Author: Shu-yi Tsai
Publisher:
ISBN:
Category : Competition, Imperfect
Languages : en
Pages : 178

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Author: Tor Jakob Klette
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Book Description

Author: Roy Harrod
Publisher: Springer
ISBN: 134901494X
Category : Business & Economics
Languages : en
Pages : 332

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Book Description

Author: Florin G. Maican
Publisher:
ISBN: 9789185169498
Category : Industries
Languages : en
Pages : 186

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Book Description

Author: Robert E. Kuenne
Publisher: New York : Wiley
ISBN:
Category : CHAMBERLIN, EDWARD,1899- . THE THEORY OF MONOPOLISTIC COMPETITION
Languages : en
Pages : 408

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Author: Ryo Sakamoto (Ph.D.)
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Book Description
One of the central questions in industrial organization is whether firms compete or collude in oligopolistic markets, given the significant implications of collusion for market outcomes and competition policy. An extensive body of literature has emerged, focusing on empirically analyzing the degree of collusion and measuring its impact on welfare. However, this task is challenging because observed higher prices may be attributed to various factors such as a high degree of collusion, increased product differentiation, or higher marginal costs-all of which are unobserved. In this dissertation, I propose a new structural model of demand and supply that enables the flexible estimation of firm conduct as continuous conduct parameters in differentiated products markets. A significant advantage of the framework is its empirical tractability, even when our focus is on the conduct of a large number of firms. This innovation is achieved through my unique setup of the supply-side modeling. Unlike the previous studies, I construct the supply side of the model using an oligopolistic model developed by d'Aspremont, Dos Santos Ferreira, and Gérard-Varet (2007). Their model captures competition among firms in two dimensions: one is competition for market share and the other is competition for market size. This dichotomous characterization reduces the number of conduct parameters, making the estimation feasible for a larger number of firms. Importantly, the model retains flexibility on the degree of competition from monopolistic competition to collusion. I apply the model to analyze the US corn seed industry using a proprietary dataset on farm-level transactions for genetically modified seeds. Despite concerns regarding the ramifications of the growing market power of large biotech firms, there is limited understanding of whether firms compete or collude in their pricing strategies. My estimation results show that the five largest firms are all engaged in imperfect collusion, and I reject benchmark conduct such as price and quantity competition. The low degree of competition translates into high price-cost margins, which I estimate at approximately 38%-51%. The results of counterfactual simulations indicate that seed companies extract substantial rent from farmers through non-competitive pricing, and total welfare loss is measured at $3.65 billion over the period 2008-2014.

Author: Hassan Afrouzi Khosroshahi
Publisher:
ISBN:
Category :
Languages : en
Pages : 394

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Book Description
This dissertation investigates three questions about pricing and information acquisition incentives of imperfectly competitive firms, and studies the macroeconomic implications of those incentives within general equilibrium models. Chapter 1 studies why in countries where inflation has been low and stable, price setters display highly dispersed aggregate inflation expectations; especially so when they face fewer competitors. In contrast to the predictions of standard models, realized inflation deviates significantly from price setters’ aggregate inflation expectations. Instead, their own-industry inflation expectations are more accurate, and aggregate inflation tracks these expectations closely. I propose a new dynamic model of rational inattention with oligopolistic competition to explain these stylized facts. The Phillips curve relates aggregate inflation to price setters’ own-industry inflation expectation, and firms forego learning about aggregate variables to focus on their own-industry prices. This incentive is stronger when every firm faces fewer competitors. Using new firm-level survey evidence, I calibrate the degree of rational inattention and industry size in the model and find that a two-fold increase in the number of competitors reduces the half-life and on-impact response of output to a monetary policy shock by 40 and 15 percent, respectively. Chapter 2 is about the behavior of the price-cost markups. The cyclicality of markups is crucial to understanding the propagation of shocks and the comovement of macroeconomic variables. I show that the degree of inertia in the response of output to shocks is a fundamental determining factor for the cyclicality of markups in a broad class of models. In particular, markups follow a forward looking law of motion in which they depend on firms’ conditional expectations over the net present value of all future changes in output. I test this law of motion with data for firms’ expectations and find that, across different types of microfounded models of cyclical markups, the behavior of firms is most consistent with implicit collusion models. Calibrating an implicit collusion model to the U.S. data, I find that markups are procyclical when the model matches the observed inertial response of output to shocks, as commonly found in the data. Chapter 3 studies the pricing behavior of rationally inattentive firms when they face persistent productivity shocks along with transitory demand shocks. I show that prices respond persistently to transitory demand shocks, as firms optimally choose to be confused about the two types of the shocks. When a positive transitory demand shock is realized, it takes time for firms to disentangle it from a supply shock, during which they act as if there was a negative aggregate productivity shock. Therefore, an expansion caused by a positive demand shock is followed by a recession until firms fully recognize the origin of the change in their optimal price. I also develop a tractable method for solving linear quadratic rational inattention models in continuous time and derive semi-analytical results for impulse response functions of endogenous variables under rational inattention.

Author: Lawrence Abbott
Publisher: Westport, Conn : Greenwood Press
ISBN:
Category : Business & Economics
Languages : en
Pages : 256

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Book Description

Author: Claudio A. Calcagno
Publisher:
ISBN:
Category : Competition
Languages : en
Pages :

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Book Description
This thesis in applied microeconomics explores different aspects of imperfect competition. All three chapters are motivated by recent developments in real-world economies. First, I explore the implications of a recent reform by the European Commission whereby victims of antitrust injury can seek stand-alone private damages (SPDs) directly before courts. I show that any gain in deterrence has to be traded off against costly litigation and enforcement costs, and that these tradeoffs are heterogeneous across market sizes. SPDs can improve welfare only if the competition authority is sufficiently effective: private damages are a complement to (good) public enforcement, not a substitute. Finally, in the case of a resource-constrained competition authority, whilst a "hands-off" approach might have been warranted absent SPDs, this is no longer true once stand-alone actions are introduced. Second, I investigate under what conditions exclusion can arise under collective behaviour, in a setting with an efficient downstream entrant. Tacitly collusive equilibria can be sustained either by jointly excluding the entrant or through entry-accommodating strategies. The latter class of equilibria entails vertically integrated incumbents collusively extracting the rent deriving from the entry of a more efficient downstream competitor. I show that, for intermediate discount factors, whenever the entrant is not too much more efficient than the incumbents, the integrated firms find exclusionary collusive equilibria more profitable than entryaccommodating collusive equilibria. Moreover, exclusionary collusive equilibria arise as a (profitable) outcome when the entrant's cost is uncertain (and equilibrium tariffs will be such that only very efficient entrants will be allowed in). The retail petrol market (the object of recent antitrust scrutiny) is then analysed as a useful setting to apply my framework. Third, in a paper with Bertsch and Le Quement, we study some possible implications of the bailout regimes witnessed in the aftermath of the recent financial crisis. Notwithstanding the well-known effects of State aid on moral hazard, governments setting up aid schemes to ailing banks (or firms more generally) may increase the likelihood of (tacit) collusion in industries characterised by idiosyncratic shocks. In particular, we show that, in a repeated-game setting, a systematic bailout regime increases the expected profits from cooperation and simultaneously raises the probability that competitors will still be in business to carry out punishment against cheaters. This is detrimental for welfare for intermediate discount factors or (for any discount factor) whenever the direct rescue costs are too large.

Author: Sydnee Christian Caldwell
Publisher:
ISBN:
Category :
Languages : en
Pages : 319

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Book Description
This thesis consists of three chapters on imperfect competition in the labor market. The first chapter (joint with Nikolaj Harmon) explores the relationship between an individual's wages and the quality of her opportunities at other firms (her outside options). To overcome the fact that many factors that shift an individual's outside opportunities also impact her productivity at her current job, we develop a novel identification strategy that generates within-individual (and within-firm-by-occupation) variation in workers' information about their outside options. This strategy, which we implement using linked employer-employee data from Denmark, exploits the fact that individuals often learn about labor market opportunities through their social networks. We find that increases in labor demand at former coworkers' current firms increases an incumbent worker's job-to-job mobility and wage growth. Consistent with theory, larger changes are necessary to induce a job-to-job transition than to induce a wage gain. Tests that exploit within-firm or within-firm-and-occupation variation and tests that exploit different subsets of an individual's former coworkers confirm that the results are not driven by unobserved changes in demand for workers' skills. Finally, we use our reduced form moments to identify a structural search model incorporating both posting and bargaining firms. We find that bargaining is more prevalent among high skilled workers. The second chapter (joint with Oren Danieli) investigates the role that cross-sectional differences in individuals' outside options play in generating between-group wage inequality. We use a two-sided matching model to micro-found a measure of workers' outside options, which we call the "Outside Options Index" (001). The index is similar to those used in the industrial organization literature to measure concentration (e.g. the Herfindal-Hirschman Index, the HHI). We then use German administrative data to estimate this index and use two sources of quasi-random variation: (1) the introduction of high-speed trains and (2) a standard shift-share instrument to identify the elasticity between our index and wages. When we combine these two ingredients, we find that roughly 1/3 of the gender wage gap in Germany can be explained by differences in options, mostly the result of differences in effective labor market size (commuting costs). The third chapter (joint with Emily Oehlsen) asks whether, in the absence of commuting costs, firms with market power have an incentive to pay women less than men. We use data from a series of experiments at Uber where we offered random subsets of male and female drivers higher "wages". Drivers varied both in the size of the wage increase and in whether they could drive for Uber's main competitor, Lyft. These two sources of variation allow us to experimentally identify: (1) Frisch elasticities and (2) firm substitution elasticities. We find that women have Frisch elasticities double those of men on both the intensive and extensive margin. However, unlike the prior literature, we find that women are not less likely to shift between firms in response to changes in relative wages. The results suggest that, at least in the gig economy, firms have little incentive to wage discriminate between men and women based on their labor supply choices. JEL Codes: JOO, J31, J42