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on Industrial Competition |
| By: | Eugen Kovac |
| Abstract: | This paper analyzes tying and bundling as an entry deterrence tool. It shows that a multi-product firm can defend its monopoly position in one market via tying even when it does not have market power in another market. This is shown on a model with two complementary goods, each of which is vertically differentiated and in which consumers’ preferences for the goods are positively correlated. Some possible ways of defending against entry deterrence, and implications for competition policy, are discussed. |
| Keywords: | Industrial organization, vertical differentiation, anti-trust policy, entry deterrence, foreclosure, tying, bundling. |
| JEL: | L11 L12 L13 L41 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp266&r=com |
| By: | Germán Coloma |
| Abstract: | This paper develops an oligopoly model with firms that may potentially be public or private, and solves it for different cases in which the number and ownership of those firms vary. The results are then compared in terms of total surplus and consumer surplus, and this comparison produces implications for the antitrust appraisal of possible mergers and acquisitions. It follows that certain types of mergers are unambiguously favorable or unfavorable from the point of view of their contribution to both total and consumer surplus, while others may be convenient in one of those dimensions but inconvenient in the other dimension. |
| JEL: | D43 L33 L44 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:299&r=com |
| By: | Michele Boldrin; David K Levine |
| Date: | 2005–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:618897000000000954&r=com |
| By: | Galina Vereshchagina |
| Abstract: | Empirical studies document differences in firms' response to the introduction of various labor market policies. In particular, large and mature firms tend to participate more actively in targeted employment subsidy programs (under which firms receive subsidies for hiring disadvantaged workers). This paper offers an explanation for this phenomenon and argues that it might have important consequences for policy making. Namely, such behavior of firms may indicate that large and mature firms benefit from the introduction of a new subsidy program, while small and young firms incur indirect costs. In this case, the policy implicitly redistributes profit from young to mature firms and may discourage startups if the entry into the industry is competitive. The resulting decrease in the number of operating firms is likely to have a significant impact on the policy's outcomes. These effects become more pronounced as heterogeneity between young and mature firms increases. |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp268&r=com |