|
on Regulation |
| By: | Renato Gomes (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, CNRS - Centre National de la Recherche Scientifique); Andrea Mantovani (TBS - Toulouse Business School) |
| Abstract: | Online intermediaries greatly expand consumer information, but also raise sellers' marginal costs by charging high commissions. To prevent disintermediation, some platforms adopted price parity and anti-steering provisions, which restrict sellers' ability to use alternative sales channels. Whether to uphold, reform, or ban these provisions has been at the center of the policy debate, but, so far, little consensus has emerged. As an alternative, this paper studies how to cap platforms' commissions. The utilitarian cap reflects the Pigouvian precept according to which the platform should charge net fees no greater than the informational externality it exerts on other market participants. |
| Keywords: | Extreme value theory,Commission caps,Regulation,Price parity,Platforms |
| Date: | 2022–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03629525&r= |
| By: | Frédéric Cherbonnier (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); David J. Salant; Karine van der Straeten (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, CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | An auction of transport capacity can only roll forward if competitive bidders show up at the start. To characterize bidding behavior, we develop a model with a single incumbent potentially in competition with a single challenger; should the challenger obtain slots, the two firms will engage post-auction in capacity con-strained price competition. We show how the auction structure, that is, whether the slots are auctioned one at a time, and if not, how they are packaged affects the outcome. Our key finding is that the division of the available slots into tranches can significantly affect the outcome of the auction. Absent any set-asides, a single auc-tion for all the slots will almost certainly be won by an incumbent. Set-asides can enable the challenger to win one or more packages of slots. Further, when the slots are split up, and auctioned one-at-a-time or in batches, a challenger's prospects improve significantly, and no longer rely only on set-asides. The implications of our analysis are (a) the outcome will depend crucially on auction design decisions,(b) set-asides for challengers can help and (c) an auction that results in successful entry by challengers may result in reduced auction revenues and industry profits. |
| Keywords: | Rail transportation,Open access,Auctions,Regulation |
| Date: | 2022–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03629619&r= |
| By: | Daniel F. Garrett (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); Renato Gomes (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, CNRS - Centre National de la Recherche Scientifique); Lucas Maestri (FGV-EPGE - Universidad de Brazil) |
| Abstract: | We study competition by firms that simultaneously post (potentially nonlinear) tariffs to consumers who are privately informed about their tastes. Market power stems from informational frictions, in that consumers are heterogeneously informed about firms' offers. In the absence of regulation, all firms offer quantity discounts. As a result, relative to Bertrand pricing, imperfect competition benefits disproportionately more consumers whose willingness to pay is high, rather than low. Regulation imposing linear pricing hurts the former but benefits the latter consumers. While consumer surplus increases, firms' profits decrease, enough to drive down utilitarian welfare. By contrast, improvements in market transparency increase utilitarian welfare, and achieve similar gains on consumer surplus as imposing linear pricing, although with limited distributive impact. On normative grounds, our analysis suggests that banning price discrimination is warranted only if its distributive benefits have a weight on the societal objective. |
| Keywords: | Asymmetric information,Informational frictions,Linear pricing,Nonlinear pricing,Oligopoly |
| Date: | 2022–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03629517&r= |
| By: | Bruno Jullien (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, CNRS - Centre National de la Recherche Scientifique); Alessandro Pavan (Northwestern University [Evanston]); Marc Rysman (BU - Boston University [Boston]) |
| Abstract: | The chapter has 9 sections, covering the theory of two-sided markets and related empirical work. Section 1 introduces the reader to the literature. Section 2 covers the case of markets dominated by a single monopolistic rm. Section 3 discusses the theoretical literature on competition for the market, focusing on pricing strategies that rms may follow to prevent entry. Section 4 discusses pricing in markets in which multiple platforms are active and serve both sides. Section 5 presents alternative models of platform competition. Section 6 discusses richer matching protocols whereby platforms pricediscriminate by granting access only to a subset of the participating agents from the other side and discusses the related literature on matching design. Section 7 discusses identication in empirical work. Section 8 discusses estimation in empirical work. Finally, Section 9 concludes. |
| Keywords: | Matching,Network effects,Pricing,Platform,Two-sided market |
| Date: | 2022–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03629451&r= |
| By: | Milo Bianchi (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, TSM - Toulouse School of Management Research - CNRS - Centre National de la Recherche Scientifique - TSM - Toulouse School of Management - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées); Matthieu Bouvard (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, TSM - Toulouse School of Management Research - CNRS - Centre National de la Recherche Scientifique - TSM - Toulouse School of Management - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées); Renato Gomes (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, CNRS - Centre National de la Recherche Scientifique); 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); Vatsala Shreeti (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) |
| Abstract: | We connect various streams of academic literature to shed light on how the degree of interoperability in mobile payments affects market outcomes and welfare. We organize our discussion around four dimensions of interoperability. First, we consider mobile network interoperability (whether clients of one telecom can access another telecom's payment services) in connection with the IO literature on tying. Second, we discuss platform level interoperability (the ability to send money offnetwork) in light of the literature on compatibility. We also build on the behavioral IO literature to suggest how the effects of interoperability may be very heterogeneous across various types of firms and consumers, or even backfire. Third, we consider interoperability in the cash-in-cash-out agent network, in light of the literature on co-investment in network industries, and of more specific studies on ATMs' interoperability. Fourth, we discuss how the literature in banking and on data ownership can be used to understand interoperability of data. We conclude with some broader remarks on policy implications and on possible directions for future research. |
| Keywords: | Mobile Payments,Interoperability,Financial Inclusion,Competition,Policy. |
| Date: | 2022–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03629513&r= |
| By: | Miwa Nakai (Fukui Prefectural University); Victor von Loessl (University of Kassel); Heike Wetzel (University of Kassel) |
| Abstract: | We evaluate a stated choice experiment on dynamic electricity tariffs based on two representative household surveys from Germany and Japan. Our results indicate significant differences between German and Japanese respondents’ preferences towards dynamic tariffs, with the latter generally being more open to dynamic pricing. Furthermore, our unique experimental design allows to disentangle preferences for inter- and intraday price changes, which are two essential tariff characteristics. In this respect, our results suggest that households need significant compensation in order to accept frequently changing price patters. In contrast, they are mostly indifferent with respect to the number of price changes per day. Besides the implementation of an environmental treatment message, we additionally investigate tariff characteristics, which aim at overcoming household acceptance barriers. To this end, a restrictive use of households’ consumption data, price caps, as well as highlighting the environmental benefits associated to dynamic tariffs present themselves as suitable tools to reduce households’ aversions against dynamic electricity tariffs. |
| Keywords: | Dynamic electricity tariffs, Stated choice experiment, Household acceptance barriers, Tariff design |
| JEL: | C35 D12 Q41 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202213&r= |
| By: | Bruno Jullien (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); Markus Reisinger (Frankfurt School of Finance & Management); 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) |
| Abstract: | This paper examines the effects of personalized pricing on brand distribution. We explore whether a brand manufacturer prefers to sell through its own retail outlet only (mono distribution) or through an independent retailer as well (dual distribution). Personalized pricing allows for higher rent extraction but also leads to more fierce intra-brand competition than does uniform pricing. Due to the latter effect, a brand manufacturer may prefer mono distribution even if the retailer broadens the demand of the manufacturer's product. By contrast, with uniform pricing, selling through both channels is always optimal. This result holds for wholesale contracts consisting of two-part tariffs as well as for linear wholesale tariffs. We also show that the manufacturer may obtain its largest profit in a hybrid pricing regime, in which only the retailer charges personalized prices. Keywords: personalized pricing, distribution channels, dual distribution, vertical contracting, downstream competition. |
| Keywords: | Vertical contracting,Distribution strategies,Personalized pricing,Downstream competition. |
| Date: | 2022–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03632634&r= |
| By: | Thomas Mariotti (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, CNRS - Centre National de la Recherche Scientifique); Nikolaus Schweizer (Tilburg University [Netherlands]); Nora Szech (KIT - Karlsruhe Institute of Technology); Jonas von Wangenheim (University of Bonn) |
| Abstract: | We study the optimal design of information nudges for present-biased consumers who make sequential consumption decisions without exact prior knowledge of their long-term consequences. For any distribution of risks, there exists a consumer-optimal information nudge that is of cutoff type, recommending abstinence if riskiness is high enough. Depending on the distribution of risks, more or less consumers may have to be sacriced in that they cannot be warned even though they would like to be. Under a stronger bias for the present, the target group receiving a credible warning to abstain must be tightened, but this need not increase the probability of harmful consumption. If some consumers are more strongly present-biased than others, traffic-light nudges turn out to be optimal and, when subgroups of consumers differ sufficiently, the optimal traffic-light nudge is also subgroup-optimal. We finally compare the consumer-optimal nudge with those a health authority or a lobbyist would favor. |
| Keywords: | Nudges,Information Design,Present-Biased Preferences,Self-Control |
| Date: | 2022–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03629566&r= |
| By: | Renato Gomes (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, CNRS - Centre National de la Recherche Scientifique); Jean-Marie Lozachmeur (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, CNRS - Centre National de la Recherche Scientifique); Lucas Maestri (FGV-EPGE - Universidad de Brazil) |
| Abstract: | We study oligopolistic competition by firms practicing second-degree price discrimination. In line with the literature on demand estimation, our theory allows for comovements between consumers' taste for quality and propensity to switch brands. If low-type consumers are sufficiently less (more) brand loyal than high types, (i) quality provision is inefficiently low at the bottom (high at the top) of the product line, and (ii) informational rents are negative (positive) for high types, while positive (negative) for low types. We produce testable comparative statics on pricing and quality provision, and show that more competition (in that consumers become less brand-loyal) is welfare-decreasing whenever it tightens incentive constraints (so much so that monopoly may be welfare-superior to oligopoly). Interestingly, pure-strategy equilibria fail to exist whenever brand loyalty is sufficiently different across consumers types. Accordingly, price/quality dispersion ensues from the interplay between self-selection constraints and heterogeneity in brand loyalty. |
| Keywords: | Price dispersion,Preference correlation,Asymmetric information,Price discrimination,Competition |
| Date: | 2022–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03629496&r= |
| By: | Andrea Attar (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, CNRS - Centre National de la Recherche Scientifique); Thomas Mariotti (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, CNRS - Centre National de la Recherche Scientifique); François Salanié (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, PDG de l’Institut national de recherche pour l'agriculture, l'alimentation et l'environnement (INRAE)) |
| Abstract: | This article surveys recent attempts at characterizing competitive allocations under adverse selection when each informed agent can privately trade with several uninformed parties: that is, trade is nonexclusive. We rst show that requiring market outcomes to be robust to entry selects a unique candidate allocation, which involves cross-subsidies. We then study how to implement this allocation as the equilibrium outcome of a game in which the uninformed parties, acting as principals, compete by making oers to the informed agents. We show that equilibria typically fail to exist in competitive-screening games, in which these oers are simultaneous. We nally explore alternative extensive forms, and show that the candidate allocation can be implemented through a discriminatory ascending auction. These results yield sharp predictions for competitive nonexclusive markets. |
| Keywords: | Adverse Selection,Entry-Proofness,Discriminatory Pricing,Nonexclusive,Markets,Ascending Auctions |
| Date: | 2022–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03629592&r= |
| By: | Myśliwski, Mateusz (Norwegian School of Economics); Rostom, May (Bank of England) |
| Abstract: | We formulate a structural model of search with lender and borrower heterogeneity to estimate the value of information provided to UK households by mortgage brokers. Using administrative data on loans originating in 2016 and 2017, we document the existence of a substantial degree of unexplained price dispersion, and observe that while mortgages obtained from brokers are cheaper, borrowers who use intermediaries pay more once commissions are factored in. Assuming that borrowers with high search costs are more likely to use brokers, we nonparametrically estimate the distributions of search, and the banks’ costs of providing these loans. Our results show that search costs vary by demographic groups, and that broker presence exerts negative pressure on lenders’ market power. Compared to a world where broker advice is unavailable, we estimate their presence reduces average monthly mortgage costs by 21%, and welfare losses arising from search frictions by 70% – although the results differ by borrower and loan charateristics. We also find that regulation in support of market centralization halves lenders’ markups and lowers monthly costs of an average mortgage by 4.4%. |
| Keywords: | Mortgage markets; consumer search; intermediation; auction estimation |
| JEL: | C57 D83 G21 L85 |
| Date: | 2022–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0967&r= |
| By: | Rabbani, Maysam |
| Abstract: | In 2010, the Federal Trade Commission (FTC) stated that mergers between incumbents and future rivals may be anticompetitive. Lacking evidence, however, this statement was never used in litigation. This study empirically examines the statement. In 2012, an incumbent pharmaceutical firm acquired a promising future rival that was expected to enter competition within two years. First, I find strong evidence that, immediately after the merger, the incumbent boosted its existing drug prices. Second, the merger indirectly boosted the incumbent’s quantity of sales: higher drug prices increased the marginal returns on advertisement, and realizing that, the incumbent amplified its advertisement expenditures after the merger, and achieved a higher quantity of sales and market share. It explains how mergers with future rivals can increase market concentration by influencing advertisement. Third, mergers with future rivals can create strong entry barriers: by identifying and acquiring promising future rivals, incumbents can maintain their market dominance and postpone competition indefinitely. While mergers with future rivals are endemic to the pharmaceutical industry, I introduce a variation of it that explains the motive for major software industry mergers such as Facebook’s acquisition of Instagram and WhatsApp and Google’s takeover of Android and YouTube. Last, I propose an alternative merger analysis framework that suits mergers with future rivals. |
| Keywords: | pharmaceutical; entry barrier; merger; future rival; fringe firm |
| JEL: | I11 L41 L51 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:112864&r= |
| By: | Andrea Renda (EUI School of Transnational Governance); Rosa Castro (European Public Health Alliance); Guillermo Hernández (OECD) |
| Abstract: | This paper aims to support better-targeted and more homogeneous data collection and comparative analysis of regulatory oversight bodies (ROBs). To do so, it builds on relevant academic literature and available data to sharpen the definition of ROB used in OECD analytical work and policy discussions. It also discusses ROBs’ role within the regulatory governance cycle as well as various aspects related to regulatory oversight and co-ordination, with special attention to the overall institutional setting (including the relationships between various ROBs), context and objectives of regulatory reform, tasks and responsibilities, and associated accountability arrangements. |
| Keywords: | good regulatory practices, regulatory oversight, regulatory policy |
| JEL: | C18 D7 H11 K2 K00 |
| Date: | 2022–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaah:17-en&r= |
| By: | Marco Boccaccio (Università Sapienza di Roma - Dipartimento di Studi Giuridici, Filosofici ed Economici) |
| Abstract: | The crisis triggered by the Russian invasion of Ukraine stresses the problem of the dependence of most European countries from Russian gas supply. As a response to this situation, the European Commission on March, 8th 2022 adopted the EU power Communication pointing the lines of a possible reaction at European level to the crisis. The strategy is developed at three different levels. The first is devoted to emergency measures, mostly related to the problem of high prices; the second one is related to the problem of gas supply for the next winter; the third one is a long term goal, that of reducing the dependence from Russian gas at all. |
| Keywords: | war and economic crisis, energy, price regulation, state aid |
| JEL: | A F K K32 Q41 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:gfe:pfrp00:00053&r= |
| By: | Falk Bräuning; José Fillat; Gustavo Joaquim |
| Abstract: | The US economy is at least 50 percent more concentrated today than it was in 2005. In this paper, we estimate the effect of this increase on the pass-through of cost shocks into prices. Our estimates imply that the pass-through becomes about 25 percentage points greater when there is an increase in concentration similar to the one observed since the beginning of this century. The resulting above-trend price growth lasts for about four quarters. Our findings suggest that the increase in industry concentration over the past two decades could be amplifying the inflationary pressure from current supply-chain disruptions and a tight labor market. |
| Keywords: | inflation; supply shock identification; cost-price pass-through; industry concentration |
| JEL: | E30 E31 L11 L16 |
| Date: | 2022–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbcq:94265&r= |
| By: | Dana Foarta; Massimo Morelli |
| Abstract: | Many recent reform episodes have led to increased policy complexity: laws and regulations that contain more contingencies, exemptions, and carry high bureaucratic implementation costs. Such complexity may be desirable if it better satisfies the needs of diverse political constituencies. It may be inefficient if it is a byproduct of a changing power balance in the reform process itself. This paper uses a formal model to disentangle these two cases and understand how increased bureaucratic participation in the reform process may create inefficient complexity. When policymaking requires more expertise, better informed bureaucrats may draft complex policies to pander to persuade their less informed political principals. We show that this type of inefficient complexity is the equilibrium outcome when politicians are uncertain about the bureaucracy's reform implementation capacity. Institutional changes that give more power to politicians relative to bureaucrats do not reduce inefficient complexity, and they cannot substitute the need for more bureaucratic capacity. |
| Keywords: | Bureaucratic Capacity, Complex Reforms, Delegated Policymaking |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp22180&r= |
| By: | Carsten Hefeker (University of Siegen) |
| Abstract: | The paper analyzes under what circumstances policymakers experiment with policies with uncertain outcomes, when they prefer to imitate policies initiated in other countries, and when they prefer to coordinate policies internationally. Policymakers have private costs of active policies and compete internationally in a yardstick competition which gives rise to a potential distortion between what citizens want and what policymakers do. I find that policymakers’ policies as well as regime choice deviate from what citizens want but that an increase in uncertainty about policy outcomes decreases this distortion. |
| Keywords: | Uncertainty, policy competition and coordination, yardstick competition. |
| JEL: | D78 F42 F59 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202218&r= |
| By: | Jackie M.L. Chan; Michael Irlacher; Michael Koch |
| Abstract: | This paper investigates the effects of mergers on the product mix of multiproduct firms. Thus, we open the black box of post-merger efficiency improvements to reveal a new margin of adjustment along the product dimension. We analyze horizontal mergers in a theoretical model where oligopolistic firms employ a flexible manufacturing technology and allocate assets between differentiated varieties. After a merger, acquirers drop products from their consolidated domestic product portfolio and reallocate assets towards core varieties. We further demonstrate that such merger-induced efficiency gains imply greater activity in foreign markets. Using detailed Danish register data, we document novel facts regarding mergers and multiproduct firms and find empirical evidence strongly supporting the model’s predictions. Our results show that the number of domestic products of the post-merger acquirer falls relative to the sum of the premerger acquirer and target, that skewness of domestic sales rises towards core products, and that export activity increases. |
| Keywords: | multiproduct firms, horizontal mergers, flexible manufacturing, exports, product mix, event study |
| JEL: | F12 F14 G34 L22 L25 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9722&r= |
| By: | Curott, Nicholas A.; Snow, Nicholas A. |
| Abstract: | In this paper we argue that Irving Fisher (1867-1947) is an unacknowledged pioneer of modern behavioral economics. Fisher’s behavioralist orientation is evident in his writings on alcohol prohibition. In these works, Fisher argued that behavioral anomalies prevent individuals from making rational choices regarding alcohol consumption. Fisher thought these anomalies arose from three sources: 1) incomplete information; 2) limited cognitive abilities; and 3) lack of will power. These are essentially the same barriers to rational choice identified by modern day New Paternalists. Therefore, we argue that Fisher’s work on Prohibition was a pioneering academic achievement that anticipated recent developments in economics, and not an unscientific diatribe, as previous commentators have presumed. Unlike modern day ‘New Paternalists,’ however, Fisher rejected minor alterations to the choice architecture and advocated outright prohibition instead. This helps to illustrate a potential slippery slope problem with modern new paternalist arguments that should be addressed. |
| Date: | 2022–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:dv97k&r= |