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on Network Economics |
| By: | Martin Jørgensen |
| Abstract: | This paper discusses ways of strengthening the competitive environment in order to help boost productivity performance in various sectors of the Danish economy. It looks at a number of indicators of the strength of competition - including price levels, industrial concentration and product market regulation - and it discusses the appropriateness of the competition legislation framework. The paper then focuses on the large public sector, which has been slow to open up to competition, partly because of regulatory restrictions but also because some local governments are too small to handle tenders and provide an attractive market for private providers. The paper also looks at the process of liberalising network industries and at various regulations that still impede effective competition in a number of other sectors, including construction, housing, distribution and professional services. <p> Dynamiser la croissance en stimulant la concurrence au Danemark <p> Ce document examine les moyens de renforcer le cadre concurrentiel pour stimuler la productivité dans divers secteurs de l'économie du Danemark. Il passe en revue un certain nombre d'indicateurs de la vigueur de la concurrence - notamment le niveau des prix, la concentration industrielle et la réglementation des marchés de produits - et évalue l'adéquation du cadre législatif de la concurrence. L'analyse se porte ensuite sur le vaste secteur public, qui a tardé à s'ouvrir à la concurrence, du fait de restrictions réglementaires mais aussi parce que certaines collectivités locales sont trop petites pour gérer des appels d'offres et offrir un marché attractif à des prestataires privés. Ce document examine aussi le processus de libéralisation des industries de réseau ainsi que différentes réglementations qui font encore obstacle à une concurrence efficace dans plusieurs autres secteurs, dont la construction, le logement, la distribution et les services professionnels. |
| Keywords: | Denmark;competition; regulation; product markets; network industries; retail distribution; construction; public sector; competitive neutrality; public procurement; privatisation |
| JEL: | H4 K21 L1 L32 L33 L41 L43 L44 L8 L9 O52 |
| Date: | 2005–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:oed:oecdec:431&r=net |
| By: | Coucke, Kristien |
| Abstract: | The unequal situation of large global firms with extensive networks and smaller domestic firms has created a dual structure in many industries. In this paper we examine the competitive position of domestic single-plant firms under growing rivalry of global companies that source abroad and flexibly coordinate production activities within a multinational network. Growing rivalry is modelled as a decrease in sourcing costs for multinational firms. We separate a direct and an indirect effect – i.e. competitive strategic effect- of a lower sourcing cost on the production decision of multinational and domestic firms. We show how cost characteristics of domestic firms determine the impact of these effects. We theoretically find that, ceteris paribus, output flexible firms will be most vulnerable and exit first from the market. Product differentiation is found to reduce the strategic effect of global sourcing by MNE’s on the competitive position of domestic firms. |
| Keywords: | Sourcing, multinational firms, flexibility, exit Note |
| Date: | 2005–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2005-7&r=net |
| By: | Gunther Schnabl (Tuebingen University) |
| Abstract: | In this paper, we examine the rationale for dollar and euro pegging in Russia and the CIS. We consider macroeconomic stabilization and transaction costs for international trade as rationales for pegging to the euro. Dollarization of international assets and liabilities are examined as determinants of exchange rate stabilization against the dollar. The impact of network externalities from a common anchor for all CIS countries is explored. Tests on de facto exchange rate stabilization reveal that dollar pegging has been pervasive in the CIS. |
| Keywords: | CIS, Exchange Rate Systems |
| JEL: | F31 F32 |
| Date: | 2005–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpif:0505015&r=net |
| By: | Mark Armstrong (University College London) |
| Abstract: | There are many examples of markets involving two groups of agents who need to interact via 'platforms', and where one group's benefit from joining a platform depends on the number of agents from the other group who join the same platform. This paper presents theoretical models for three variants of such markets: a monopoly platform; a model of competing platforms where each agent must choose to join a single platform; and a model of 'competing bottlenecks', where one group wishes to join all platforms. The main determinants of equilibrium prices are (i) the relative sizes of the cross-group externalities, (ii) whether fees are levied on a lump-sum or per-transaction basis, and (iii) whether a group joins just one platform or joins all platforms. |
| Keywords: | Two-sided markets, network externalities, supermarkets, advertising |
| JEL: | L |
| Date: | 2005–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0505009&r=net |
| By: | Urs Meister (University of Zurich) |
| Abstract: | The periodical re-auction of a water monopoly concession causes the danger of underinvestment. If the life-time of specific assets such as water pipes exceeds the contract length and transferring the ownership of assets is difficult, the incumbent franchisee faces a hold-up problem. Using a simple auction model that considers the specifics of the piped water sector this paper shows that investment incentives may vary depending on the applied auction scheme. The model is designed as a two stage game, where the franchisee decides about investment on the first and competes with a potential market entrant on the second stage. Investment tends to be higher in sealed bid auctions than in an English auction, since the incumbent benefits from an information advantage. Additionally investment may vary in a first- and a second-price sealed bid auction depending on several factors such as costs or effectiveness of investment. The analysis is extended by a vertical separation. |
| Keywords: | Water, Networks, Franchise Bidding, Investment |
| JEL: | L95 L43 D21 Q25 |
| Date: | 2005–05–26 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0505012&r=net |
| By: | Richard Akresh (University of Illinois at Urbana-Champaign) |
| Abstract: | Researchers often assume household structure is exogenous, but child fostering, the institution in which parents send their biological children to live with another family, is widespread in sub-Saharan Africa and provides evidence against this assumption. Using data I collected in Burkina Faso, I analyze a household's decision to adjust its size and composition through fostering. A household fosters children as a risk-coping mechanism in response to exogenous income shocks, if it has a good social network, and to satisfy labor demands within the household. Increases of one standard deviation in a household's agricultural shock, percentage of good network members, or number of older girls increase the probability of sending a child above the current fostering level by 29.1, 30.0, and 34.5 percent, respectively. Testing whether factors influencing the sending decision have an opposite impact on the receiving decision leads to a rejection of the symmetric, theoretical model for child fostering. |
| Keywords: | Child Fostering, Risk-coping, Social Networks, Household Structure |
| JEL: | O15 J12 D10 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:902&r=net |