nep-mic New Economics Papers
on Microeconomics
Issue of 2007‒02‒03
six papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. Are Sunk Costs A Barrier To Entry? By Luis M.B. Cabral; Thomas Ross
  2. On the Edge of Your Seat: Demand for Football on Television and the Uncertainty of Outcome Hypothesis By Kevin Alavy; Alison Gaskell; Stephanie Leach; Stefan Szymanski
  3. Bargaining and posted prices: what does the Internet change ? By Michael A. Arnold (Dpt of Economics, U. Delaware); Thierry Pénard (CREM – CNRS)
  4. Exclusive Quality - Why Exclusive Distribution May Benefit the TV Viewers By Stennek, Johan
  5. Imperfect Competition and Costly Screening in the Credit Market under Conditions of Asymmetric Information By Kubo, Koji
  6. Diversity and demand externalities: How cheap information can reduce welfare By Heski Bar-Isaac; Guillermo Caruana; Vicente Cunat

  1. By: Luis M.B. Cabral; Thomas Ross
    Date: 2006
  2. By: Kevin Alavy (Initiative Futures); Alison Gaskell (Initiative Futures); Stephanie Leach (Tanaka Business School, Imperial College); Stefan Szymanski (Tanaka Business School, Imperial College)
    Abstract: This paper examines the relationship between the demand for English football on television and outcome uncertainty. It tests the uncertainty of outcome hypothesis by using minute-by-minute television viewership figures which avoids the problems encountered when estimating demand using match attendance. We find that although uncertainty matters, it is the progression of the match which drives viewership and as a draw looks increasingly likely, viewers are likely to switch channels. Games that end in victories have a higher average viewership than games that end in stalemates.
    Keywords: competitive balance, sports leagues, football, soccer, television
    JEL: L82 L83
    Date: 2006–12
  3. By: Michael A. Arnold (Dpt of Economics, U. Delaware); Thierry Pénard (CREM – CNRS)
    Abstract: The Internet has introduced a variety of online buying services that expand the reach of sellers and reduce search costs for buyers. In markets in which traditional outlets tend to establish prices through bargaining, these online intermediaries have also altered the price setting process. Perhaps the most well known example is which provides referral services in the automobile market. By using Autobytel, a buyer can obtain a posted price as an alternative to bargaining with a car dealer ship. To understand the effect of online referral systems on the price setting process, we construct a theoretical model of oligopolistic price competition in which one dealership has an exclusive contract with a referral intermediary. We show that posted prices offered through the referral system are not necessarily lower than offline prices (bargained prices). Our model provides theoretical insights relevant to results in the empirical literature addressing the role that Autobytel and other infomediaries play in online markets.
    Keywords: online markets, e-commerce, intermediary, autobytel, pricing
    JEL: D4 D83 L19 L89
    Date: 2007
  4. By: Stennek, Johan
    Abstract: Sports organizations, Hollywood studios and TV channels grant satellite and cable networks exclusive rights to televise their matches, movies and media contents. Exclusive distribution prevents viewers from watching attractive programs, and reduces the TV-distributors incentives to compete in prices. This paper demonstrates that exclusive distribution may also give providers of contents incentives to invest in higher quality and, as a result, force competitors to reduce their prices. Exclusive distribution may benefit all viewers, including those who are excluded.
    Keywords: advertising; bargaining; exclusive contracts; investment; quality; two-sided market
    JEL: C78 D43 K21 L42
    Date: 2007–01
  5. By: Kubo, Koji
    Abstract: This article provides an analysis of how banks determine levels of information production when they are in imperfect competition and there is a condition of information asymmetry between borrowers and banks. Specifically, the study concentrates on information production activities of banks in duopoly where they simultaneously determine intensity of pre-loan screening as well as interest rates. The preliminary model of this paper illustrates that due to strategic complementarities between banks, banking competition can result in inferior equilibrium out of multiple equilibria and insufficient information production. Policymakers must take into account the possible adverse effects of competition-enhancing policies on information production activities.
    Keywords: Banking, Imperfect competition, Information production, Banks, Credit, G World,others
    JEL: D82 G21
    Date: 2006–10
  6. By: Heski Bar-Isaac; Guillermo Caruana; Vicente Cunat
    Date: 2006

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