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on Microeconomics |
| By: | Damien Broussolle (Laboratoire de Recherche en Gestion et Economie, Institut d'Etudes Politiques, Strasbourg) |
| Abstract: | The paper focuses on the impact of the Full Market Opening in postal services especially on prices. The paper first summons up the specificities of the sector and the deregulation implemented so far. The paper then studies the consequences on separated prices and the survival of the historical operator of market opening. It seems that after a first period of effective competition, with a change in the price structure, the market could reach a new steady equilibrium. |
| Keywords: | Postal services, deregulation. |
| JEL: | L87 R11 L43 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lar:wpaper:2008-22&r=mic |
| By: | Vincenzo Atella; Jay Bhattacharya; Lorenzo Carbonari |
| Abstract: | The aim of this article is to analyze the relationship between drug price and drug quality and how it varies across two of the most common regulatory regimes in the pharmaceutical market: Minimum Efficacy Standards (MES) and Price Controls (PC). We develop a model of adverse selection where a pharmaceutical company can charge different prices to a heterogeneous group of buyers for its (innovative) drug, and we evaluate the properties of the equilibria under the two regimes. We model consumer heterogeneity stemming from differences in the willingness-to-pay for drug quality, measured through ex-post efficacy. The theoretical analysis provides two main results. First, the average drug quality delivered is higher under the MES regime than in the PC regime or a in combination of the two. Second, PC regulation reduces the difference in terms of high-low quality drug prices. The empirical analysis based on Italian and US data corroborates these results. |
| JEL: | I1 L51 L65 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14567&r=mic |
| By: | Jun Chen (Department of Economics, Carleton University); Zhiqi Chen (Department of Economics, Carleton University) |
| Abstract: | In this paper we study the efficiency losses of monopoly by analyzing a model where a firm's total costs of production decrease with the manager's effort to control costs. We consider two separate cases with regard to ownership and control: (1) the owner of the firm manages the firm himself; and (2) the owner hires a manager to operate the firm. We demonstrate that even in the case where the owner manages the firm, the level of effort exerted by the owner-manager of a monopoly is not first-best. Interestingly, the productive inefficiency of monopoly in this case may be caused by too much rather than too little effort. In such a situation, moreover, the separation of ownership and control can mitigate the productive inefficiency of monopoly, thus raising the intriguing possibility that managerial slack can actually improve the efficiency of monopoly equilibrium. To phrase our results in Hicks'(1935) terminology, a monopolist does not necessarily live a quiet life, and a quiet life is not necessarily a bad thing from the perspective of economic efficiency. |
| Keywords: | Monopoly, Efficiency losses, Principal-agent problem |
| JEL: | L12 D82 |
| Date: | 2008–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:car:carecp:08-04&r=mic |
| By: | Yan Li (Centre for Competition Policy, University of East Anglia) |
| Abstract: | This study examines the impacts of reforms – privatization, new entry and independent regulatory authority – on mobile network penetration and expansion using a new and hitherto unused panel dataset for 30 national mobile markets (i.e. 29 OECD countries and China) over the time period 1991-2006 under a 3-equation econometric framework. The estimation results confirm that introducing new entry is, in general, positively correlated with mobile network penetration and expansion; and in particular, the third entry brings many more benefits than the second one. The results also highlight the crucial role of an independent regulator in privatized mobile markets. Especially, the dynamic estimation results suggest that without an independent regulator, privatization is, on average, negatively correlated with mobile network expansion, even in certain competitive market environments. |
| Keywords: | New entry, privatization, independent regulator, mobile network, econometric analysis |
| JEL: | L10 L51 L96 K23 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:ccp:wpaper:wp08-35&r=mic |
| By: | Sebastian J. Goerg; Thorsten Chmura; Reinhard Selten |
| Abstract: | In this paper we introduce four new learning models: impulse balance learning, impulse matching learning, action-sampling learning, and payoff-sampling learning. With this models and together with the models of self- tuning EWA learning and reinforcement learning, we conduct simulations over 12 different 2×2 games and compare the results with experimental data obtained by Selten & Chmura (2008). Our results are two-fold: While the simulations, especially those with action-sampling learning and impulse matching learning successfully replicate the experimental data on the aggregate, they fail in describing the individual behavior. A simple inertia rule beats the learning models in describing individuals behavior. |
| Keywords: | Learning, Action-sampling, Payo?-sampling, Impulse balance, Impulse matching, Reinforcement, self-tuning EWA, 2×2 games, Experimental data |
| JEL: | C72 C91 C92 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:bon:bonedp:bgse18_2008&r=mic |
| By: | David, Paul; Aghion, Philippe |
| Abstract: | This paper reflects on the relevance of "systems-theoretic" approaches to theinterdependent policy issues relating to the dynamics of science, technology and innovation and their relationship to economic growth. Considering the approach that characterizes much of the current economics literature's treatment of technology and growth policies, we pose the critical question: what kind of systems paradigm is likely to prove particularly fruitful in that particular problem-domain? Evolutionary, neo-Schumpeterian, and complex system dynamics approaches are conceptually attractive, and we examine their respective virtues and limitations. Both qualities are redily visible when one tries to connect systems-relevant research with practical policy-making in this field. |
| Keywords: | science and technology policy; innovation policy; R&D subsidies; IPR; systems research; economic growth theory; complementarities; positive feedbacks; complexity; market failurees; policy implementation failures |
| JEL: | O1 D50 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12096&r=mic |