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on Industrial Organization |
| By: | She, Huixin |
| Abstract: | Digital platforms display sellers' prices and collect ad valorem commissions. We study how these roles shape sellers' disclosure choices and a platform's incentives to regulate them. Sellers offer a base good and an avoidable add-on, which some consumers overlook when choosing sellers. Because commissions apply to the base good but not off-platform add-ons, add-on profit is passed through more than one-for-one into lower base-good prices, creating a competition multiplier. Hidden add-on prices can reduce efficiency while raising consumer surplus through this mechanism. A platform regulates disclosure to protect commission revenue, while mandatory transparency can improve efficiency but reduce consumer surplus. |
| Keywords: | Platform governance; add-on pricing; consumer myopia; market transparency;; ad-valorem commissions; shrouding, information disclosure |
| JEL: | D11 D21 D82 L12 L15 L81 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:132263 |
| By: | Paolo Bertoletti |
| Abstract: | Alternative market allocations are compared in a linear setting with product differentiation. With two commodities, assuming that both Ramsey and Cournot quantities are positive, the Cournotian quantities are shown to be not larger than their Bertrand counterparts, regardless of product substitutability. It also turns out that the case of a Bertrand price exceeding its Cournotian counterpart (which requires product complementarity) and the existence of a "subordinate" commodity receiving a negative price-cost margin à la Ramsey are equivalent conditions. |
| Keywords: | Bertrand vs Cournot; Ramsey pricing; subordinate commodity; product differentiation |
| JEL: | D11 D43 L13 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:mib:wpaper:582 |
| By: | Rey, Patrick; Iossa, Elisabetta |
| Abstract: | We study how the precision of merger review a¤ects rmsincentives to generate merger-specific efficiencies. Before the review, merging parties can invest in a project combining complementary assets; the project can be implemented only if the merger is approved. The merger control authority observes a noisy signal about these efficiencies and approves if the evidence satises a consumer-surplus standard. In a binary-investment benchmark with exogenous signal threshold, greater signal precision fosters investment incentives. The same holds locally with continuous investment and holds as well with Bayesian approval. Better information can therefore strengthen, rather than weaken, incentives to generate merger efficiencies. |
| Keywords: | merger control; investment; innovation; e¢ ciencies; information; antitrust |
| JEL: | L13 L41 O31 D82 |
| Date: | 2026–10–10 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:132272 |
| By: | Luca Macedoni; John Morrow; Vladimir Tyazhelnikov |
| Abstract: | Which firms supply which products? Modeling multi-product firms under heterogeneous markups, we recover firms' costs for produced products and develop an algorithm inspired by recommender systems to predict costs for unproduced products. Lower predicted costs imply increased product adoption and identify which firms enter when export demand rises, including firms crossing broad product classifications. We use these counterfactual costs to quantify how reductions in fixed and marginal costs induce product entry and lower price indices. In a price-stabilization exercise following a cost shock, entry subsidies can cost less than subsidies to incumbents, particularly for smaller shocks when capable potential entrants remain available. |
| Keywords: | multi-product firms, firm capabilities, classification, industrial policy |
| JEL: | F1 F6 D2 L1 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13044 |
| By: | Khachatryan, Rubik; Lukyanov, Georgy |
| Abstract: | This paper studies how learning about an incumbent affects the scope of entry when competitive responses use resources shared across markets. An entrant chooses whether to launch in neither, one, or both of two markets. Entry into the second market reduces the incumbent’s cost-reducing response in the first and can make one-market entry unattractive. The entrant learns about the incumbent’s capability from a record of its response to an earlier rival. More frequent publication encourages a less capable incumbent to imitate a more capable one. An observed response then becomes less informative, and entry after that record expands. We compare publication of conduct with a public audit of capability. For an open set of parameters with uniform setup costs, full publication maximizes total surplus within the specified policy class when publication costs are low. Removing the interaction between response costs across markets reverses this choice, while preserving all early and singleton-market payoffs. A capability audit is dominated in both economies. Expected entry scope is constant across the considered policies within each technology, although productive investment and the allocation of entry change. |
| Keywords: | reputation; entry scope; information disclosure; competitive response; multimarket competition |
| JEL: | D82 L13 L15 |
| Date: | 2026–10–16 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:132292 |
| By: | Mitsuru Katagiri (Waseda University and TDB-CAREE. (E-mail: mitsuru.katagiri@waseda.jp)); Naoki Wakamori (Keio University and TDB-CAREE. (E-mail: nwakamo@keio.jp)) |
| Abstract: | This paper examines how geographic distance between bank branches and firms affects firms' borrowing costs. Building on descriptive evidence that highlights the role of nearby competing banks in determining loan rates, we develop a model where firms choose their lenders and banks compete in loan rates, and we structurally estimate the model using matched firm- and bank-branch-level microdata from Japan. The estimates suggest that distance affects loan rates by increasing both banks' and borrowers' costs. Counterfactual simulations indicate that the impact of branch closures on small businesses' borrowing costs depends on local banking market conditions. |
| Keywords: | Banking, Loan pricing, Spatial price discrimination |
| JEL: | G21 L13 L14 D43 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:ime:imedps:26-e-11 |
| By: | Durrmeyer, Isis; Fournel, Jean-François; Samano, Mario |
| Abstract: | Grocery loyalty programs record purchase histories that retailers do not use to personalize prices. We measure how much they forgo with a structural model of demand and pricing in which a Bayesian seller learns preferences from past purchases and personalizes prices. Profits rise by 7.1% with one-year histories, capturing two thirds of the gains under perfect knowledge of preferences. Most consumers (84.1%) gain, but the losses of the minority outweigh these gains, and aggregate consumer surplus falls. An optimal loyalty program charges a membership fee, yet most consumers enroll, because opting out signals price insensitivity. |
| Keywords: | personalized pricing; behavior-based price discrimination; purchase histories;; Bayesian learning; loyalty programs; value of information |
| JEL: | D42 D83 L11 L81 D12 |
| Date: | 2026–10–12 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:132271 |
| By: | Hexiao Liu; Lijian Lu; Mingzheng Wang |
| Abstract: | Digital marketplaces increasingly earn revenue from transaction commissions and seller-facing data services. Sellers may purchase data to increase revenue or avoid competing with an informed rival. We examine how consumer disclosure rights shape these motives and the platform's incentive to provide data. We develop a game-theoretic model of a commissioned platform, two differentiated sellers, and privacy-sensitive consumers. Data generates value through bilateral sales-revenue gains and competition threats arising from asymmetric access. Under mandatory collection, the platform can monetize defensive adoption, even when bilateral personalization reduces seller revenue. Under voluntary disclosure, anonymous purchasing and strictly positive privacy costs make unilateral disclosure unattractive in the baseline. Exclusive access thus yields no usable information, restores sellers' no-data rejection payoffs, and eliminates defensive fees. Profitable provision therefore requires nonnegative bilateral revenue gains. Under full fee extraction, sellers retain their no-data net profits. This revenue alignment does not guarantee welfare gains: additional transactions may benefit consumers, whereas segmentation in an already covered market can raise anonymous prices and reduce welfare. Capping anonymous offers at their no-data benchmark protects individual consumers and limits positive-mass provision to the transaction-creation region. Extensions consider access choice, heterogeneous privacy costs, imperfect identification, and limited contractual credibility. Platforms should evaluate data services based on both bilateral-use and seller-rejection outcomes, and sellers should distinguish revenue-enhancing from defensive investments. Regulators should distinguish equal-access rules from effective consumer control and monitor pricing in anonymous channels. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.22864 |
| By: | Martin Bichler; Philip Hierhager; Kassian K\"ock; Fabian Pieroth |
| Abstract: | Repeated Bertrand competition is a stringent benchmark for algorithmic pricing: in homogeneous-goods markets, standard learning procedures typically select the stage-game Nash outcome with prices near marginal cost. We show that LLM pricing agents can escape this benchmark, depending on deployment decisions. LLMs outperform standard online learners through faster adaptation, but this advantage largely disappears against full-information learners. An extracted surrogate algorithm illustrates how LLMs in specific deployments profit from regularly undercutting slower learners. Agents that post one price every period from raw market histories that include rival prices can sustain supracompetitive regimes in self-play. Agents that periodically emit probability distributions from summarized histories of their own profits instead move toward the competitive region in self-play. Markets mixing these interfaces can generate dynamic regimes in which LLMs establish a high-price anchor and regularly undercut it to capture demand. These regimes can keep both competitors' prices above marginal cost. Deployment choices shape these outcomes, shifting the focus from stationary equilibria to dynamic pricing regimes. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.21711 |
| By: | Canta, Chiara; D’Annunzio, Anna; Lefouili, Yassine |
| Abstract: | We study the impact of privacy regulation on data-driven innovation and welfare in the healthcare sector. A platform providing medical services (e.g., a hospital) collects patient data and may sell non-rival access to downstream innovators. Without data externalities, consent can induce inefficiently low data sharing because the platform cannot identify privacy-concerned patients and captures only part of the social value of innovation. Consequently, requiring consent can reduce welfare for intermediate privacy costs. When one patient’s disclosure reveals information about others, consent decisions become strategic complements. These externalities reduce the compensation required for disclosure and can instead produce excessive sharing, potentially justifying additional restrictions on compensation or data sharing. If the platform controls innovator access, consent can induce excessive restrictions without data externalities, whereas sufficiently strong externalities can lead the platform to admit too many innovators. |
| Keywords: | Data sharing; privacy; consent policy; innovation; healthcare. |
| JEL: | D83 L15 L51 |
| Date: | 2026–10–14 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:132282 |
| By: | Takanori ADACHI |
| Abstract: | We examine per-unit cost pass-through in a two-type screening model of monopolistic nonlinear pricing. We show that per-unit pass-through for the small package is necessarily positive when the low type’s participation constraint binds. Under isoelastic preferences, pass-through is higher for the small package than for the large package. This ranking, however, is not a general implication of screening. We derive a local curvature condition governing the pass-through gap and show that shifted-isoelastic preferences can reverse the ranking. A numerical illustration demonstrates that such reversals can also occur away from the local limit. Thus, screening restricts the sign of per-unit pass-through at the bottom of the menu, but not its ranking across contracts. |
| Keywords: | Pass-through; Nonlinear pricing; Screening. |
| JEL: | D42 D82 H22 L11 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:kue:epaper:e-26-004 |