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on Regulation |
| By: | Stephanie Assad (Unknown); Emilio Calvano (Unknown); Giacomo Calzolari (Unknown); Robert Clark (Unknown); Vincenzo Denicolo (Unknown); Daniel Ershov (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); Justin Pappas Johnson (Unknown); Sergio Pastorello (Unknown); Andrew Rhodes (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); Lei Xu (Unknown); Matthijs Wildenbeest (Unknown) |
| Abstract: | Markets are being populated with new generations of pricing algorithms, powered with Artificial Intelligence, that have the ability to autonomously learn to operate. This ability can be both a source of efficiency and cause of concern for the risk that algorithms autonomously and tacitly learn to collude. In this paper we explore recent developments in the economic literature and discuss implications for policy. |
| Keywords: | Platforms.,Algorithmic Pricing,Antitrust,Competition Policy,Artificial Intelligence,Collusion |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03360129&r= |
| By: | Rom\'an P\'erez-Santalla; Miguel Carri\'on; Carlos Ruiz |
| Abstract: | In the present work we tackle the problem of finding the optimal price tariff to be set by a risk-averse electric retailer participating in the pool and whose customers are price-sensitive. We assume that the retailer has access to a sufficiently large smart-meter dataset from which it can statistically characterize the relationship between the tariff price and the demand load of its clients. Three different models are analyzed to predict the aggregated load as a function of the electricity prices and other parameters, as humidity or temperature. In particular, we train linear regression (predictive) models to forecast the resulting demand load as a function of the retail price. Then we will insert this model in a quadratic optimization problem which evaluates the optimal price to be offered. This optimization problem accounts for different sources of uncertainty including consumer's response and renewable source availability, and relies on a stochastic and risk-averse formulation. Moreover, we consider both standard forward based contracts and the recently introduced power purchase agreement contracts as risk-hedging tools for the retailer. The results are promising as profits are found for the retailer with highly competitive prices and some possible improvements are shown if a better dataset could be produced. A realistic case study and multiple sensitivity analyses have been performed to characterize the risk-aversion behavior of the retailer considering price-sensitive consumers. It has been assumed that the energy procurement of the retailer can be satisfied from the pool and different types of contracts. The obtained results reveal that the risk-aversion degree of the retailer strongly influences contracting decisions, whereas the price sensitiveness of consumers has a higher impact on the selling price offered. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.02735&r= |
| By: | Yanyou Chen (University of Toronto, Department of Economics, Max Gluskin House, 150 St. George Street, 310, Toronto, ON, Canada, M5S 2E9) |
| Abstract: | This project evaluates the optimal transport network in North America by first analyzing the proposed $25 billion merger between the Canadian Pacific Railway and the Kansas City Southern Railway. Then this project studies different sequences of mergers and find the optimal path of mergers to form the transport network in North America. Current simulation results suggest that average over all origin-destination markets, the proposed merger between Canadian Pacific Railway and the Kansas City Southern Railway will decrease the average shipment cost by 6.27%. Among different local markets, regions near or utilize the route from Des Moines, IA -- Kansas City, MO -- Joplin, MO will have the largest efficiency gain from the proposed merger. |
| Keywords: | Merger; Transport Network; Railroad |
| JEL: | L13 L43 L92 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2112&r= |
| By: | Mehmet Ekmekci (Department of Economics, Boston College); Alexander White (School of Economics and Management, Tsinghua University); Lingxuan Wu (Department of Economics, Harvard University) |
| Abstract: | We study the effects of competition and interoperabilty in platform markets. To do so, we adopt an approach of competition in net fees, which is well-suited to situations where users pay additional charges, after joining, for on-platform interactions. Compared to other approaches, net fees expand the tractable scope to allow platform asymmetry and variable total demand. Regarding competition, our findings raise concerns, including possible dominance-inducing entry, which symmetric models overlook. Our results are more optimistic towards the helpfulness of policies that promote interoperability among platforms, but they urge caution when total demand variability is a significant factor. |
| Keywords: | Platform Competition, Big Tech, Net Fees, Interoperability |
| JEL: | D21 D43 D85 L13 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2113&r= |
| By: | Ali Hortaçsu, Olivia R. Natan, Hayden Parsley, Timothy Schwieg, Kevin R. Williams (University of Chicago and NBER); Ali Hortaçsu, Olivia R. Natan, Hayden Parsley, Timothy Schwieg, Kevin R. Williams (University of Chicago and NBER); Ali Hortaçsu, Olivia R. Natan, Hayden Parsley, Timothy Schwieg, Kevin R. Williams (University of Chicago and NBER); Ali Hortaçsu, , , (University of Chicago and NBER); Olivia R. Natan (University of California, Berkeley); Hayden Parsley (University of Texas, Austin); Timothy Schwieg (University of Chicago, Booth); Kevin R. Williams (Yale School of Management and NBER) |
| Abstract: | We study how organizational boundaries affect pricing decisions using comprehensive data provided by a large U.S. airline. We show that contrary to prevailing theories of the firm, advanced pricing algorithms have multiple biases. To quantify the impacts of these biases, we estimate a structural demand model using sales and search data and recover the demand curves the firm believes it faces using forecasting data. In counterfactuals, we show that correcting biases introduced by organizational teams individually have little impact on market outcomes, but addressing all biases simultaneously leads to higher prices and increased dead-weight loss in the markets studied. |
| Keywords: | Pricing Frictions, Organizational Inertia, Dynamic Pricing, Revenue Man-agement, Behavioral IO |
| JEL: | C11 C53 D22 D42 L10 L93 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2109&r= |
| By: | Sarit Markovich (Kellogg School of Management, Northwestern University, Evanston, IL, USA); Yaron Yehezkel (Coller School of Management, Tel-Aviv University, Ramat-Aviv, Israel) |
| Abstract: | We consider a platform that collects data from users. Data has commercial benefit to the platform, personal benefit to the user, and public benefit to other users. We ask whether the platform, or users, should have the right to decide which data the platform commercializes. We find that when users differ in their disutility from the commercialization of their data and the public benefit of data is high (low), it is welfare enhancing to let the platform (users) control the data. In contrast, when heterogeneity is in the disutility from the commercialization of different data items, it is welfare enhancing to let users (the platform) control the data when the public benefit of data is high (low). Furthermore, we find that allowing the platform to compensate users for their data is not always welfare enhancing and competition does not necessarily result in the efficient outcome. |
| Keywords: | data regulation, network externalities, platform competition |
| JEL: | L1 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2108&r= |
| By: | Laura Blattner; Scott Nelson; Jann Spiess |
| Abstract: | We characterize optimal oversight of algorithms in a world where an agent designs a complex prediction function but a principal is limited in the amount of information she can learn about the prediction function. We show that limiting agents to prediction functions that are simple enough to be fully transparent is inefficient as long as the bias induced by misalignment between principal's and agent's preferences is small relative to the uncertainty about the true state of the world. Algorithmic audits can improve welfare, but the gains depend on the design of the audit tools. Tools that focus on minimizing overall information loss, the focus of many post-hoc explainer tools, will generally be inefficient since they focus on explaining the average behavior of the prediction function rather than sources of mis-prediction, which matter for welfare-relevant outcomes. Targeted tools that focus on the source of incentive misalignment, e.g., excess false positives or racial disparities, can provide first-best solutions. We provide empirical support for our theoretical findings using an application in consumer lending. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.03443&r= |
| By: | Tianshu Sun (Marshall School of Business, University of Southern California, Los Angeles, CA 90089 United States); Zhe Yuan (School of Economics, Zhejiang University, Hangzhou 310000 China); Chunxiao Li (Alibaba Group); Kaifu Zhang (Alibaba Group); Jun Xu (Alibaba Group) |
| Abstract: | Personal data has become a key input in Internet Commerce, facilitating the matching between millions of customers and merchants. Recent data regulations in China, Europe and US restricts Internet platforms' ability to collect and use personal data for personalized recommendation and may fundamentally impact Internet Commerce. In collaboration with the world's largest E-commerce platform, we conduct a large-scale field experiment to measure the potential impact of data regulation policy, and to understand the value of personal data in Internet Commerce. For a random subset of 555,800 customers on Alibaba platform, we simulate the regulation by banning the use of personal data in the homepage recommendation algorithm and record the matching process and outcomes between these customers and merchants. Compared to the control group with personal data, we observe a significant higher concentration in the algorithmic recommendation of products in the treatment group and a very sharp decrease in the matching outcomes as measured by both customer engagement (clickthrough rate and product browsing) and market transaction (GMV). The negative effect is disproportionate and more pronounced for niche merchants and customers who would benefit most from E-commerce. We discuss the economic impact of data regulation on Internet Commerce, as well as the role of personal data in generating value and fostering innovations. |
| Keywords: | Personal Data, Privacy Regulation, E-commerce, Field experiments, Personalization, Market Structure |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2110&r= |
| By: | Heiko Karle; Heiner Schumacher; Rune Vølund |
| Abstract: | We consider the Salop (1979) model of product differentiation and assume that consumers are uncertain about the qualities and prices of firms’ products. They can inspect all products at zero cost. A share of consumers is expectation-based loss averse. For these consumers, a purchase plan, which involves buying products of varying quality and price with positive probability, creates disutility from gain-loss sensations. Even at modest degrees of loss aversion they may refrain from inspecting all products and choose an individual default that is strictly dominated in terms of surplus. Firms’ strategic behavior exacerbates the scope for this effect. The model generates “scale-dependent psychological switching costs” that increase in the value of the transaction. We find empirical evidence for the predicted association between switching behavior and loss aversion in new survey data. |
| Keywords: | switching costs, competition, loss aversion |
| JEL: | D21 D83 L41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9313&r= |
| By: | Tröltzsch, Jenny; Gerner, Nadine Vanessa; Meergans, Franziska; Stein, Ulf; Sutcliffe, Robynne |
| Abstract: | This paper constitutes one of six analyses of cross-sectoral challenges in water governance. These have been conducted as part of the STEER research project and results are published in separate analyses and position papers. The Emscher River restoration project reveals wide-ranging usage conflicts associated with the long-term revitalisation of the water system for the development of the natural environment. The Emscher was converted into an open wastewater channel in the late 19th Century. With mining activity having ceased in the Ruhr region, it has been possible to discharge wastewater via subterranean sewers and improve the environmental quality of the water courses. This modification process requires coordination between sectors and local authorities, particularly the water, open space development and nature conservation sectors. The completed governance analysis shows that coordination in the Emscher catchment area is already effective, be it between stakeholders at local, regional and national level (vertical), or between the different sectors (horizontal). Examples include forums for dialogue between local authorities, voluntary environmental monitoring during construction, financing options for green infrastructure projects and a GIS (geographic information system)-based tool facilitating coordination between different public departments. The regional water board, the Emschergenossenschaft (Emscher Cooperative), initiates many processes that combine water course modification with urban planning and landscape architecture. There is room for improvement when it comes to involving citizens at an early stage and on a comprehensive basis in all planning and implementation processes in order to increase acceptance among stakeholders. Planning processes should also be characterised by a higher degree of flexibility. The following recommendations arise from the analysis: * Coordination at regional level has proven to be a success factor. This involves regular dialogue between regional stakeholders. * The cooperative principle, which involves the region's cities and companies as associates within the water board, is highly conducive to regional coordination. * Working groups operating across sectors and local authorities have also emerged as a useful instrument. * The concept of ecosystem services could also be useful for identifying usage conflicts at an early stage and finding viable solutions and/or compromises. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:diebps:222020&r= |
| By: | Papadopoulos, Konstantinos G.; Petrakis, Emmanuel; Skartados, Panagiotis |
| Abstract: | In a two-tier industry with an upstream monopolist supplier and downstream competition with differentiated goods, we show that passive partial forward integration (PPFI) has ambiguous effects on competition and welfare. When vertical trading is conducted via linear tariffs, PPFI is pro-competitive and welfare-increasing. While under two-part tariffs, it is anti-competitive and welfare-decreasing. These hold irrespectively of the degree of product differentiation, the observability or secrecy of contract terms, the mode of downstream competition, and the distribution of bargaining power between firms. |
| Keywords: | Partial Passive Forward Integration; Two-Part Tariffs; Linear Tariffs; Competition; Welfare |
| JEL: | D43 L13 |
| Date: | 2021–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:33354&r= |
| By: | Ghosh, Meenakshi |
| Abstract: | We model a situation where two sellers trade vertically and horizontally differentiated goods on a platform for which they are charged a commission fee. Sellers' costs are asymmetric due to differences in the fees charged by the platform and in their costs of production. Consumers purchase either a base good, or a bundle comprising of the base good and an add-on, from one of the sellers on the platform. Consumers differ in their brand preferences, valuations of quality and in their levels of sophistication. More specifically, we assume that there is a fraction of consumers who are naive, and do not observe or consider add-on prices - possibly because they do not foresee their demand for an add-on - until after they have committed to buying the base good from a seller. We examine how the interplay of these forces shapes consumer behavior, sellers' pricing strategies and cost pass-through, and platform fees and revenues. |
| Keywords: | add-on pricing, consumer naivete, cost asymmetry, horizontal differentiation, platform fees, cost pass-through |
| JEL: | D43 L11 L14 L15 |
| Date: | 2021–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:109981&r= |
| By: | Bucksteeg, Michael; Mikurda, Jennifer; Weber, Christoph |
| Abstract: | The expansion of wind and solar energy has primarily led to the decarbonisation of the electricity sector. Against this background, power-to-gas (PtG) is seen as a solution supporting the decarbonisation of other sectors, such as heating or transport. As the generation mix will transitionally be based on conventional generation technologies, the upcoming integration of PtG into electricity markets comes with several challenges. Notably, the design of environmental levies and carbon pricing should create efficient incentives for the utilisation of PtG, reflecting the value of the CO2 emissions avoided by hydrogen or methane. This contribution studies the role of the regulatory framework in the integration of PtG, with special attention to carbon pricing. We extend an optimisation model by the PtG technology and competing flexibilities, such as storage or demand-side management. We develop several scenarios with regard to levies, levels of CO2 price, techno-economic parameters of flexibilities and shares of variable renewable energy sources for the year 2025. We find that carbon pricing that considers the value of the CO2 emissions avoided by hydrogen or methane supports the market integration of PtG, whereas too low CO2 prices might lead to adverse effects. Subsequently, implications for energy policy are discussed. |
| Keywords: | electricity market model,carbon pricing,power-to-gas,energy policy |
| JEL: | Q4 Q5 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:242982&r= |
| By: | Michele Fioretti (Département d'économie); Jorge Tamayo (Harvard Business School) |
| Abstract: | Renewable generation creates a tradeoff between current and future energy production as generators produce energy by releasing previously stored resources. Studying the Colombian market, we find that diversified firms strategically substitute fossil fuels for hydropower before droughts. This substitution mitigates the surge in market prices due to the lower hydropower capacity available during dry periods. Diversification can increase prices, instead, if it results from mergers steepening a firm’s residual demand. Thus, integrating production technologies within firms can smooth the clean-energy transition by offsetting higher prices during scarcity periods if the unaffected technologies help store renewables more than exercise market power. |
| Keywords: | Energy transition; Renewables; Hydropower generation; Diversified production technologies; Energy storage; Wholesale electricity markets |
| JEL: | L25 Q21 D47 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/1qif9fqehq930ovnr511k1el4f&r= |
| By: | Marco Gonzalez-Navarro (Department of Agricultural & Resource Economics, University of California Berkeley, 216 Giannini Hall, Berkeley, California, 94720, USA); Jonathan D. Hall (Department of Economics and Munk School of Global Affairs and Public Policy, University of Toronto, 150 St. George Street, Toronto, Ontario M5S 3G7, Canada); Harrison Wheeler (Department of Economics, University of California Berkeley, 530 Evans Hall #3880, Berkeley, California, 94720, USA); Rik Williams (Uber Technologies, Inc., 1515 3rd St., San Francisco, California 94158, USA) |
| Abstract: | There is a contentious debate on whether ride-hailing complements or substitutes public transportation. We address this question using novel data and an innovative identification strategy. Our identification strategy relies on exogenous variation in local transit availability caused by rail expansions. Using proprietary trip data from Uber for 35 countries, we use a dynamic difference-in-differences strategy to estimate how transit expansions affect local Uber ridership in 100 m distance bands centered on the new train station. Our estimates compare Uber ridership within a distance band before and after a train station opens relative to the next further out distance band. Total effects are obtained by aggregating relative effects at all further distance bands. We find that a new rail station opening increases Uber ridership within 100 m of the station by 60\%, and that this effect decays to zero for distances beyond 300 m. This sharp test implies Uber and rail transit are complements. |
| Keywords: | Public transit, ride-hailing |
| JEL: | R40 O33 L91 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2111&r= |
| By: | Kurt R. Brekke (Department of Economics, Norwegian School of Economics (NHH)); Luigi Siciliani (Department of Economics and Related Studies, University of York, Heslington); Odd Rune Straume (Department of Economics/NIPE, University of Minho) |
| Abstract: | Integration of health care services has been promoted in several countries to improve the quality and coordination of care. We investigate the effects of such integration in a model where providers compete on quality to attract patients under regulated prices. We identify circumstances under which integration either increases or reduces the quality of services provided. In the absence of synergies related to costs or benefits, integration generally leads to increases in quality for some services and reductions for others. The corresponding effect on health benefits depends largely on whether integration leads to quality dispersion or convergence across services. |
| Keywords: | Integrated care, quality, competition, health care. |
| JEL: | I11 L12 L13 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:11/2021&r= |
| By: | Paolo Falbo; Carlos Ruiz |
| Abstract: | The paper develops a typical management problem of a large power producer (i.e., he can partly influence the market price). In particular, he routinely needs to decide how much of his generation it is preferable to commit to fixed price bilateral contracts (e.g., futures) or to the spot market. However, he also needs to plan how to distribute the production across the different plants under his control. The two decisions, namely the sales-mix and the generation plan, naturally interact, since the opportunity to influence the spot price depends, among other things, by the amount of the energy that the producer directs on the spot market. We develop a risk management problem, since we consider an optimization problem combining a trade-off between expectation and conditional value at risk of the profit function of the producer. The sources of uncertainty are relatively large and encompass demand, renewables generation and the fuel costs of conventional plants. We also model endogenously the price of futures in a way reflecting an information advantage of a large power producer. In particular, it is assumed that the market forecast the price of futures in a naive way, namely not anticipating the impact of the large producer on the spot market. The paper provides a MILP formulation of the problem, and it analyzes the solution through a simulation based on Spanish power market data. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.02016&r= |
| By: | Vineet Jagadeesan Nair; Venkatesh Venkataramanan; Rabab Haider; Anuradha Annaswamy |
| Abstract: | With increasing penetration of DERs in the distribution system, it is critical to design market structures that enable smooth integration of DERs. A hierarchical local electricity market (LEM) structure is proposed in this paper with a secondary market (SM) at the lower level representing secondary feeders and a primary market (PM) at the upper level, representing primary feeders, in order to effectively use DERs to increase grid efficiency and resilience. The lower level SM enforces budget, power balance and flexibility constraints and accounts for costs related to consumers, such as their disutility, flexibility limits, and commitment reliability, while the upper level PM enforces power physics constraints such as power balance and capacity limits, and also minimizes line losses. The hierarchical LEM is extensively evaluated using a modified IEEE-123 bus with high DER penetration, with each primary feeder consisting of at least three secondary feeders. Data from a GridLAB-D model is used to emulate realistic power injections and load profiles over the course of 24 hours. The performance of the LEM is illustrated by delineating the family of power-injection profiles across the primary and secondary feeders as well as corresponding local electricity tariffs that vary across the distribution grid. Together, it represents an overall framework for a Distribution System Operator (DSO) who can provide the oversight for the entire LEM. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.02358&r= |
| By: | Lindgren, Charlie (Dalarna University, 791 88 Falun, Sweden); Li, Yujiao (Dalarna University, 791 88 Falun, Sweden); Rudholm, Niklas (Institute of Retail Economics (Handelns Forskningsinstitut)) |
| Abstract: | This paper investigates how firm entry into a price comparison website marketplace affects firm productivity, profits, and wages. We want to answer the key research question: Why do firms compete on price comparison websites? A substantial literature indicates that competition in such marketplaces is fierce, leading to lower prices for products sold. We suggest that participation in these marketplaces also leads to increased productivity, i.e., output increases when holding constant the level of inputs used. This leads to increased profits, motivating firms to enter price comparison websites despite fierce competition. Our results indicate that for the full sample of firms, PriceSpy participation increases output by almost 12% when holding the level of inputs constant. Also, investigation of who gains from the increased productivity shows that, for entering firms, operating profits increase by 9% and gross wages by 14% when studying the full sample of firms. That labor gains more from PriceSpy participation is even clearer when studying the impact on wholesale and retail firms separately. For those firms, gross wages increased by 16–17% after entry, while no statistically significant impact was found regarding operating profits. |
| Keywords: | Online retailing; e-commerce; price comparison websites; productivity; value added. |
| JEL: | D22 D24 D33 L81 |
| Date: | 2020–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hfiwps:0014&r= |
| By: | Jovanovic, Dragan; Wey, Christian; Zhang, Mengxi |
| Abstract: | This paper argues that it cannot be taken for granted that any merger that raises consumer surplus also increases social welfare. We assume a Cournot model with homogeneous goods, linear demand, and constant marginal costs, to show that a merger can raise consumer surplus while harming social welfare. Within this framework, we show that such an outcome depends on two conditions: the merger is between small firms (i.e., relatively inefficient firms) and it reduces concentration; that is, a constellation which can be characterized as a "runner-up" merger. |
| Keywords: | Runner-up Mergers,Efficiencies,Oligopoly,welfare |
| JEL: | K21 L13 L41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:371&r= |
| By: | Haucap, Justus; Fritz, Daniel; Thorwarth, Susanne |
| Abstract: | Die Messewirtschaft ist in Deutschland durch eine Konkurrenz privater und öffentlicher Messeveranstalter gekennzeichnet. Im Gegensatz zu den privaten Veranstaltern sind die öffentlichen Messeveranstalter vertikal integriert: Sie besitzen und betreiben einerseits die lokale Messeinfrastruktur, veranstalten aber auch selbst zahlreiche Messen. Aus dieser Asymmetrie können Wettbewerbsverzerrungen entstehen wie etwa eine Selbstbevorzugung. Die Corona-Pandemie hat diese Problematik nochmals verschärft. Durch eine Selbstregulierung, etwa in Form einer Selbstverpflichtung zu einem Code of Conduct, könnte sich die Messewirtschaft verpflichten, nicht zwischen Eigen- und Fremdmessen zu diskriminieren, um eine wettbewerbsschädliche Selbstbevorzugung zu vermeiden. |
| Keywords: | Messewirtschaft,Wettbewerb,Messestandort Deutschland |
| JEL: | D43 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:diceop:111&r= |
| By: | Raveesh Mayya (Leonard N. Stern School of Business, New York University, New York, New York, United States 10012); Zhuoxin Li (Carroll School of Management, Boston College, Chestnut Hill, Massachusetts, United States 02467) |
| Abstract: | This empirical research investigates the impact of an aggressive growth strategy used by delivery platforms to add restaurants to their platforms without restaurants' consent. Although these platforms provide a valuable option to consumers to access restaurant services, they experience strong resistance from the other side (restaurants), due to unclear benefits from the partnership and the potential risks of cannibalization. To grow the multi-sided networks, platforms have experimented with a new seeding strategy that enlists restaurants on platforms without restaurants' consent. Such a seeding strategy is controversial and is under regulation scrutiny. For example, California enacted a policy in 2020 that made it illegal for delivery platforms to list restaurants without a formal partnership with them. Using a rich panel dataset compiled from public and proprietary sources, this research exploits two shocks to identify the impact of the aggressive platform growth strategy and the retrospective regulation on restaurants. The first shock is non-partnered restaurants being listed on the platform without the restaurants' consent. The second shock is the de-listing of non-partnered restaurants from the platform after California deemed such a platform strategy illegal. Our results suggest that being listed on a platform reduces a restaurant's $DineIn$ visits but increases $TakeOut$ visits. Furthermore, independent restaurants lose more $DineIn$ visits than the gain in $TakeOut$ visits, resulting in a net loss of total demand. Furthermore, retrospective regulation to delist non-partnered restaurants actually hurt these restaurants. After the regulation, independent restaurants not only lose $TakeOut$ visits but also fail to recover their pre-listing $DineIn$ visits. The findings provides practical insights that can help restaurants, delivery platforms, and policymakers make informed decisions around policies and regulations. |
| Keywords: | Multi-sided platforms; on-demand delivery; network effects; regulation; seeding; platform policy |
| JEL: | L14 L43 L88 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2114&r= |
| By: | Atabek Atayev |
| Abstract: | In markets with search frictions, consumers can acquire information about goods either through costly search or from friends via word-of-mouth (WOM) communication. How do sellers' market power react to a very large increase in the number of consumers' friends with whom they engage in WOM? The answer to the question depends on whether consumers are freely endowed with price information. If acquiring price quotes is costly, equilibrium prices are dispersed and the expected price is higher than the marginal cost of production. This implies that firms retain market power even if price information is disseminated among a very large number of consumers due to technological progress, such as social networking websites. |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.00032&r= |