Author: Rajeev K. TyagiPublisher:
ISBN:
Category :
Languages : en
Pages : 334
Book Description
Three Essays on Interactions Between Vertically Related Firms
Author: Rajeev K. TyagiThree Essays on Vertical Organization and Firm Strategy
Author: Octavio Jose Martinez ArguelloPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Essays on Vertical Restraints and Competition Policy
Author: Chia-Wen ChenPublisher:
ISBN: 9781124906683
Category :
Languages : en
Pages :
Book Description
Vertical restraints between firms, such as exclusive dealing contracts that forbid a dealer from promoting other manufacturers' products, are controversial in competition policy because of their potential anticompetitive effects. This dissertation addresses three issues in competition policy and vertical relationships between firms: (1) what are the effects of exclusive dealing on competitiveness of brands? (2) does exclusive dealing foreclose new entrants out of a market? (3) what is the effect of retail competition on market price in a vertically integrated industry when upstream firms face capacity constraints? Chapter 1 examines the impact of allowing more brands access to exclusive distribution networks on brand and market level outcomes. In the U.S., Anheuser Busch is the dominant firm in the beer industry and has exclusive dealing arrangements with many of its distributors. I looked at a recent beer distribution deal between Anheuser Busch and InBev that moved InBev brands into Anheuser Busch distribution networks. I collected beer distributor data before and after the event and matched them with a panel scanner dataset from a major grocery chain in Northern California. Using a difference-in-differences approach, I compared the changes in InBev market shares in markets in which InBev switched to Anheuser Busch distributors, to the changes in market shares in markets in which InBev switched to Anheuser Busch exclusive distributors. The results suggest that exclusive dealing matters in the beer industry: I find InBev market shares to be higher once allowed access to Anheuser Busch exclusive distribution networks. In addition, I do not find overall market quantity to be larger when more brands have access to Anheuser Busch exclusive networks. Instead, the results show cannibalization effects on existing brands' market share when a distributor acquires more brands. These results are more consistent with an incentive-based explanation for firms preferring exclusive contracts. Chapter 2 examines the effect of exclusive dealing on rival firms' entry decisions. I estimated an entry model of specialty beer producers in Northern California and tested whether exclusive dealing raises a firm's fixed costs. I modeled each firm's entry decision as a static entry game of incomplete information that allows for strategic interactions and employed a new panel scanner dataset from a major grocery chain in Northern California. Given that both firm and location profitability are heterogeneous, I controlled for post-entry demand conditions by estimating the demand for beer using a discrete choice model. Using the demand estimates and the predicted entry probabilities, I recovered a firm's fixed costs using a two-step estimator. I find some spillover effects on specialty beer producers' entry decisions. After taking strategic interactions into account, the results indicate that a firm has higher fixed costs at locations with exclusive distributors. The estimates also show that a firm is less likely to enter a location that is farther from its brewery, has lower expected demand or is smaller in store size. Finally, I implemented counter-factual experiments to study the effect of banning exclusive dealing. The results show that the welfare improvement associated with banning exclusive contracts is very small. Chapter 3 (joint with Christopher R. Knittel) considers a model of oligopolistic competition when upstream firms face capacity constraints. We studied the optimality conditions of upstream firms under vertical separation and vertical integration when firms compete on quantity. We illustrated the properties of the equilibrium wholesale and retail prices when the downstream market becomes less competitive with a numerical example. Using data on gasoline demand and refineries' capacity levels in California, we generated equilibrium wholesale and retail prices when the number of downstream firms varies. We find that whether a higher degree of retail market concentration results in higher retail price depends on market structure and the effectiveness of the capacity constraints. When independent refineries' capacity constraints are binding, the effect of a decrease in the number of independent retailers on retail gasoline price is very small.
Strategic Vertical Interactions Between Firms
Author: Giuseppe ColangeloThree Essays on the Economics of International Firms
Author: Maxwell TuuliPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
"This thesis contains three distinct chapters that seek to address topics related to international trade and the organizational structure adopted by international firms. The first essay investigates the role of uncertainty in the choice of organizational structure adopted by a firm. Specifically, we study the decision to either vertically integrate or outsource production of intermediate inputs. We propose a model of incomplete contracting and unequal bargaining à la Antràs and Helpman (2004), where we incorporate demand uncertainty by assuming that firms do not know the industry demand they face before making production decisions. We find that, in the presence of demand uncertainty, firms engage more in vertical integration compared to when they know the industry demand with certainty. We also find in the theoretical model that, under uncertainty, vertical integration tendency is less strong in more capital-intensive industries. We empirically test the predictions of the model by using industry-level data from the manufacturing sector in the US and find results consistent with the implications of the model. Re-shoring, the practice of bringing manufacturing and services back to the U.S. from overseas, has become a noticeable phenomenon of some US firms especially in the past decade. In the second essay we explore the reason for this observed pattern in the US. We develop a simple theoretical model that incorporates several elements of incomplete contracts and unequal bargaining power between upstream and downstream firms. We show in this paper that an increase in bargaining power of Northern firms relative to that of their Southern contractors can trigger re-shoring if the North-South wage differential is moderate, but increases offshoring if the wage differential is very high. The third essay explores the relationship between outsourcing and the export status of firms using data from over 30 emerging and developing countries in Europe. We first develop a theoretical model that links outsourcing to the decision by firms to exportfinal output. Participating in outsourcing leads to an increase in total efficiency level of firms, which is important for export market participation. Our empirical analyses reveal that firms that engage in outsourcing are more likely to export their final output. We also find that, these firms export a higher proportion of their final output compared to firms that do not engage in outsourcing." --
Technology, Information and Vertical Relationships
Author: Sarbajit SenguptaThree Essays on Successive Vertical Oligopolies
Author: Joon LimPublisher:
ISBN:
Category : Oligopolies
Languages : en
Pages : 254
Book Description
Essays on Strategic Interactions Between Firms in the Presence of Competition
Author: Parshuram Sambhajirao HotkarPublisher:
ISBN:
Category :
Languages : en
Pages : 426
Book Description
Strategic interactions between competing players of supply chains are studied in this dissertation in the context of supplier encroachment and forced information sharing. Although there has been extensive study of supplier encroachment, our study is the first to explicitly consider the possibility that a reseller sells more than one product, which occurs often in practice. In the first two essays, we develop a model of two suppliers who sell partially substitutable products through a single reseller, and allow for one of them to introduce its own direct channel. We find that the presence of the second supplier alters many of the existing results about the interactions between a reseller and an encroaching supplier. In the third essay, in the context of drug shortages, we investigate the role of information sharing between manufacturers about their supply disruptions. The quality problems and disruptions in capacity are the most prevalent cause of shortages of sterile injectable drugs. The capacity decision in the manufacturing facility has a significant impact on the availability of the drug, and thereby on the drug shortages. Therefore, we model the capacity decisions of manufacturing firms in terms of reliable and unreliable capacities, and study their impact on the supply of drugs. We quantify the benefit of the mitigation strategies such as forced information sharing and tax subsidies
Three Essays on Empirical Industrial Organization
Author: Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
In the first essay I offer a structural model of firm behavior that builds up on a neoclassical demand system, namely the Generalized Quadratic Almost Ideal Demand System, and an assumption of firms pursuing profit maximization. I contribute to the literature by relaxing several important restrictions on the consumer behavior that have been used widely in the past. With the important aspects of firm market conduct unobservable, the structural models of firm behavior heavily rely upon the assumption that consumer demand is correctly specified. Therefore, we show that oligopoly market studies overlooking these aspects of demand will likely result in wrong inferences and lead to misleading policy implications. In the second essay, I extend the standard random coefficient logit demand(S-RCL) that has been a workhorse model in the most recent Empirical IO literature. While the S-RCL relies on an ad-hoc linear functional form for the indirect utility function implying constant marginal utility of product attributes, I generalize this framework allowing for diminishing marginal utility and let the data determine the utility functional form. I then apply this framework to study vertical interactions between milk manufacturers and retailers in the U.S., and show that retailers have more market power under this generalized structure vis-à-vis the model using S-RCL demand. In the third essay I offer a new conceptual framework for studying the market performance of vertically aligned retail-manufacturing sectors. It revisits the benefit function approach to modeling demand, and extends its application to the empirical IO literature. I demonstrate the usefulness of the approach in a study of retail market behavior in the marketing of branded and private label yogurt.
Dissertation Abstracts International
Author: Publisher:
ISBN:
Category : Dissertations, Academic
Languages : en
Pages : 402
Book Description