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Entry Regulations with Implementation Lag: Evidence from Convenience Store Markets in Korea Int. J. Ind. Organ. (IF 1.739) Pub Date : 2024-02-13 Seongmin Seo, Sang Soo Park
County in Korea attempted to advance the interests of incumbent businesses by weakening competition in the convenience store market. To this end, it created a regulation impeding the opening of new convenience stores. Although this regulation intensified proximity restrictions between stores, our findings reveal that the announcement of legislation condemned incumbent businesses to unfavorable survival
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The role of public external knowledge for firm innovativeness Int. J. Ind. Organ. (IF 1.739) Pub Date : 2024-02-10 María García-Vega, Óscar Vicente-Chirivella
Public research organizations (PROs) and universities receive large amounts of public funding for the generation and transmission of knowledge, and companies contract external knowledge from both. An important question for the management of a firm's R&D and for public innovation policies is: What is more beneficial for the generation of firm innovations, external knowledge created by PROs or by universities
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The effects of franchising on stores, competitors, and consumers Int. J. Ind. Organ. (IF 1.739) Pub Date : 2024-01-26 Jeff Ackermann
Following a corporate acquisition, a casual dining chain sold all of its company-owned stores to franchisees. I exploit this change in franchise status to estimate the effects of franchising. I use a utility-based choice model to predict alcohol sales for all liquor-selling bars and restaurants in Texas over a 10-year period. Using this model, I find that franchising a restaurant increases its revenues
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Bridging the digital divide in the US Int. J. Ind. Organ. (IF 1.739) Pub Date : 2024-01-20 Augusto Espín, Christian Rojas
The internet plays a vital role in everyday life across the world. The US, however, has seen a slowdown in household broadband adoption since 2010, creating a gap between connected and unconnected households usually referred to as the “digital divide.” While prior studies have documented how the digital divide is related to income, demographics, and geographic location, this paper takes a different
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Innovation incentives in technical standards Int. J. Ind. Organ. (IF 1.739) Pub Date : 2024-01-11 Gastón Llanes
I study the incentives to develop complementary technologies and include them in a technical standard. I find that the standardization process may lead to insufficient or excessive innovation. Patent pools increase innovation incentives, while price caps may increase or decrease them. Although both policies increase user surplus and welfare, price caps dominate (are dominated by) patent pools if the
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The behavioral additionality of government research grants Int. J. Ind. Organ. (IF 1.739) Pub Date : 2024-01-02 Rainer Widmann
There are different forms of public support for industrial R&D. Some attempt to increase innovation by prompting firms to undertake more challenging projects than they otherwise would. Access to a dataset from one such program, the Austrian Research Promotion Agency, allows me to examine the effect of research grants on firms' patenting outcomes. My estimates suggest that a government research grant
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Do patents enable disclosure? Evidence from the invention secrecy act Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-12-20 Gaétan de Rassenfosse, Gabriele Pellegrino, Emilio Raiteri
This paper provides empirical evidence suggesting that patents may facilitate knowledge disclosure. The analysis exploits the Invention Secrecy Act, which grants the U.S. Commissioner for Patents the right to prevent the disclosure of new inventions that represent a threat to national security. Using a two-level matching approach, we document a negative and large relationship between the enforcement
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Demand forecasting, signal precision, and collusion with hidden actions Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-12-16 Simon Martin, Alexander Rasch
We analyze how higher demand-forecasting precision affects firms' chances of sustaining supracompetitive profits, depending on whether actions are observable or hidden. We identify a dual role of improving forecasting ability for situations in which actions are hidden. Improved forecasting ability increases the temptation for firms to deviate, reducing profits; at the same time, such ability reduces
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Wind power expansion and regional allocative efficiency among fossil-fuel electricity generators Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-11-20 Yin Chu, Juanxia Gao, Haoyang Li
Integrating wind power demands more generation fleet flexibility and incurs more incidences of transmission congestion, which may impose a negative effect on how efficiently regional production is allocated among fossil fuel electricity generators (we call it “regional allocative efficiency”). Exploring exogenous variations in wind power generation conditional on wind turbine capacity, we analyze wind-induced
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Identification of interdependent values in sequential first-price auctions Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-11-15 Daniel Bougt, Gagan Ghosh, Heng Liu
We revisit the (non-)identification of affiliated interdependent-value auctions from the perspective of sequential auctions introduced by Milgrom and Weber (2000). In contrast to static auctions, prices in early rounds affect bidding in later rounds in sequential auctions, generating enough variation for testing interdependent against private values and model identification. We develop nonparametric
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Single monopoly profits, vertical mergers, and downstream foreclosure Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-10-23 Matthias Hunold, Jannika Schad
We review the Chicago school's single monopoly profit theory whereby an upstream monopolist cannot increase its profits through vertical integration as it anyway has sufficient market power. In our model the dominant supplier has full bargaining power, uses observable two-part tariffs, and is only constrained by a less efficient source (such as in-house production). We show that, by vertically integrating
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Umbrella pricing and cartel size Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-10-25 Stefan Napel, Dominik Welter
It is generally assumed that bigger scale and scope of private antitrust enforcement promotes effective competition. This has motivated several North American and European courts to uphold redress claims not only from clients of a detected cartel but also plaintiffs who were exposed to ‘umbrella pricing’, i.e. equilibrium price increases by non-colluding competitors. The paper shows that the presumed
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Empirical analysis of network effects in nonlinear pricing data Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-09-29 Liang Chen, Yao Luo
Network effects, i.e., an agent's utility may depend on other agents' choices, appear in many contracting situations. Empirically assessing them faces two challenges: an endogeneity problem in contract choice and a reflection problem in network effects. This paper proposes a nonparametric approach to tackle both challenges by exploiting restriction conditions from both demand and supply sides. We illustrate
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Let's lock them in: Collusion under consumer switching costs Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-09-19 Niklas Fourberg
Consumer switching costs reduce the price elasticity of existing customers while increasing competition for new ones, creating an “invest-and-harvest” incentive for firms. This paper examines the effect of this dual pricing incentive on firm behavior in a laboratory experiment both with and without switching costs and the ability to communicate. I find that switching costs reduce the price level for
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Deceptive advertising, regulation and naive consumers Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-09-11 Aastha Gupta
In markets where buyers have incomplete information about product quality, consumer sophistication strengthens the case for stronger regulation of deceptive advertising by firms. In a model where a fraction of buyers are naive (i.e., cannot update beliefs based on market signals and believe all advertising claims) and they stand to gain from receiving reliable information about product quality, I show
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Bank-platform competition in the credit market Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-09-15 Sara Biancini, Marianne Verdier
We analyze the equilibrium in the credit market when a bank and a lending platform compete to offer credit to borrowers. The platform does not manage deposit accounts, but acts as an intermediary between the borrower and investor, offering a risky contract such that the investor is only reimbursed if the borrower is successful. We show that the platform business model of financial intermediation may
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Labor Market Power and Between-Firm Wage (In)Equality Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-09-09 Matthias Mertens
I study how labor market power affects firm wage differences using German manufacturing sector firm-level data (1995-2016). In past decades, labor market power increasingly moderated rising between-firm wage differences. This is because high-paying firms possess high and increasing labor market power and pay wages below competitive levels, whereas low-wage firms pay competitive or even above competitive
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Supply Chain Disruptions and Sourcing Strategies Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-07-31 Julia Cajal-Grossi, Davide Del Prete, Rocco Macchiavello
Supply chain disruptions have recently been at the center of both academic and policy debates. After reviewing some of the emerging literature on supply chain disruptions, we discuss the role of buyers' sourcing strategies in mediating responses to such shocks. We focus on two dimensions of a buyer's sourcing strategy: relationality (the extent to which the buyer concentrates its sourcing in a few
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Cournot platform competition with mixed-homing Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-07-17 Mark J. Tremblay, Takanori Adachi, Susumu Sato
Competition in quantity dates back to Cournot (1838) for traditional markets and Katz and Shapiro (1985) for markets with direct network effects. In this paper, we consider Cournot platform competition in two-sided markets with indirect network effects while allowing for single-, multi-, and mixed-homing allocations. We find that the markup and markdown terms that are typically found in monopoly two-sided
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Multi-product firm price and variety response to firm-specific cost shocks Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-07-13
A large literature studies how prices respond to changes in market conditions. More recent work examines firm adjustments along the product quality and variety channels. We present a theoretical model of heterogeneous, multi-product firms to characterize the response of firms to idiosyncratic cost shocks along the price and variety channels. The model delivers rich implications and interesting trade-offs
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Reprint of: Platform competition in the tablet PC market: The effect of application quality Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-07-13
The tablet PC market is dominated by two platforms: iOS and Android. In this paper, we combine tablet-level data with data on the quality of the top 1000 mobile applications from these platforms and estimate a structural demand model. We exploit variations over three periods and five European countries to find whether the application quality affects tablet demand. We then run two counterfactuals. The
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Pass-through and Tax Incidence in Differentiated Product Markets Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-07-09 Eugenio J. Miravete, Katja Seim, Jeff Thurk
The role of demand curvature in determining firm behavior in symmetric oligopolistic product markets is well-understood. We consider the empirically relevant discrete choice differentiated product demand and point to two forces that drive curvature in logit demand: the impact of outside-good spending on the consumer’s indirect utility and the heterogeneity in this response across consumers. We use
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Price and Quantity Discovery without Commitment Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-07-06 Stefan Bergheimer, Estelle Cantillon, Mar Reguant
Wholesale electricity markets solve a complex allocation problem: electricity is not storable, demand is uncertain, and production involves dynamic cost considerations and indivisibilities. The New Zealand wholesale electricity market attempts to solve this complex allocation problem by using an indicative price and quantity discovery mechanism that ends at dispatch. Can such a market mechanism without
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Regulating Online Search in the EU: From the Android Case to the Digital Markets Act and Digital Services Act. Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-07-06 Francesco Decarolis, Muxin Li
This paper offers an analysis of the impacts of public regulations of internet search. Through a theoretical model, we consider three regulations adopted by the EU. The first is the Android choice screen implemented in the European Economic Area in 2020. The other two are the recently adopted Digital Markets Act (DMA) and Digital Services Act (DSA). We find that interventions involving user choice
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Cheap Exclusion in Markets with Multiple Complements Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-06-28 Daniel P. O’Brien, Mark Israel, Erica Benton
We extend the theory of exclusive dealing in first-mover environments to settings where the incumbent seller’s product is used with multiple complements in a distribution chain and the incumbent can sign exclusive dealing contracts with more than one of them. The model is motivated by the market for biosimilar pharmaceuticals, where incumbent sellers that face a threat of entry can sign exclusionary
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Algorithmic Collusion: Genuine or Spurious? Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-06-25 Emilio Calvano, Giacomo Calzolari, Vincenzo Denicol, Sergio Pastorello
Reinforcement-learning pricing algorithms sometimes converge to supra-competitive prices even in markets where collusion is impossible by design, or cannot be an equilibrium outcome. We analyze when such spurious collusion may arise, and when instead the algorithms learn genuinely collusive strategies, focusing on the role of the rate and mode of exploration.
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Barriers to real-time electricity pricing: Evidence from New Zealand Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-06-28 Charles Pébereau, Kevin Remmy
This paper studies the introduction of real-time electricity pricing in the New Zealand residential retail market to understand why its market share remained below 1.25%. We use rich panel data of all retail switches between 2014 and 2018 and an unexpected wholesale price spike to study adoption and attrition. Exploiting the staggered roll-out of real-time pricing in different locations we find that
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Competition and product composition: Evidence from hollywood Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-06-27 Joseph Kuehn, Ryan Lampe
We examine how competition affects the number and composition of product offerings. The question is addressed using the example of the U.S. motion picture industry, which has experienced declining attendance in the past decade due to competition from streaming services and smart phone applications. Using data on 1486 releases between 2009 and 2018, we estimate a structural model of endogenous product
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The home bias in procurement. Cross-border procurement of medical supplies during the Covid-19 pandemic. Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-06-23 Philip Hanspach
Public procurement markets are often national a general agreement national preferencing. I exploit shocks occurring during the Covid-19 pandemic to two important factors, crisis urgency, measured through local infection rates, and increased buyer discretion, to study home bias in public procurement. Two causal difference-in-difference analyses on novel data for medical supplies in Europe show that
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Consequences of model choice in predicting horizontal merger effects Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-06-20 Matthew T. Panhans, Charles Taragin
How practitioners model competition influences the predicted effects of a merger. We show how a Bertrand price setting and a second score auction model can be nested within a general bargaining framework. Through numerical simulations, we then show how the predicted merger effects vary with model choice, and that two commonly used strategies for obtaining demand parameters can yield markedly different
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Self-preferencing and foreclosure in digital markets: theories of harm for abuse cases Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-06-15 Massimo Motta
Antitrust agencies all over the world have been investigating large digital platforms for practices which may constitute an abuse of dominance. Here I discuss practices (including ‘self-preferencing’ and denial or degradation of interoperability) which can be interpreted as foreclosure in vertically-related or complementary markets. I discuss, in particular, a few high-profile cases involving Amazon
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Patent hold-out and licensing frictions: Evidence from litigation of standard essential patents Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-06-12 Brian J. Love, Christian Helmers
The theory of patent “hold-out” posits that frictions in the market for licensing standard-essential patents (SEPs) provide incentives for prospective licensees to opportunistically delay taking licenses with the goal of avoiding or reducing royalty payments. We construct measures of pre- and in-litigation hold-out from information disclosed in U.S. cases filed 2010–2019. Relying on both SEP and a
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Overlapping ownership and product innovation Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-06-09 Rune Stenbacka, Geert Van Moer
We characterize the effect of overlapping ownership (OO) on investments in drastic product innovation. The success probability of innovation increases with investment. We analyse two opposing forces: (1) OO induces firms to internalize that success on their own behalf erodes the rivals’ business, reducing investments; (2) OO softens competition in the product market, enhancing investments. Our analysis
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A price leadership model for merger analysis Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-06-02 Ryan Mansley, Nathan H. Miller, Gloria Sheu, Matthew C. Weinberg
We provide a methodology to simulate the coordinated effects of a proposed merger using data commonly available to antitrust authorities. The model follows the price leadership structure in Miller, Sheu, and Weinberg (2021) in an environment with logit or nested logit demand. The model calibration leverages profit margin data to separately identify the extent of coordinated pricing from marginal costs
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Switching costs in the US seed industry: Technology adoption and welfare impacts Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-05-27 Jinjing Luo, GianCarlo Moschini, Edward D. Perry
We evaluate the role of brand and technology switching costs in the US soybean seed industry using a unique dataset of actual seed purchases by about 28,000 farmers from 1996 to 2016. Using a random coefficients logit model of demand, we estimate brand and technology switching costs, characterize the distributions of buyers’ willingness to pay for seed brands and the glyphosate tolerance (GT) trait
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When can auctions maximize post-auction welfare? Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-05-21 Bernhard Kasberger
I study auctions in which firms bid for licenses that reduce their marginal costs in a post-auction downstream market. When there are three or more firms, I show that the Vickrey–Clarke–Groves (VCG) auction maximizes consumer surplus in dominant strategies if and only if it maximizes producer surplus in dominant strategies. With two firms, the effect on consumer surplus is ambiguous. When the VCG auction
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Telemedicine competition, pricing, and technology adoption: Evidence from talk therapists Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-05-15 Daniel Goetz
This paper examines how new telemedicine competitors affected incumbent health care providers during the first waves of COVID-19. Using data from the largest mental health provider search platform in Canada, I show that increased telemedicine competition in a market caused incumbent providers in that market to stop offering income-based discounts to patients. I isolate the causal effect of competition
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Buyer Power and Exclusion: A Progress Report Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-05-14 Claire Chambolle, Clémence Christin, Hugo Molina
This article presents recent advances in the analysis of buyer-seller networks, with a particular focus on the role of buyer power on exclusion. We first examine simple vertical structures and highlight that either upstream or downstream firms may have incentives to engage in exclusionary practices to either counteract or leverage buyer power. We then review current work attempting to revisit this
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Unobserved heterogeneity and adjustment to behavioral bias: The case of used cars Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-05-13 Michael Weichselbaumer
With novel data on ex-post quality after used-car purchases, I evaluate left-digit bias, a type of inattention bias, for underlying quality of used cars. My main result is that the used-car market exhibits a quality discontinuity in parallel to a price discontinuity at 10,000 multiples of mileage. I discuss explanations for how quality adjusts to the price discontinuity. The explanations differentiate
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Outsourcing horizontally differentiated tasks under asymmetric information Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-05-13 Christophe Bernard, Sébastien Mitraille
We explore how asymmetric information affects task assignment between a manufacturer and its supplier when tasks are horizontally differentiated, and when the comparative advantage in terms of marginal costs differs during the production process. We show that the manufacturer over-outsources to a generalist supplier and under-outsources to a specialist supplier depending on its level of efficiency
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Market dynamics and investment in the electricity sector Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-05-04 Joseph A. Cullen, Stanley S. Reynolds
A transition to a low carbon future will include a medium-to-long run period in which intermittent renewables co-exist with conventional fossil fuel electricity generators. Fossil fuel generators have frequent startups and shut-downs during the transition. A dynamic competition model is developed that allows for costly cycling of conventional generators. We analyze long run effects of renewable subsidies
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Partial Secrecy in Vertical Contracting Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-04-24 Jihwan Do, Jeanine Miklós-Thal
This paper introduces a notion of partial secrecy in bilateral contracting games between one upstream firm and several competing downstream firms. The supplier’s offer quantities are subject to trembles, and each downstream firm observes a noisy signal about the offer received by its competitor before deciding whether to accept its offer. A downstream firm’s belief about its competitor’s quantity is
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Evaluating the impact of divestitures on competition: Evidence from Alberta’s wholesale electricity market Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-04-13 David P. Brown, Andrew Eckert, Blake Shaffer
Asset divestitures play a central role in antitrust and competition policy. Despite their importance, empirical evidence on their impacts on market competition is limited. We analyze market power in Alberta’s wholesale electricity market, where transitional arrangements that virtually divested generation assets from large incumbents were put in place during market restructuring in the early 2000’s
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Flagging cartel participants with deep learning based on convolutional neural networks Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-04-05 Martin Huber, David Imhof
Adding to the literature on the data-driven detection of bid-rigging cartels, we propose a novel approach based on deep learning (a subfield of artificial intelligence) that flags cartel participants based on their pairwise bidding interactions with other firms. More concisely, we combine a so-called convolutional neural network for image recognition with graphs that in a pairwise manner plot the normalized
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Comparing procedures for estimating random coefficient logit demand models with a special focus on obtaining global optima Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-04-02 László Pál, Zsolt Sándor
We compare several nested fixed point and optimization procedures for computing the estimator of the widely-used empirical market demand model developed by Berry et al. (1995). It is well-known that the optimization may often lead to multiple local optima, which, if ignored, can lead to erroneous policy conclusions. By combining the frequencies of finding the global minima and the computing times,
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Policy orientations and technology choices in standards wars Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-03-30 Xiao Fu, Guofu Tan, Jin Wang
Standard-setting organizations (SSOs) exhibit a variety of policy orientations toward the conflicting interests of technology developers and adopters. In this paper, we analyze a model that incorporates the technology choices of SSOs in standards wars and royalty determinations made by the developers of essential technologies. We show that both policy orientations toward developers relative to adopters
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Product Innovation with Vertical Differentiation: Is a Monopolist's Incentive Weaker? Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-03-25 Serge Moresi, Marius Schwartz
Extant literature shows that Arrow's famous result—a secure monopolist gains less from a nondrastic process innovation than would a competitive firm—does not always extend to nondrastic product innovations. If the new product is horizontally differentiated, the monopolist can have a greater incentive to add the new product than a firm that would face competition from the old product; but the monopolist's
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Private Labels in Marketplaces Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-03-17 Radostina Shopova
Regulators are concerned that by introducing their own private labels, dominant online marketplace operators distort competition in their own favor. This paper addresses this concern by studying how online marketplaces differ from classic retailers with a wholesale arrangement. In online marketplaces individual sellers set their own consumer prices, while the marketplace operator collects fees from
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Strategic behaviour by wind generators: an empirical investigation Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-03-16 Mario Intini, Michael Waterson
Renewable generation of electricity is a vital step in reducing dependence on fossil fuels, and wind generation is particularly important in countries such as Britain. A large part of the windfarms are in Scotland but links with England are relatively limited and subject to exogenous failure of an interconnector. As a consequence, for a significant portion of time the system operator imposes constraints
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Demand for in-app purchases in mobile apps—A difference-in-difference approach Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-03-17 Andreea Enache, Richard Friberg, Magnus Wiklander
Using five “freemium” mobile app games on six European markets we examine the effect of price changes on conversion rate, number of users and viewing of rewarded videos. Our difference-in-difference estimation relies on games being available on both the Apple and Google platforms with price changes on only one platform. Our main identification comes from exogenous adjustments of Apples prices in 2021
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Bank regulation and market structure Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-03-03 Carsten Krabbe Nielsen, Gerd Weinrich
In our model, banks, heterogeneous in terms of entry costs, compete à la Salop for depositors on the unit circle. When capital requirements, intended to prevent risk shifting, are increased, the resulting costs are passed on to depositors in the form of reduced deposit rates or quality of service. This may induce depositors to migrate to unregulated shadow banks, the consequence being a change in the
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Mergers of Complements: On the Absence of Consumer Benefits Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-02-24 Alessandro S. Kadner-Graziano
Mergers of complements are widely thought to decrease prices and thereby benefit consumers. Benefits materialise when the merging parties are monopolists but not when they face perfect competition. What about all cases between those competitive extremes? I model a vertically related industry where every supplier may face competition. I show that, for general demand functions, pre-merger margins can
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Mergers with future rivals can boost prices, bar entry, and intensify market concentration Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-02-24 Maysam Rabbani
It is theoretically shown that mergers between incumbents and future rivals can boost prices and harm consumers. But in the absence of empirical evidence, no merger has been litigated on this basis. To offer empirical insights, I study the acquisition case of a promising future rival by a large incumbent pharmaceutical firm. First, there is strong and causal evidence that the merger has enabled higher
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Platform competition in the tablet PC market: The effect of application quality Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-02-19 Thanh Doan, Fabio M. Manenti, Franco Mariuzzo
The tablet PC market is dominated by two platforms: iOS and Android. In this paper, we combine tablet-level data with data on the quality of the top 1000 mobile applications from these platforms and estimate a structural demand model. We exploit variations over three periods and five European countries to find whether the application quality affects tablet demand. We then run two counterfactuals. The
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Search algorithm, repetitive information, and sales on online platforms Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-02-15 Yangguang Huang, Yu Xie
A prominent feature of online sales is that buyers rely on the search tools offered by platforms to process information when searching for products. We develop a model that captures how the search algorithm affects buyers’ search processes, which further influences market equilibrium and welfare. If a platform adopts a highly unequal search algorithm, buyers are likely to obtain repetitive information
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Who are you? Cartel detection using unlabeled data Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-02-15 Douglas Silveira, Lucas B. de Moraes, Eduardo P.S. Fiuza, Daniel O. Cajueiro
We propose a data-driven machine learning approach to flag bid-rigging cartels in the Brazilian road maintenance sector. First, we apply a clustering algorithm to group the tenders based on their attributes. Second, we use the labels created by the clustering algorithm as a target variable to predict them using a classifier. We rank the screens according to their relevance to decrease the number of
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Cartel birth and death dynamics: empirical evidence Int. J. Ind. Organ. (IF 1.739) Pub Date : 2023-02-12 Tove Forsbacka, Chloé Le Coq, Catarina Marvão
This paper examines how a gradual tightening of antitrust enforcement impacts cartels’ births and deaths. To avoid the inherent sample selection bias in prosecuted cartel studies, we use a unique dataset of Swedish legal cartels registered between 1946 and 1993. We compare estimates from a count model (considering only registered cartels) and a Hidden Markov Model (allowing for potentially unregistered