|
on Regulation |
| By: | Giulia Canzian; Gianluca Mazzarella; Frank Verboven; Stefano Verzillo; Louis Ronchail |
| Abstract: | The roam-like-at-home regulation (RLAH) eliminated all mobile roaming surcharges to Eu-ropean consumers travelling within the European Economic Area (EEA). We measure the causal impact of the regulation on EEA roaming traffic, using the Rest of the World as a control group. We find large and heterogeneous effects on retail and wholesale traffic volumes and revenues. To evaluate the welfare effects of the regulation, we develop a framework that includes consumer surplus, retail and wholesale profits. The gains in consumer surplus are large, and mainly stem from data services. The consumer gains are proportionately larger in small, open economies and in countries with previously high roaming prices. Finally, total welfare increases considerably, because the consumer surplus gains far outweigh profit losses. As such, the removal of market power more than compensates for a distortion from a possible overconsumption at zero surcharges. |
| Keywords: | price caps, international roaming, mobile telecom, market integration |
| JEL: | L13 L51 L96 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9303&r= |
| By: | Ajayi, V.; Weyman-Jones, T.; ; |
| Abstract: | This paper examines the impact of deregulation and the political support for it on the electric power industry using a consistent state-level electricity generation dataset for the US contiguous states from 1997-2014. Recent analyses of productivity growth suggests that institutional factors are important and we wish to study the role of deregulation as a statelevel institutional change through two measures: (a) restructuring and (b) the political support for it, measured by the majority political affiliation of public utility commissions. We find evidence of positive impacts of deregulation (both restructuring and the political support for it) on technical efficiency across the models estimated. Our preferred model which allows for the control for deregulation variables on the mean and variance of the inefficiency shows an average technical efficiency of 73.1 percent. The results of the marginal effects reveal that the impact of deregulation including its political support on inefficiency is negative and monotonic, with the potential reduction of 8.4 percent in the mean of technical inefficiency, thereby suggesting a compelling evidence for generation efficiency improvement via deregulation. |
| Keywords: | Electricity generation, technical efficiency, marginal effect, restructuring, regulatory institutions |
| JEL: | C23 D24 L51 L94 |
| Date: | 2021–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2166&r= |
| By: | Daron Acemoglu |
| Abstract: | This essay discusses several potential economic, political and social costs of the current path of AI technologies. I argue that if AI continues to be deployed along its current trajectory and remains unregulated, it may produce various social, economic and political harms. These include: damaging competition, consumer privacy and consumer choice; excessively automating work, fueling inequality, inefficiently pushing down wages, and failing to improve worker productivity; and damaging political discourse, democracy's most fundamental lifeblood. Although there is no conclusive evidence suggesting that these costs are imminent or substantial, it may be useful to understand them before they are fully realized and become harder or even impossible to reverse, precisely because of AI's promising and wide-reaching potential. I also suggest that these costs are not inherent to the nature of AI technologies, but are related to how they are being used and developed at the moment - to empower corporations and governments against workers and citizens. As a result, efforts to limit and reverse these costs may need to rely on regulation and policies to redirect AI research. Attempts to contain them just by promoting competition may be insufficient. |
| JEL: | J23 J31 L13 L40 O33 P16 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29247&r= |
| By: | Marie-Laure Allain (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique); Claire Chambolle (ALISS - Alimentation et sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Patrick Rey (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Sabrina Teyssier (GAEL - Laboratoire d'Economie Appliquée de Grenoble - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes) |
| Abstract: | In a vertical chain in which two rivals invest before contracting with one of two competing suppliers, vertical integration can create hold-up problems for the rival. We develop an experiment to test this theoretical prediction in a setup in which suppliers can either pre commit ex ante to being greedy or degrade ex post the input they provide to their customer. Our experimental results confirm that vertical integration creates hold-up problems. However, vertical integration also generates more departures from theory, which can be explained by bounded rationality and social preferences. |
| Keywords: | Vertical integration,Hold-up,Experimental economics,Bounded rationality,Social preferences |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03341440&r= |
| By: | Hugo Molina (ALISS - Alimentation et sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | Alliances of buyers to negotiate input prices with suppliers are commonplace. Using pre- and post-alliances data on household purchases of bottled water, I develop a structural model of bilateral oligopoly to estimate the effects of three alliances formed by retailers on their bargaining power vis-à-vis manufacturers and retail prices paid by consumers. Results provide evidence of a countervailing buyer power effect that reduces retail prices by roughly 7%. Exploring determinants of buyer power, I find that changes in retailers' bargaining ability play an important role in the countervailing force exerted by the alliances which, otherwise, would have not been profitable. |
| Keywords: | Bilateral oligopoly,Countervailing buyer power,Bargaining,Antitrust policy |
| Date: | 2021–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03340176&r= |
| By: | Jan De Loecker; Chad Syverson |
| Abstract: | This chapter overviews productivity research from an industrial organization perspective. We focus on what is known and what still needs to be learned about the productivity levels and dynamics of individual producers, but also how these interact through markets and industries to influence productivity aggregates. We overview productivity concepts, facts, data, measurement, analysis, and open questions. |
| JEL: | D2 L1 L2 L6 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29229&r= |
| By: | Affeldt, P.; Argentesi, E.; Filistrucchi, Lapo (Tilburg University, School of Economics and Management) |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:1317bf39-d02e-4f61-a34f-e01f6efbefdd&r= |
| By: | Amit Gandhi; Aviv Nevo |
| Abstract: | This is an invited chapter for the forthcoming Volume 4 of the Handbook of Industrial Organization. We present empirical models of demand and supply in differentiated products industries with an emphasis on the key ideas arising from the recent applied literature. We start with a discussion of the challenges in modeling and estimation of demand for differentiated products, and focus on discrete choice characteristics-based demand models that address these challenges while allowing enough flexibility to capture realistic substitution patterns. Our discussion emphasizes how empirical strategies can leverage different features of data depending on the sources of variation that are commonly found in applied work. Moving to the supply-side, we show how demand estimates combined with a pricing model, can be used to recover markups and marginal costs. We also show how the model of pricing can be tested. We discuss a baseline Bertrand-Nash model of competitive pricing, and expand it to cover a) coordinated pricing, b) wholesale relationships, and c) bargaining. We end the chapter with extensions of the demand model, including dynamic and continuous demand. |
| JEL: | C01 D12 D22 D43 L13 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29257&r= |
| By: | Ehsan Samani; Mahdi Kohansal; Hamed Mohsenian-Rad |
| Abstract: | Convergence bidding, a.k.a., virtual bidding, has been widely adopted in wholesale electricity markets in recent years. It provides opportunities for market participants to arbitrage on the difference between the day-ahead market locational marginal prices and the real-time market locational marginal prices. Given the fact that convergence bids (CBs) have a significant impact on the operation of electricity markets, it is important to understand how market participants strategically select their CBs in real-world. We address this open problem with focus on the electricity market that is operated by the California ISO. In this regard, we use the publicly available electricity market data to learn, characterize, and evaluate different types of convergence bidding strategies that are currently used by market participants. Our analysis includes developing a data-driven reverse engineering method that we apply to three years of real-world data. Our analysis involves feature selection and density-based data clustering. It results in identifying three main clusters of CB strategies in the California ISO market. Different characteristics and the performance of each cluster of strategies are analyzed. Interestingly, we unmask a common real-world strategy that does not match any of the existing strategic convergence bidding methods in the literature. Next, we build upon the lessons learned from the existing real-world strategies to propose a new CB strategy that can significantly outperform them. Our analysis includes developing a new strategy for convergence bidding. The new strategy has three steps: net profit maximization by capturing price spikes, dynamic node labeling, and strategy selection algorithm. We show through case studies that the annual net profit for the most lucrative market participants can increase by over 40% if the proposed convergence bidding strategy is used. |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2109.09238&r= |
| By: | Zhijun Chen (Monash University) |
| Abstract: | Price squeezes have been commonly viewed as an exclusionary abuse under the argument of “constructive refusal to deal†, however, such an argument has been challenged by the courts and legal scholars. This paper proposes an exploitative rationale for price squeezes. A vertically integrated dominant firm can exploit efficiency gains from a downstream competitor and price squeezing is a necessary condition for such exploitation. Price squeezing forces the competitor to produce at a lower marginal cost than the dominant firm so that the dominant firm can earn more than the monopoly profit by extracting part of efficiency gains from the rival. Exploitation through price squeezing reduces the rival’s profit unfairly and distorts the production efficiency without benefiting consumers. Prohibiting price squeezes benefits the competitor and improves production efficiency without harming consumers. This paper lays a solid economic foundation for treating price squeeze cases and contributes to reconciling the diverging approach adopted by the courts in the United States and the European Union in recent price squeeze cases. |
| Keywords: | Price Squeeze, Margin Squeeze, Vertical Integration |
| JEL: | D42 L42 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2021-05&r= |
| By: | Arnold, Fabian (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Jeddi, Samir (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Sitzmann, Amelie (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | Within the regulation of net purchasing, investment incentives for residential PV depend on the remuneration for grid feed-in and the consumption costs that households can save by self-consumption. Network tariffs constitute a substantial part of these consumption costs. We use postcode-level data for Germany between 2009 and 2017 and exploit the regional heterogeneity of network tariffs to investigate whether they encourage to invest in PV installations and evaluate how the nonlinear tariff structure impacts residential PV adoption. Our results show that network tariffs do impact PV adoption. The effect has increased in recent years when self-consumption has become financially more attractive, and the results confirm the expectation that PV investments are driven by the volumetric tariff. Policy reforms that alter the share between the price components are, thus, likely to affect residential PV adoption. Further, with self-consumption becoming a key incentive, price signals can effectively support the coordination of electricity demand and supply in Germany. |
| Keywords: | Network tariffs; PV investments; self-consumption; price perception; panel data; prosumer; non-linear prices |
| JEL: | C33 D12 L51 Q42 |
| Date: | 2021–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2021_007&r= |
| By: | Schleich, Joachim; Schuler, Johannes; Pfaff, Matthias; Frank, Regine |
| Abstract: | Potential environmental benefits of green tariffs may be mitigated if households increase electricity consumption after they subscribe to green tariffs. Using metered data of household electricity consumption from a large provider of green electricity in Germany, our quasi-experimental analysis finds that household switching to a green tariff leads to a non-monetary renewable rebound effect of around 8.5 %. Further, our findings imply that this renewable rebound effect is persistent over at least four years. These findings may be explained by moral licensing effects which induce households to permanently change their habitual behaviours and/or to acquire additional electricity-consuming technologies. Thus, failure to account for a renewable rebound in policy evaluation may lead to systematically underestimate the costs of achieving energy and climate targets. |
| Keywords: | rebound,renewable rebound,green tariffs,moral licensing |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s072021&r= |
| By: | Ahmed S. Alahmed; Lang Tong |
| Abstract: | We introduce NEM X, an inclusive retail tariff model that captures features of existing net energy metering (NEM) policies. It is shown that the optimal prosumer decision has three modes: (a) the net-consuming mode where the prosumer consumes more than its behind-the-meter distributed energy resource (DER) production when the DER production is below a predetermined lower threshold, (b) the net-producing mode where the prosumer consumes less than its DER production when the DER production is above a predetermined upper threshold, and (c) the net-zero energy mode where the prosumer's consumption matches to its DER generation when its DER production is between the lower and upper thresholds. Both thresholds are obtained in closed-form. Next, we analyze the regulator's rate-setting process that determines NEM X parameters such as retail/sell rates, fixed charges, and price differentials in TOU tariffs in on and off-peak periods. A stochastic Ramsey pricing program is formulated that maximizes social welfare subject to the revenue break-even constraint for the regulated utility. Performance of NEM X policies is evaluated using real and synthetic data to illuminate impacts of NEM policy designs on social welfare, cross-subsidies of prosumers by consumers, and payback time of DER investments that affect long-run DER adoptions. |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2109.09977&r= |
| By: | Liu, Y.; Jiang, Z.; Guo, B. |
| Abstract: | Targeting on improving the efficiency of power generation, China announced its plan to reform the electricity wholesale market. A focal point of the wholesale market reform is to introduce a stable and reliable electricity spot market. Using Guangdong's spot market pilot operations as a case study, this article becomes the first which uses ex-post market data to assess the efficacy of China's electricity spot market. To investigate the stability of the spot market, we estimate the relationship between prices and demand. We find the electricity supply curve to be non-linear and convex, suggesting the needs to invest more thermal capacity to stabilise the spot market prices (SMPs). To investigate the reliability of the spot market, we first estimate the market distortion caused by a price floor on the SMPs, and then examine whether local market power exists. The price floor on the SMPs resulted in a welfare transfer from consumers to producers, the monetary value of which equals to 1.3% of the tradable value of the day-ahead market. We also find evidence of local market power in the east of Guangdong, suggesting the necessity of investing more power lines connecting the west to the east. Finally, policy implications are provided. |
| Keywords: | China power market reform, market failures, local market power, electricity spot market |
| JEL: | Q41 Q48 D61 |
| Date: | 2021–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2165&r= |
| By: | OECD |
| Abstract: | The promotion of widespread, affordable, and high-quality broadband is a prerequisite for the digital transformation of economies and societies. Foreseeing the role of broadband as an accelerator of economic, social and cultural development, the OECD adopted the Council Recommendation on Broadband Development in 2004. Since then, important developments have taken place in broadband technologies and markets. As part of the review of the 2004 Recommendation undertaken from 2018 to 2020 and resulting in the adoption of the revised 2021 OECD Council Recommendation on Broadband Connectivity, this report examines the evolution of broadband technologies, policies and regulation to foster broadband developments since 2004 as well as the benefits of, and challenges to, accelerating these developments to further enable digital transformation and inclusive growth. |
| Date: | 2021–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:317-en&r= |
| By: | Ryan Kellogg; Mar Reguant |
| Abstract: | This paper discusses contributions that industrial organization economists have made to our understanding of energy markets and environmental regulation. We emphasize the substantive contributions of recent papers while also highlighting how this literature has adopted and sometimes augmented theoretical and empirical tools from industrial organization. Many of the topics examined by this literature—especially auctions, investment, productivity and innovation, and regulation—also apply to a variety of settings beyond energy and the environment. We also indicate areas where future research is likely to be fruitful, with an emphasis on how industrial organization economists can help inform energy and environmental policies. |
| JEL: | L0 Q2 Q3 Q4 Q5 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29235&r= |
| By: | OECD |
| Abstract: | Communication market structures and their effect on delivering efficient and inclusive connectivity is of key interest to policy makers and regulators. This report discusses emerging competition trends in OECD broadband markets that are shaping market structures, covering both fixed and mobile networks. The increasing complementarity of fixed and wireless networks and the convergence of previously separate markets have led to new forms of communication market competition. While convergence has been acting as a driver for market consolidation, there is also increased scrutiny in merger review. Some OECD countries are discussing options to keep mobile communication markets open to new entrants in the context of merger reviews, while others have experienced a recent wave of entry. The report explores the role of horizontal and vertical mergers in communication markets, presents examples of entry in mobile communication markets, and discusses some of effects of entry and consolidation in OECD markets. |
| Date: | 2021–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:316-en&r= |
| By: | OECD |
| Abstract: | Without connectivity, there can be no digital transformation of economies and societies. With this in mind, the OECD Recommendation of the Council on Broadband Development was adopted in 2004. Since then, broadband markets, underlying technologies, and the policies in place to spur the development of broadband networks have undergone significant changes. This document summarises the outcome of an extensive questionnaire sent to delegates of OECD countries and stakeholder groups. The questionnaire aimed to gather information on the experience of OECD countries concerning broadband development in general, and more particularly their experience in implementing the 2004 Recommendation. The responses to the questionnaire were used to inform the review and revision of the 2004 Recommendation, which resulted in the adoption of the 2021 OECD Council Recommendation on Broadband Connectivity. |
| Date: | 2021–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:318-en&r= |
| By: | Saglam, Ismail |
| Abstract: | Revelation principle implies that given any admissible social welfare function, the outcome of Baron and Myerson's (1982) (BM) optimal direct-revelation mechanism under incentive constraints cannot be dominated by any other mechanism in expected utilities. However, since the expected total surplus varies with a change in the social welfare function, Pareto improvements should be possible if the monopolist and consumers can agree, by means of side payments that reveal no additional information to the regulator, on the use of an alternative social welfare function which would generate a lower expected deadweight loss. We check the validity of this intuition by integrating the BM mechanism with an induced cooperative bargaining model where unilateral pre-donation by consumers or the producer is allowed. Under this new mechanism producer's pre-donation in the ex-ante stage always leads to ex-ante Pareto improvement while a certain amount of it completely eliminates the expected deadweight loss. Moreover, if optimally designed in the interim stage, the producer's pre-donation may also lead under some cost parameters to interim (and also (ex-post) Pareto improvement. Consumers, on the other hand, have no incentive to make a unilateral pre-donation, nor to reverse the optimal pre-donation of the monopolist. |
| Keywords: | Monopoly regulation; cooperative bargaining; pre-donation. |
| JEL: | C78 D42 L51 |
| Date: | 2021–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:109741&r= |
| By: | Robert Clark; Ignatius Horstmann; Jean-François Houde |
| Abstract: | Numerous recently uncovered cartels operated along the supply chain, with firms at one end facilitating collusion at the other – hub-and-spoke arrangements. These cartels are hard to rationalize because they induce double marginalization and higher costs. We examine Canada’s alleged bread cartel and provide the first comprehensive analysis of hub-and-spoke collusion. We make three contributions: i) Using court documents and pricing data we provide evidence that collusion existed at both ends of the supply chain, ii) we show that collusion was effective, increasing inflation by about 40% and iii) we provide a model explaining why this form of collusion arose. |
| JEL: | L1 L4 L41 L42 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29253&r= |
| By: | Escribano Sáez, Álvaro; Ortega, Álvaro |
| Abstract: | Renewable generation has increased exceptionally its weight in power markets, and its relevance is due to increase with the introduction of recent climate policies in Europe. The merit-order effect ranks first on the direct impacts of renewables on electricity markets. However, in order to analyse its impact, it is important to control for the different forces driving electricity prices. As a result, the analysis through a structural model of demand and supply of electricity is interesting to capture price drivers and therefore measure correctly the merit-order effect. The objective of this paper is tointroduce this framework on the Spanish day-ahead market, using weekly data for the period 2013-2019. The empirical analysis is carried out using structural vector autoregressive models (SVAR) and autoregressive distributed lag models (ARDL) to each equation, with the addition of GARCH models to control for the possible autoregressive volatility behaviour of the residuals. In line with previous literature, we obtain that demand of electricity is elastic to economic growth, price-inelastic and shows a significant level of substitution between electricity and natural gas. The supply function is also price-inelastic, after controlling for capacity factors, inputs prices and external balance, that are shown to be significant. The estimated values of the merit-order effect is aligned with previous literature. We obtain that a 10% increase in the average quantity generated by the special regime technologies (wind, solar and CHP) is associated with a 5 % reduction in electricity prices, around 2.35Euros/MWh of the average price for the analysed period. |
| Keywords: | Demand of Electricity; Supply of Electricity; Merit-Order; Renewable Generation; Capacity Factor; Day-Ahead Power Market |
| JEL: | L94 L51 L52 L13 |
| Date: | 2021–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:33298&r= |
| By: | Didier Laussel; Ngo Van Long; Joana Resende |
| Abstract: | A durable good monopolist faces a continuum of heterogeneous customers who make purchase decisions by comparing present and expected price-quality offers. The monopolist designs a sequence of price-quality menus to segment the market. We consider the Markov Perfect Equilibrium (MPE) of a game where the monopolist is unable to commit to future price-quality menus. We obtain the novel results that (a) under certain conditions, the monopolist covers the whole market in the first period (even when a static Mussa-Rosen monopolist would not cover the whole market), because this is a strategic means to convince customers that lower prices would not be offered in future periods, and that (b) this can happen only under the stage-wise Stackelberg leadership assumption (whereby consumers base their expectations on the value of the state variable at the end of the period). Conditions under which MPE necessarily involve sequentially trading are also derived. |
| Keywords: | product quality, durable good monopoly, second-degree price discrimination, Coase conjecture |
| JEL: | C73 D42 L12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9294&r= |
| By: | Dirk Bergemann (Cowles Foundation, Yale University); Tibor Heumann (Pontificia Universidad Católica de Chile); Stephen Morris (Dept. of Economics, MIT); Constantine Sorokin (Glasgow University and Higher School of Economics); Eyal Winter (The Hebrew University of Jerusalem) |
| Abstract: | In digital advertising, a publisher selling impressions faces a trade-off in deciding how precisely to match advertisers with viewers. A more precise match generates efficiency gains that the publisher can hope to exploit. A coarser match will generate a thicker market and thus more competition. The publisher can control the precision of the match by controlling the amount of information that advertisers have about viewers. We characterize the optimal trade-off when impressions are sold by auction. The publisher pools premium matches for advertisers (when there will be less competition on average) but gives advertisers full information about lower quality matches. |
| Keywords: | Second Price Auction, Conflation, Targeted Advertising, Impressions, Two-Sided Private Information, Bayesian Persuasion, Information Design |
| JEL: | D44 D47 D83 D84 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2300&r= |
| By: | David Bardey (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UNIANDES - Universidad de los Andes [Bogota]); Luigi Siciliani (Unknown) |
| Abstract: | We investigate the effect of competition in the nursing homes sector with a two-sided market approach. More precisely, we investigate the distributional implications across the three key actors involved (residents, nurses and nursing homes) that arise from the two-sidedness of the market. Within a Hotelling set up, nursing homes compete for residents and for nurses, who provide quality to residents, by setting residents price and nurses wage. Nurses are assumed altruistic and therefore motivated to provide quality. The market is two-sided because: i) a higher number of residents affects nurses workload, which affects their willingness to provide labour supply; and ii) a higher number of nurses affects residents quality through a better matching process and by relaxing nurses time constraints. Our key findings are that i) the two-sidedness of the market leads to higher wages for nurses, which makes the nurses better off; ii) this is then passed to residents in the form of higher prices, which makes residents worse off; iii) nursing homes profits are instead unaffected. In contrast, when nurses wages are regulated, the two-sidedness of the market implies a transfer between residents and nursing homes. When residents price are regulated, it implies a transfer between nurses and nursing homes. These results are robust to institutional settings which employ pay-for-performance schemes (that reward either nursing homes or nurses): the two-sidedness of the market is strengthened and residents are still worse off. |
| Keywords: | Nursing homes,Competition,Two-sided markets,Distribution |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03340880&r= |
| By: | Penelope Buckley (GAEL - Laboratoire d'Economie Appliquée de Grenoble - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes) |
| Date: | 2021–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03335199&r= |
| By: | Ginger Zhe Jin; Zhentong Lu; Xiaolu Zhou; Lu Fang |
| Abstract: | In the world of omnichannel retail, some brands open a flagship store at online marketplaces, while others avert it. Focusing on a large e-commerce platform, we empirically study how flagship entry affects consumers, the platform, and various sellers on the platform. We find flagship entry may benefit consumers by expanding the choice set, by intensifying price competition within the entry brand, and by improving consumer perception for parts of the platform. In the meantime, flagship entry cannibalizes the sales of same-brand sellers, while other brands may gain as the buyer base expands on the platform. Counterfactual simulation suggests that flagship entry improves the gross merchandise value (GMV) of the platform but hurts existing sellers of the entry brand. On average, the effect on consumer welfare is more positive if the flagship entry is from a non-prominent brand than from a prominent brand, because consumers tend to lower their willingness to pay for individual sellers upon a prominent flagship entry. In hypothetical scenarios where flagship entry were accompanied by constraints on other same-brand sellers, the reduced competition would benefit the flagship store but hurt consumers. |
| JEL: | D4 L1 L8 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29239&r= |