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on Industrial Organization |
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Issue of 2008‒06‒07
three papers chosen by |
| By: | Pradeep Dubey und Dieter Sondermann |
| Abstract: | We show that if limit orders are required to vary smoothly, then strategic (Nash) equilibria of the double auction mechanism yield competitive (Walras) allocations. It is not necessary to have competitors on any side of any market: smooth trading is a substitute for price wars. In particular, Nash equilibria are Walrasian even in a bilateral monopoly. |
| Keywords: | Limit orders, double auction, Nash equilibria, Walras equilibria, mechanism design |
| JEL: | C72 D41 D44 D61 |
| URL: | http://d.repec.org/n?u=RePEc:bon:bonedp:bgse9_2008&r=ind |
| By: | Emilie Dargaud (GATE, University of Lyon, CNRS, ENS-LSH, Centre Léon Bérard, France) |
| Abstract: | In this paper, we study the impact of a merger on collusion depending on the endowment of capital asset among firms. We show that the merger makes the collusion easier to sustain when asymmetric capital stock combines with less efficient insiders because of more symmetric conditions and closer incentive constraints. Moreover, this model allows us to determine an optimal threshold of asymmetry among insiders and outsiders such as a merger has pro-competitive effects and we compare this value with the value which would restore perfect symmetry between firms after the merger. |
| Keywords: | leniency programs, merger, oligopoly supergame |
| JEL: | K42 L11 L41 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:0814&r=ind |
| By: | Giannetti, C. (Tilburg University, Center for Economic Research) |
| Abstract: | This work tests the predictions of Sutton?s model of independent submarkets for the Italian retail banking industry. In the first part of this paper, I develop a model of endogenous mergers to evidence the relationship between firms? conduct, market entry and market structure. In the second part, I identify the submarket dimension and estimate the relationship between market size and market structure using data on bank branches. The size of the submarkets turned out to be at most provincial whereas the limiting concentration index - as argued by Sutton for industries with exogenous sunk costs - goes to zero as the market becomes larger. |
| Keywords: | Concentration;Truncated Poisson and Negative Binomial models;quantile regressions |
| JEL: | C24 D43 L11 L89 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200843&r=ind |