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on Industrial Organization |
| By: | Martin Peitz; Anton Sobolev |
| Abstract: | A firm may decide to make total-surplus-reducing purchase recommendations in response to consumer heterogeneity in an experience good setting. First, we show under which conditions the firm chooses to make such biased recommendations in a monopoly setting. Second, we propose a duopoly model with differentiated products in which single-product firms compete in uniform prices and recommendation policies. We provide conditions under which both firms choose to bias their recommendations, whereas the bias would be absent if products were more differentiated or one of the two products were withdrawn from the market. |
| Keywords: | recommendation bias, recommender system, competition |
| JEL: | L12 L13 L15 D21 D42 D43 M37 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_715 |
| By: | Paolo Bertoletti |
| Abstract: | In a setting with Hotelling differentiation and (weak) network effects, when the market is already covered duopoly adoption of compatibility leads to anti-competitive effects and tends to be welfare excessive. We show that the latter result is reversed if the market is not assumed to be covered even under incompatibility (a condition which depends on the value of the intrinsic/stand-alone beneÂ…ts). |
| Keywords: | Compatibility; Network e¤ects; Hotelling differentiation |
| JEL: | D43 L15 L22 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:mib:wpaper:560 |
| By: | David P. Brown (University of Alberta); Andrew Eckert (University of Alberta); Douglas Silveira (Federal University of Juiz de Fora) |
| Abstract: | The extent of real-time information disclosure in electricity markets has been a longstanding debate. Regulators have the difficult task of striking a careful balance between transparency to improve market outcomes under uncertainty while limiting the potential for coordinated action. We consider the case of Alberta’s electricity market where, until 2017, firms observed anonymized price-quantity offers in the wholesale market in near-real-time. We empirically evaluate the role that this information played in improving firms’ abilities to forecast wholesale prices, a key argument raised by stakeholders for this information to be published. While we find that this information improved firms’ abilities to forecast wholesale prices under certain market conditions, we present evidence to suggest that the economic significance of this improvement is minimal. We point to other types of near-real-time information that could help improve expectations of future market outcomes and provide suggestions on information disclosure policies that aim to strike a balance on motivating efficient outcomes, while reducing the risk of coordination. |
| Keywords: | Machine Learning; Electricity; Price Forecasting; Competition Policy |
| JEL: | D43 L13 L50 L94 Q40 |
| Date: | 2025–10–26 |
| URL: | https://d.repec.org/n?u=RePEc:ris:albaec:021762 |
| By: | Christopher Teh (Toulouse School of Economics, France & School of Economics); Chengsi Wang (Department of Economics and Monash Digital Lab, Monash University) |
| Abstract: | This survey explores how startup acquisitions influence innovation and competition. We review two key streams of literature: post-acquisition innovation, which examines whether incumbents develop or terminate acquired projects, and pre-acquisition innovation, which investigates how the prospect of acquisition shapes startups’ and incumbents’ incentives and innovation strategies. We also assess the implications for merger policy design, highlighting recent competition authority responses and dynamic considerations. Our work provides insights into the ongoing debate on how competition policy should regulate startup acquisitions in fast-evolving and uncertain markets. |
| Keywords: | acquisition, innovation, merger policy, startup |
| JEL: | G34 L12 L41 O3 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:mos:moswps:2025-14 |
| By: | Christopher Teh (Toulouse School of Economics, 31000 Toulouse, France & School of Economics,); Chengsi Wang (Department of Economics and Monash Digital Lab, Monash University) |
| Abstract: | This article critically examines recent economic theories on the relationship between startup acquisitions and innovation. We argue that the prevalence of killer acquisitions is likely overstated, even from a purely theoretical perspective. We further show that the entry-for-buyout effect may not always hold: relaxing merger control does not necessarily lead startups to invest more or pursue more disruptive innovation. Effective merger policy must adopt a dynamic perspective, balancing short-term competitive harms against long-terminnovation benefits. The article concludes with practical policy recommendations for the design and enforcement of merger control. |
| Keywords: | acquisition, innovation, merger policy, startup |
| JEL: | G34 L12 L41 O3 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:mos:moswps:2025-15 |
| By: | Aline Blankertz; Brianna Rock; Nicholas Shaxson |
| Abstract: | This paper presents striking new data about the scale of Google's involvement in the global digital and corporate landscape, head and shoulders above the other big tech firms. While public attention and some antitrust scrutiny has focused on these firms' mergers and acquisitions (M&A) activities, Google has also been amassing an empire of more than 6, 000 companies which it has acquired, supported or invested in, across the digital economy and beyond. The power of Google over the digital markets infrastructure and dynamics is likely greater than previously documented. We also trace the antitrust failures that have led to this state of affairs. In particular, we explore the role of neoclassical economics practiced both inside the regulatory authorities and by consultants on the outside. Their unduly narrow approach has obscured harms from vertical and conglomerate concentrations of market power and erected ever higher hurdles for enforcement action, as we demonstrate using examples of the failure to intervene in the Google/DoubleClick and Google/Fitbit mergers. Our lessons from the past failures can inform the current approach towards one of the biggest ever big tech M&A deals: Google's $32 billion acquisition of the Israeli cloud cybersecurity firm Wiz. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.02931 |
| By: | Silvia Leoni; Marco Catola |
| Abstract: | The debate on environmental policy increasingly focuses on aligning private incentives with social objectives in imperfectly competitive markets. While traditional literature has centred on public-based mechanisms like taxes and subsidies, a growing strand emphasizes private-based mechanisms, particularly green consumerism, where consumer preferences can drive firms’ adoption of clean technologies. Recent game-theoretic analysis shows that consumers’ willingness-to-pay can lead to various market equilibria, from all-green to all-brown outcomes. This paper complements this analytical approach by developing an agent-based model (ABM) to study the dynamic evolution of a spatial market where firms, based on relative performance, decide whether to supply brown or green products to heterogeneous consumers. Our computational simulations confirm that all three market structures—all-brown, all-green, and mixed—can endogenously emerge depending on average green consumer preferences. Furthermore, we evaluate the effectiveness of three policy instruments: an environmental tax, a subsidy to green firms, and a subsidy to green consumers. We find that supply-side policies are more effective than demand-side subsidies. Specifically, an environmental tax ensures the fastest convergence to an all-green market, while a production subsidy is most effective at reducing the share of brown firms and consumers in mixed-market scenarios. By bridging game-theoretic insights with agent-based computational analysis, this paper provides a dynamic and policy-relevant perspective on the transition to sustainable markets. |
| Keywords: | agent-based modelling, pollution abatement, green technology, environmental policy |
| JEL: | C63 D43 H23 L13 L51 |
| Date: | 2025–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:pie:dsedps:2025/326 |
| By: | Thierry Blayac (CEE-M, Univ Montpellier, CNRS, INRAE, Institut Agro, Montpellier, France); Patrice Bougette (Université Côte d'Azur, CNRS, GREDEG, France); Jules Duberga |
| Abstract: | This paper investigates the pricing strategies used in long-distance carpooling in France. We investigate how several factors affect carpooling prices using a comprehensive dataset of BlaBlaCar trips combined with sociodemographic and intermodal competition data. The analysis identifies two distinct pricing patterns within the platform: one characterized by standardized and consistent pricing, and another marked by more flexible, market-responsive price setting. By focusing on price per minute, we examine how trip characteristics, competitive conditions, and demand heterogeneity affect these pricing behaviors. The results show that variables such as the number of stopovers, trip length, airport or cross-border connections, and the presence of alternative transport modes influence pricing, but with contrasting effects across the two patterns. The standardized approach tends to reflect cost-sharing principles and reinforces network effects, while the more flexible approach adapts dynamically to local competition and demand. |
| Keywords: | Carpooling, pricing strategy, platforms, intermodal competition, travel behavior |
| JEL: | D43 L11 L91 R41 R48 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2025-47 |