1,721,171 research outputs found
The effect of horizontal mergers, when firms compete in prices and investments
No full textMotivated by a number of high-profile antitrust cases, we study mergers when firms offer differentiated products and compete in prices and investments. Since the net effect of the merger is a priori ambiguous, we use aggregative game theory to sign it: we find thatabsent efficiency gains, the merger always reduces total investments and consumer surplus. We also prove that there exist classes of models for which the results obtained with cost-reducing investments are equivalent to those with quality-enhancing investments
Restrizioni alla pubblicità nelle libere professioni
No full textLo scopo di questo lavoro è di analizzare le restrizioni alla pubblicità nel settore dei servizi professionali. I servizi professionali sono caratterizzati da considerevoli asimmetrie informative tra professionisti e consumatori. Ciò giustifica il fatto che questo settore sia regolamentato, per esempio attraverso i requisiti minimi di formazione e di qualità della prestazione. Garantita la protezione dei consumatori attraverso i
precedenti strumenti di regolazione, non è però chiaro perché proibire ai professionisti di diffondere informazioni attraverso la pubblicità debba aumentare il benessere collettivo.
In realtà, sia la teoria economica che l’evidenza empirica sostengono l’opinione opposta. Attraverso la pubblicità non ingannevole i consumatori potrebbero identificare i servizi e i professionisti che siano più consoni alle loro necessità, riducendo il
tempo ed i costi di ricerca. A loro volta, i professionisti opererebbero in un mercato più competitivo e ciò porterebbe ad una riduzione dei prezzi. La pubblicità potrebbe anche
aiutare i professionisti meno affermati a crearsi una clientela, favorendo l’entrata ed esercitando ulteriori pressioni competitive. Infine, non sembra esistere evidenza a supporto della tesi che la qualità dovrebbe diminuire a causa della pubblicità. Pertanto,
la nostra conclusione è che non sussistono motivazioni economiche in base alle quali la pubblicità informativa (veritiera) debba essere proibita nel mercato dei servizi professionali
Dynamic vertical foreclosure
No full textThis paper shows that vertical foreclosure can have a dynamic rationale. By refusing to supply an efficient downstream rival, a vertically integrated incumbent sacrifices current profits but can exclude the rival by depriving it of the critical profits it needs to be successful. In turn, monopolising the downstream market may prevent the incumbent from losing most of its future profits because: (a) it allows the incumbent to extract more rents from an efficient upstream rival if future upstream entry cannot be discouraged; or (b) it also deters future upstream entry by weakening competition for the input and reducing the post-entry profits of the prospective upstream competitor
A Simple Theory of Predation
No full textWe propose a simple theory of predatory pricing, based on incumbency advantages, scale economies and sequential buyers (or markets). The prey needs a critical scale to be successful. The incumbent (or predator) has an initial advantage and is ready to make losses on
earlier buyers so as to deprive the prey of the scale it needs, thus making monopoly profits
on later buyers. Several extensions are considered, including cases where scale economies
exist because of demand externalities or two-sided market effects, and where markets are
characterized by common costs. Conditions under which predation may (or not) take place
in actual cases are also discussed
Does Relocation of Economic Activities Hurt Labour in the Home Country?
No full textIn many industrialized economies, there is growing concern about the relocation of economic activities. This paper analyzes whether this concern in justified. The authors show that the theory predicts ambiguous effects of relocation on the country of origin. Therefore, whether such effects are positive or negative is an empirical question. A survey of empirical works shows that no convincing evidence that outward FDI is harmful
Upstream mergers, downstream mergers, and secret vertical contracts
No full textIn an industry characterized by secret vertical contracts, we consider a benchmark case where two vertical chains exist, with two upstream manufacturers selling to two downstream retailers, and show that the equilibrium prices are independent of whether upstream or downstream firms have all the bargaining power. We then analyse two alternative mergers, and show that a downstream merger (which gives the downstream monopolist all the bargaining power) is more welfare detrimental than an upstream merger (which gives the bargaining power to the upstream monopolist). We also show that downstream and upstream mergers have the same effects when contracts are observable. © 2001 University of Venice
On the use of price-cost tests in loyalty discounts and exclusive dealing arrangements: which implications from economic theory should be drawn?
No full textRecent cases in the US (Meritor, Eisai) and in the EU (Intel) have revived the debate on the use of price-cost tests in loyalty discount cases. We draw on existing recent economic theories of exclusion and develop new formal material to argue that economics alone does not justify applying a price-cost test to predation but not to loyalty discounts. Still, the latter contain features (they reference rivals and allow to discriminate across buyers and/or units bought) that have a higher exclusionary potential than the former, and this may well warrant closer scrutiny and more severe treatment from antitrust agencies and courts
Economic principles for the enforcement of abuse of dominance provisions
No full textThe European Commission (EC) has recently announced its intention to issue Guidelines on exclusionary abuses. In this paper, we explain how economics can and should be used to inform a sound and effects-based approach in the enforcement of Article 102 TFEU. In particular, the EC should be guided only by a consumer welfare standard; exclusive dealing and exclusivity rebates should be subject to a (rebuttable) presumption of harm; price-cost tests are meaningful only for predation and other practices that do not reference rivals; essentiality of the input should not be a requirement for vertical foreclosure cases of any type, but such cases should be limited only to dominant firms that satisfy certain criteria
Advertising Restrictions in Professional Services
No full textThere are some 15 OECD countries where advertising professional services is completely or partially restricted. This paper provides economic arguments to support the view that such restrictions are welfare detrimental. In particular, we illustrate the theoretical arguments providing underpinning to the fact that advertising is not expected to decrease the quality of professional services. We also illustrate the empirical evidedence documenting that advertising professional services seems to favour entry and reduce concentration. There is a strong case, thus, to remove advertising restrictions
Buyers' Miscoordination, Entry and Downstream Competition
No full textThis article shows that buyers' coordination failures might prevent entry in an industry with an incumbent firm and a more efficient potential entrant. If there were a single buyer, or if all buyers formed a central purchasing agency, coordination failures would be avoided and efficient entry would always occur. More generally, exclusion is less likely the lower the number of buyers. For any given number of buyers, exclusion is less likely the more fiercely buyers compete in the downstream market. First, intense competition may prevent miscoordination equilibria from arising; second, in cases where miscoordination equilibria still exist, it lowers the maximum price that the incumbent can sustain at such exclusionary equilibria. Copyright (C) The Author(s). Journal compilation (C) Royal Economic Society 2008.
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