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on Industrial Organization |
| By: | Ohnishi, Kazuhiro |
| Abstract: | This study investigates a quantity-setting duopoly model in which two partially cooperating firms coexist. The following three-stage game is considered. In the first stage, each owner decides whether to hire a manager. In the second stage, the owners who hired managers select incentive parameters for them. In the third stage, the managers or, in their absence, the owners simultaneously and independently choose the firms’ outputs. The study adopts subgame perfection as an equilibrium concept and solves the game by backward induction. The study demonstrates that, in the subgame-perfect equilibrium, both firms hire managers. |
| Keywords: | Managerial delegation; Mixed duopoly; Cournot model; Partially cooperating firm |
| JEL: | C72 D21 D43 L13 |
| Date: | 2026–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128718 |
| By: | Cassandra Merrit (Keough School of Global Affairs, University of Notre Dame); Jacob Dominski (Institute for Ethics and the Common Good, University of Notre Dame); Christopher Hoy (Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | Artificial intelligence (AI) is frequently cast as a transformative technology that will raise productivity while displacing human work, yet organizational adoption remains uneven and aggregate effects are mixed. We examine whether middle managers contribute to this gap by acting as gatekeepers to AI adoption. In a pre-registered survey experiment of 2, 000 managers in the United States and United Kingdom, respondents were randomly assigned to view videos summarizing recent evidence on AI’s productivity benefits, its labor-displacing potential, or a placebo control. Exposure to information about labor displacement leads to a large reduction in intended AI adoption and advocacy (by 0.4–0.5 standard deviations) and a moderate reduction in staffing intentions (by 0.2 standard deviations). In contrast, information about productivity benefits has no significant average effect, although it increases advocacy among managers with low prior familiarity with AI. These findings indicate that middle managers’ responses to the information environment shape both technology adoption and employment intentions. Rather than inducing substitution away from labor and toward AI, information about AI’s labor-displacing potential leads managers to scale back both planned AI adoption and their staffing intentions. |
| Keywords: | Artificial Intelligence, Technology adoption, Managers, Gatekeepers, Productivity, Labor displacement |
| JEL: | J23 J24 O33 L2 M54 D83 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:iae:iaewps:wp2026n02 |
| By: | GHOSH, Arghya; HODAKA, Morita; SATO, Susumu |
| Abstract: | Firms compete in both product and labor markets by making decisions about hiring, training, and poaching workers. We develop a theoretical model in which firm-sponsored training links product and labor market competition. Changes in labor, product, or overall market power influence firms' incentives to invest in training, which can lead to clear-cut welfare improvements benefiting all relevant parties. The distinction between under- vs. overinvestment in training, a unique feature that emerges from the interaction between the two markets, plays a critical role in determining whether or not such welfare improvements are possible, enriching welfare and policy implications. |
| Keywords: | product market competition, oligopoly, market power, labor mobility, training, welfare, antitrust implications |
| JEL: | D21 L13 L40 M50 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:hit:hitcei:2025-04 |
| By: | Fotis, Panagiotis; Polemis, Michael |
| Abstract: | In this study, we present the first systematic evidence of the impact of cartel recidivism on innovation. Combining data from an international price-fixing cartel database with the structural characteristics of the US manufacturing sectors at the six-digit NAICS level, we analyze how cartel recidivists influence subsequent innovation outcomes. Using a staggered difference-in-differences (DiD) framework for 110 US cartel cases over the period 1979-2016 and a novel heterogeneous estimator, we find that cartel recidivists lead to a significant and sustained decline in innovation progress. We argue that cartel recidivists, rather than single offenders, drive the negative impact of collusion on innovation. The results of this study are vigorous to several robustness tests, justifying the absence of pretreatment effects and endogeneity. |
| Keywords: | Cartel; Recidivism; Innovation; Antitrust; Difference in Differences |
| JEL: | D43 K21 L13 |
| Date: | 2026–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128115 |
| By: | Debi Prasad Mohapatra; Vatsala Shreeti |
| Abstract: | Why would a market leader choose not to patent an innovation? We study Samsung's decision to forgo patent protection for dual SIM technology in the Indian mobile handset market. Using a structural model of demand and supply estimated on quarterly product-level data from the Indian mobile handset industry, we document that rival firms' dual SIM products generated a preference discovery externality. Rival firms' widespread adoption of the dual SIM technology allowed consumers to discover the value of the technology, also benefiting Samsung itself. Counterfactual simulations show that a patent would have suppressed this externality, reducing Samsung's equilibrium profits despite holding monopoly rights. Voluntary non-patenting was therefore privately optimal. Our findings shed light on wider debates about open-sourcing in software and other markets. |
| Keywords: | innovation, patenting, telecom, preference discovery |
| JEL: | L13 O33 O34 L63 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1344 |
| By: | Dayin Zhang; Panle Jia Barwick; Lu Han; Jonathan Kroah |
| Abstract: | Despite intense competition among mortgage lenders, borrowers face substantial price dispersion. We argue that realtor–loan officer referral networks are a key source of lender market power: by steering homebuyers toward a small set of loan officers, these networks restrict effective borrower choice even in competitive markets. Using a novel dataset linking 81, 306 realtors to 102, 860 loan officers across 41 states, we document that such networks are pervasive and highly concentrated — 85% of realtors direct over 40% of their clients to fewer than four loan officers — and that this concentration persists and even increases in markets with more lenders. IV estimates indicate that borrowers using referred loan officers pay 18.6 basis points higher mortgage rates, equivalent to $2, 609 in upfront costs on the average loan of $306K. Referral lending raises rate spreads by 36.5% and accounts for half of the residual cross-sectional variation in spreads. The premium is nearly three times as large for Hispanic borrowers as for White borrowers, and is systematically higher for Black borrowers and financially constrained households. We identify two channels: referrals reduce borrowers' search intensity across lenders, and referred loan officers exercise pricing power relative to colleagues within the same institution. Efficiency gains from faster processing and reduced denial risk do not offset the additional costs. |
| JEL: | D40 G21 L14 L85 R31 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35015 |
| By: | Canta, Chiara; Madio, Leonardo; Mantovani, Andrea; Reggiani, Carlo |
| Abstract: | Online platforms connecting physicians and patients are increasingly com-mon and often operate in heavily regulated contexts. We consider a platform that provides cost-reducing services for physicians and quality-enhancing ser-vices for patients. The platform also improves the matching between patients and physicians, thereby increasing competition among the latter. When prices are unregulated, physicians charge different prices online and offline, yet not all join the platform, which is suboptimal in terms of social welfare. The platform may also under- or over-invest in the quality level offered to patients, making their participation suboptimal as well. We then analyze price regulation. Un-der a single regulated price for medical visits, regardless of the booking channel, all physicians join the platform. However, the first-best allocation cannot be implemented: patient participation remains inefficiently low because patients do not internalize the platform’s cost-reducing effect. In contrast, allowing two regulated prices, one for offline visits and one for platform bookings, re-stores the first best. Overall, our findings suggest that an optimal pricing or reimbursement mechanism should differentiate across booking channels. |
| Keywords: | Healthcare online platforms; Price regulation; Patient-physician matching. |
| JEL: | I11 I18 L51 H75 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131693 |
| By: | Rocco Macchiavello; Josepa Miquel-Florensa; Nicolas de Roux; Eric Verhoogen; Mario Bernasconi; Patrick Farrell |
| Abstract: | Do the returns to quality upgrading pass through supply chains to primary producers? We explore this question in the context of Colombia's coffee sector, in which market outcomes depend on interactions between farmers, exporters (which operate mills), and international buyers, and contracts are for the most part not legally enforceable. We formalize the hypothesis that quality upgrading is subject to a key hold-up problem: producing high-quality beans requires long-term investments by farmers, but there is no guarantee that an exporter will pay a quality premium when the beans arrive at its mills. An international buyer with sufficient demand for high-quality coffee can solve this problem by imposing a vertical restraint on the exporter, requiring the exporter to pay a quality premium to farmers. Combining internal records from two exporters, comprehensive administrative data, and the staggered rollout of a buyer-driven quality-upgrading program, we find empirical support for the key theoretical predictions, both the lack of pass-through of quality premia under normal circumstances and the possibility of a buyer-driven solution through a vertical restraint. Calibration of the model suggests that one-third to two-thirds of the (substantial) gains from the program accrue to farmers, with the vertical restraint playing a critical role. The results are consistent with the hypotheses that quality upgrading can provide a path to higher incomes for farmers, but also that it is unlikely to be viable under standard market conditions in the sector. |
| Keywords: | Quality Upgrading, Relational Contracts, Vertical Restraints, Buyer-Driven Voluntary Standards. |
| JEL: | O12 F61 L23 Q12 Q13 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:25167 |