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on Industrial Organization |
| By: | Genakos, Christos; Kampouris, Themistoklis |
| Abstract: | This paper examines the “right†geographic definition of relevant markets by analyzing how excise tax pass-through varies with local competition in the retail gasoline market of a large metropolitan city. Using a natural experiment from three unanticipated and exogenous fuel tax hikes and detailed station-level price data, we show that average pass-through is invariant to the number of nearby competitors across various geographic definitions. This contrasts with theoretical predictions and prior island-based evidence, suggesting that the entire metropolitan area functions as a single market. Our findings challenge standard isodistance- or isochrone-based market delineations used in academic research and competition policy. |
| JEL: | H22 L1 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21091 |
| By: | Matthew Jaremski; Kris James Mitchener; Kilian Rieder |
| Abstract: | Firms often rebrand to counter negative shocks, but can it work? Using a historical natural experiment, we analyze a large sample of companies from the same industry (banking) that shared very similar names, but overwhelmingly decided to change them in response to a common, negative news shock. U.S. entry into World War I in 1917 created a sudden antiGerman backlash against anything that invoked an association with the now enemy. The shock itself was thus orthogonal to bank fundamentals and pre-existing trends, but pushed banks to reconsider their brands. After 1917, the few German-named banks that kept their tainted names saw significant declines in assets, deposits, and market share relative to other banks. However, German-named banks that rebranded mitigated much of the negative shock. Specifically, German-named banks that adopted a new non-ethnic brand name avoided between 75% and 85% of the anti-German effect, and those that adopted a new patriotic brand name were able to neutralize it completely. Overall, we find that “crisis rebranding” paid off in our historical setting regardless of the chosen brand, with patriotic rebranding proving the most effective at offsetting the exogenous shock. |
| Keywords: | corporate brands, brand management, brand equity, news shocks, reputation, World War I, commercial banks, patriotism |
| JEL: | D22 G21 L25 M31 N12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12795 |
| By: | Dirk Bergemann (Department of Economics, Yale University); Marek Bojko (Department of Economics, Yale University); Paul DŸtting (Google Research); Renato Paes Leme (Google Research); Haifeng Xu (Department of Computer Science, University of Chicago and Google Research); Song Zuo (Google Research) |
| Abstract: | We study the design of efficient dynamic recommendation systems, such as AI shopping assistants, in which a platform interacts with a user over multiple rounds to identify the most suitable product among those offered by advertisers. Advertisers have multi-dimensional private information: their private value from a purchase and private information about the user's preferences. In each round, the platform displays recommendations; the user learns product characteristics of the shown items and then chooses whether to purchase, exit without purchasing, or submit a new query. These actions generate a stream of feedbackÑpurchase, exit, and follow-up queriesÑthat is informative about the user's preferences and can be used both to refine future recommendations and to design contingent transfers. We introduce a class of data-driven dynamic team mechanisms that condition payments on realized user feedback. Our main result shows that data-driven dynamic team mechanisms achieve periodic ex-post implementation of the efficient allocation rule. We then develop variants that guarantee participation and deliver budget surplus, and provide conditions under which these properties can be jointly attained. |
| Date: | 2026–04–03 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2513 |
| By: | Xiaoming Cai (Peking University HSBC Business School); Pieter Gautier (Vrije Universiteit Amsterdam); Ronald Wolthoff (University of Toronto) |
| Abstract: | Digital platforms allocate buyer attention across sellers that differ in quality and breadth of appeal. We study a monopoly platform that sets meeting rates between buyers and two seller types --- niche sellers whose high-quality good is valued by a fraction x of buyers and mass-market sellers whose good is valued by all. Sellers compete by posting prices à la Burdett and Judd (1983), so buyer surplus requires competition, while platform revenue requires seller rents. This difference creates a systematic distortion: as search capacity grows, the platform keeps high-quality niche attention just past the point where extra exposure stops creating rents and starts eroding them – its saturation point – and diverts the rest to mass-market sellers. The resulting buyer-surplus loss converges to a finite limit proportional to the quality gap between the two goods, split equally between an allocative loss from too little high-quality exposure and excess rent extracted by sellers. Applying the model to Amazon product search and Google passage-ranking data indicates that, for captive buyers, both platforms operate past the saturation point, with buyer-surplus losses of 63 and 44 percent of the planner's benchmark, respectively. Allowing buyer participation to respond to the platform's recommendation strategy disciplines the platform and shrinks this loss. |
| Keywords: | Attention allocation, Recommendation systems, Search frictions, Two-sided markets, Enshittification of Internet |
| JEL: | D62 D83 L12 L40 |
| Date: | 2026–06–19 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20260035 |