By: | Daeyoung Jeong (Yonsei University); Jeong Yeol Kim (KDI School of Public Policy and Management) |
| Abstract: | We study cartel detection when two public authorities operate separate leniency programs within the same jurisdiction, as in Korea. We develop a simple repeated-game model to compare single-agency enforcement with dual-agency enforcement, to distinguish independent operation from cooperation, and to examine how the structure of leniency relief affects reporting incentives. When the two programs operate independently and do not recognize each other's leniency status, firms may have weaker incentives to self-report, and reporting can become concentrated in only one program. Cooperation that recognizes leniency rank across authorities restores a race to report and can make self-reporting attractive under a broader range of enforcement environments. The analysis also shows that cooperation is most reliable when early applicants receive comparable treatment across authorities: when second-in-line relief is available only in the administrative program, stronger criminal exposure can reduce the effectiveness of cooperation by raising the residual risk borne by non-first applicants. The policy implication is that effective dual-agency leniency can be achieved through a narrow form of coordination that verifies marker status and aligns the relief structure across authorities while preserving confidentiality. |
| Keywords: | Antitrust, Cartel Detection, Collusion, Dual-agency Enforcement, Leniency Program |
| JEL: | K21 K42 L41 L44 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:yon:wpaper:2026rwp-276 |
| By: | Cagin Keskin |
| Abstract: | Horizontal expansion through an expanding product portfolio lies at the core of modern endogenous growth literature. However, evidence remains limited on how diversification across industries influences a firm's trade-off between generating social surplus and maximizing private returns. To investigate this, I categorize intangible assets by their spillovers: transferable intangibles (patents, software) generate social surplus, whereas embedded intangibles (organizational capital, brand value) primarily yield private returns. I document that diversified firms reallocate investment toward embedded intangibles, while at the same time having lower markups and productivity, as well as less competitive threats. Motivated by this evidence, I extend a canonical endogenous-growth framework to endogenize firms'allocations between transferable and embedded intangibles, allowing for both horizontal and vertical expansion. A key prediction of the model is that embedded intangibles are freely mobile across a firm's production lines; therefore, this mobility generates increasing returns to scale as the firm diversifies, which also raises entry barriers for competitors and decreases the social surplus, rather than promoting long-run growth. Thus, a shift in innovative effort ultimately sacrifices economy-wide growth for firm-level market advantages, and quantitative analysis indicates that size-dependent taxes can substantially improve welfare. |
| Keywords: | Schumpeterian growth, step-by-step innovation, intangibles, firm dynamics, span of control |
| JEL: | E22 O31 O32 O33 O34 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cer:papers:wp811 |
| By: | Afonso Rodrigues |
| Abstract: | This paper develops a linear-demand framework to investigate endogenous product design. The key assumption is that the same product characteristics which drive goods utility also (at least partially) shape competitive interactions across products. I model this relationship allowing for differences in each characteristic's relevance to competition, their absolute intensity per good, and correlations to other characteristics. The framework is novel in its broad applicability to settings with any finite number of goods, firms, and attributes, allowing for both vertical and horizontal differentiation, all in an empirically testable model. Under Bertrand price competition I show that across different market structures, a pattern emerges: product differentiation along product attributes that firms control is primarily vertical, with horizontal differentiation only in latent attributes. Counter to standard intuition, simulations show that allowing for endogenous design can imply higher consumer surplus under monopoly than under competition, as monopoly's stronger incentives for attribute investment translate into higher effective quality. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.02833 |
| By: | Pietro Dall'Ara; Elia Sartori |
| Abstract: | A defining feature of digital goods is that replication and degradation are costless: once a high-quality good is produced, low-quality versions can be created and distributed at no additional cost. This paper studies quality-based screening in markets for digital goods, exploring how the insights of the canonical model of Mussa and Rosen (1978) change when production costs are nonseparable and, instead, depend only on the highest quality developed. The monopolist allocation exhibits two interdependent inefficiencies. First, a productive inefficiency arises: the monopolist underinvests in the highest quality relative to the efficiency benchmark. Second, due to a distributional inefficiency, certain buyers receive degraded versions of the produced good. Competition exacerbates productive inefficiency, but improves distributional efficiency relative to monopoly. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.13014 |
| By: | Ryotaro Todoroki (Bank of Japan); Kazuki Otaka (Bank of Japan) |
| Abstract: | This study examines the dynamics of demand functions for a wide range of consumer products in Japan over the past three decades. Using highly granular point-of-sale (POS) data and machine learning techniques, we estimate key demand function parameters, namely price elasticity and demand curvature, from which we also derive markups for each market and period. We find that while the aggregate-level median price elasticity and markups remained relatively stable over the long term, with substantial cross-product heterogeneity underlying this stability, recent years have seen a modest decrease in the absolute value of median price elasticity and a corresponding increase in markups. Furthermore, our analysis shows that demand curvature increased until the mid-2010s and subsequently declined. Importantly, our panel analysis reveals a significant relationship between the estimated demand function parameters and key factors, including labor force participation and market concentration. In particular, we identify the rise in female labor force participation as a key driver of the recent decline in both absolute price elasticity and demand curvature. These findings suggest that these shifts in socio-economic factors, such as increased labor participation, might have altered consumer behavior, leading to diminished price sensitivity. |
| Keywords: | Consumer behavior; Kinked demand curve; Markups; Machine learning |
| JEL: | C55 D12 D43 L11 L13 L16 |
| Date: | 2026–02–12 |
| URL: | https://d.repec.org/n?u=RePEc:boj:bojwps:wp26e02 |
| By: | Achraf Khallouli (University of La Manouba); Rim Mouelhi (University of La Manouba) |
| Abstract: | The objective of this study is to investigate the impact of intrinsic characteristics of startups, mainly, founders' characteristics (such as education, professional experience, and network) and business-related characteristics (such as product category and industry), on their performance. The study uses data from a portfolio of 51 startups belonging to a Tunisian Venture Capital firm to analyze the aforementioned impact. Performance is measured by revenue, raised funds, survival, and the firm's team assessment. The study deploys Multiple Linear Regression, Binary Logistic Regression, and Proportional Odds Logistic Regression to analyze the data. The findings contribute to the development of a framework for evidence-based investment decisions within the Venture Capital industry. The results highlight the importance of factors such as the quality of the university attended by founders, the repeat entrepreneur status, and the founder’s being full-time on the startup in predicting performance. |
| Date: | 2025–12–10 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1812 |