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on Industrial Organization |
| By: | Paolo Bertoletti; Federico Etro |
| Abstract: | We study entry in markets with monopolistic competition under quasi-linear preferences, with homogeneous and heterogeneous firms. For common demand systems with a price aggregator which works through a demand shifter, entry tends to be insufficient: given market pricing, the business stealing effect of entry cannot dominate the consumer surplus effect. We identify preferences that deliver efficient production and firm selection (including the isoelastic demand case), confirming the insufficient entry result also compared to first-best allocations, and discuss a specification (including the Logit case) that delivers efficient entry. Under more general preferences competitive effects of entry strengthen the case for insufficient entry. |
| Keywords: | Entry, Monopolistic competition, Business stealing, Heterogeneous firms |
| JEL: | D11 D43 L11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:frz:wpaper:wp2026_15.rdf |
| By: | Montag, Felix |
| Abstract: | Current enforcement practice does not consider how mergers alter the merging parties' incentives to petition for trade protection. I document mergers between domestic producers across jurisdictions that are followed by tariff petitions. I develop a model to characterize the trade-policy channel of mergers. Theoretically, a domestic merger raises the profitability of tariffs when offshoring is unavailable; once offshoring is possible, the effect becomes ambiguous. I apply this framework to a merger between domestic producers in the U.S. appliance industry. Empirically, I find that when import competition is weak, the merging parties prefer to lower their own costs through offshoring; when import competition is strong, the merger makes it more profitable for them to raise their foreign rivals' costs through tariffs. The resulting consumer harm is comparable in magnitude to the direct market-power effect. A hypothetical cross-border merger reduces the profitability of tariffs in this market. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:342514 |
| By: | Delina E. Agnosteva; Constantinos Syropoulos; Yoto V. Yotov |
| Abstract: | We characterize collusive pricing in an international cartel spanning two host countries and pooling incentive constraints across markets, under general demand restricted only by a mild curvature condition that admits constant elasticity. Under domestic monopoly, fragmentation can weaken collusion and raise host welfare, whereas richer profit opportunities abroad strengthen collusion and may lower it; hosts prefer moderate barriers to either free trade or complete separation. Under domestic competition both results reverse. Whether fragmentation disciplines cartels thus depends on market structure in their home countries. Since collusion requires no trade between members, prices rather than trade flows carry the identifying information. |
| Keywords: | fragmentation, oligopoly, multimarket interactions, cartel discipline, collusive pricing, trade costs, domestic market structure. |
| JEL: | D43 F10 F12 F13 F15 L12 L13 L41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12949 |
| By: | Lapo FILISTRUCCHI,; Alessandro GUAZZINI; Samuele SCARPELLI |
| Abstract: | We build a stylized model of the value chain of an industry in which component suppliers sell their products to manufacturers and the licensor chooses the level of the value chain at which it licenses. We then study whether the licensing level chosen by the licensor affects profits of the firms in different competitive environment of both the component and the product markets. We first show that, contrary to common expectations, in our model the level of the value chain at which the licensee operates does not affect the profits of the firms, the level of the royalty and the price of the final product, irrespective of the degree of competition in the component and product markets. Our results shed some light on the debate, brought to public attention by Daimler v. Nokia and Continental v. Avanci, on the level of the value chain at which licensors of standard essential patents should license. Our findings may also be of guidance for an evaluation of the withdrawn proposal of a Standard Essential Patents Regulation and the recently revised Technology Transfer Block Exemption Regulation in the EU. |
| Keywords: | Standard Essential Patents, Licensing Level, Automotive Industry, SEP regulation, TTBER |
| JEL: | L24 L41 L43 L62 K21 L12 L13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:frz:wpaper:wp2026_13.rdf |
| By: | Cabon-Dhersin, Marie-Laure; Poyago-Theotoky, Joanna; Raffin, Natacha |
| Abstract: | We explore the interplay of competition and environmental policies to address the question of whether green antitrust has beneficial effects in terms of both environmental and consumer welfare performance. We focus on two environmental policy tools, an emission tax and an emission standard, and explore three particular configurations: competitive ‘green R&D, collaborative ‘green’ R&D in the form of a joint lab, and the benchmark case of no ‘green’ R&D. Firms compete in the product market by selling a homogeneous product, either by setting prices (Bertrand competition) or quantities (Cournot competition) while facing convex costs. We show that ‘green antitrust’ can unambiguously improve the effectiveness of environmental policy without undermining the interests of either consumers or producers, establishing a ‘win-win-win’ outcome. |
| Keywords: | Environmental Economics and Policy, Sustainability |
| Date: | 2026–08–31 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:410235 |
| By: | Ricardo Perez-Truglia; Jeffrey Yusof |
| Abstract: | The rise of superstar firms has made dominant companies central to modern economic life, and antitrust enforcement is one of the main policy tools for regulating their market power. Public opinion can shape the political and regulatory environment in which antitrust enforcement takes place, yet there is little direct evidence on what drives these preferences. We conduct a pre-registered information-provision experiment with 4, 000 American households. Respondents were told about one of five real antitrust cases and randomly assigned to information treatments designed to study four potential drivers of support for antitrust enforcement: perceived market share, perceived consumer harm, perceived unfair competition, and perceived negative image. All four treatments moved the beliefs they were designed to affect, but their effects on demand for antitrust differed sharply. Information about consumer harm had the most systematic effects: it increased plaintiff support and support for break-up and conduct remedies, with effects remaining visible one month later, and also spilled over to broader support for antitrust policies. By contrast, and contrary to expert forecasts, information about market share had no meaningful effect on demand for antitrust enforcement. The findings suggest that the public thinks like economists in one key respect: they do not care about market share per se, but respond instead to consumer harm. One factor outside the core economic framework, perceived unfair competition, also matters, though its effects are more limited in scope. We discuss implications for policymakers and regulators. |
| JEL: | C90 D83 K21 L40 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35503 |
| By: | Biswas, Suparna; Crespi, John; Harris-Lagoudakis, Katherine |
| Keywords: | Industrial Organization |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404623 |
| By: | Dennis W. Carlton; John List; Allan Shampine; Hal Sider; Theresa Sullivan |
| Abstract: | The Federal Trade Commission ("FTC") brought an antitrust lawsuit against Meta in 2021, claiming that Meta's acquisitions of Instagram and WhatsApp had allowed it to monopolize a relevant market for apps providing "Personal Social Network Services" and that consumers had been harmed because the acquisitions allowed Meta to increase ad loads imposed on Facebook and Instagram app users. However, the FTC's market definition was not based on quantitative evidence and its assertion of harm ignored the two-sided nature of the Meta platforms, which makes it impossible to determine whether a merger would increase ad loads based on theory alone. In contrast, Meta's economic experts used modern theoretical and quantitative tools of economic analysis to address market definition and competition issues. This paper summarizes the field experiment, natural experiments, and related quantitative analyses presented by Meta's economic experts that demonstrated the FTC's market definition excluded apps that were closer substitutes to Meta's apps than the included apps. The paper also summarizes the results of a demerger simulation that accounted for the two-sided nature of apps and was based in part on the results of the field experiment. That analysis demonstrated that the FTC's claim that the acquisitions had led to increased ad load was not supported by the data. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:feb:framed:00839 |