Abstract In this study, we investigate optimal investment timing and capacity decisions in the presence of time-to-build and competition. Due to uncertain time-to-build, a leader, who invests first, may have its product enter the market after a follower’s. We show that a dominated firm with the longer time-to-build can become a leader by making the investment earlier than a dominant firm with shorter investment lags. The leader’s capacity choice increases with the dominated firm’s time-to-build, even if the dominated entity is the leader. This finding is consistent with the observation in the electric vehicles market in which a relatively new firm with little experience of mass production makes aggressive investment early on, while the biggest carmakers capable of mass production are timing their investment. With a welfare-maximizing policy, however, the dominant firm with the shorter time-to-build always becomes the leader. There is a significant loss of social welfare with the dominated firm being the leader, and the loss increases with the asymmetry of time-to-build.
{"title":"Investment Timing and Capacity Decisions with Time-to-Build in a Duopoly Market","authors":"Haejun Jeon","doi":"10.2139/ssrn.3331490","DOIUrl":"https://doi.org/10.2139/ssrn.3331490","url":null,"abstract":"Abstract In this study, we investigate optimal investment timing and capacity decisions in the presence of time-to-build and competition. Due to uncertain time-to-build, a leader, who invests first, may have its product enter the market after a follower’s. We show that a dominated firm with the longer time-to-build can become a leader by making the investment earlier than a dominant firm with shorter investment lags. The leader’s capacity choice increases with the dominated firm’s time-to-build, even if the dominated entity is the leader. This finding is consistent with the observation in the electric vehicles market in which a relatively new firm with little experience of mass production makes aggressive investment early on, while the biggest carmakers capable of mass production are timing their investment. With a welfare-maximizing policy, however, the dominant firm with the shorter time-to-build always becomes the leader. There is a significant loss of social welfare with the dominated firm being the leader, and the loss increases with the asymmetry of time-to-build.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132951565","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We investigate the welfare of intermediaries in oligopolistic markets where intermediaries offer additional services. We exploit the unique circumstance that in the empirical setting studied, outdoor advertising, consumers can purchase from manufacturers or intermediaries. Intermediaries provide additional services to the consumers and charge a margin for them. Intermediaries provide the following additional services: search services (information about products), purchase-aggregation services (access to quantity discounts), and consulting services. We specify an equilibrium model and structurally estimate it using market-level data. The demand includes consumers with costly search and channel-specific preferences. The supply includes two distribution channels. One features bargaining about wholesale prices between manufacturers and intermediaries and downstream price competition. The other is vertically integrated. We show how Google search data can be used to identify the search-cost parameters. We use the estimated model to simulate counterfactual scenarios where intermediaries do not offer additional services. We find that the three services considered provide value to consumers, with search playing a prominent role. Our analysis helps explain why intermediaries are ubiquitous in modern economies despite the double marginalization. This paper was accepted by Matthew Shum, marketing.
{"title":"Measuring the Welfare of Intermediaries","authors":"J. Donna, Pedro Pereira, Tiago Pires, A. Trindade","doi":"10.2139/ssrn.3285205","DOIUrl":"https://doi.org/10.2139/ssrn.3285205","url":null,"abstract":"We investigate the welfare of intermediaries in oligopolistic markets where intermediaries offer additional services. We exploit the unique circumstance that in the empirical setting studied, outdoor advertising, consumers can purchase from manufacturers or intermediaries. Intermediaries provide additional services to the consumers and charge a margin for them. Intermediaries provide the following additional services: search services (information about products), purchase-aggregation services (access to quantity discounts), and consulting services. We specify an equilibrium model and structurally estimate it using market-level data. The demand includes consumers with costly search and channel-specific preferences. The supply includes two distribution channels. One features bargaining about wholesale prices between manufacturers and intermediaries and downstream price competition. The other is vertically integrated. We show how Google search data can be used to identify the search-cost parameters. We use the estimated model to simulate counterfactual scenarios where intermediaries do not offer additional services. We find that the three services considered provide value to consumers, with search playing a prominent role. Our analysis helps explain why intermediaries are ubiquitous in modern economies despite the double marginalization. This paper was accepted by Matthew Shum, marketing.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"64 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124096833","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Digitization triggered a steep drop in the cost of information. The resulting data glut created a bottleneck because human cognitive capacity is unable to cope with large amounts of information. Artificial intelligence and machine learning (AI/ML) triggered a similar drop in the cost of machine-based decision-making and helps in overcoming this bottleneck. Substantial change in the relative price of resources puts pressure on ownership and access rights to these resources. This explains pressure on access rights to data. ML thrives on access to big and varied datasets. We discuss the implications of access regimes for the development of AI in its current form of ML. The economic characteristics of data (non-rivalry, economies of scale and scope) favour data aggregation in big datasets. Non-rivalry implies the need for exclusive rights in order to incentivise data production when it is costly. The balance between access and exclusion is at the centre of the debate on data regimes. We explore the economic implications of several modalities for access to data, ranging from exclusive monopolistic control to monopolistic competition and free access. Regulatory intervention may push the market beyond voluntary exchanges, either towards more openness or reduced access. This may generate private costs for firms and individuals. Society can choose to do so if the social benefits of this intervention outweigh the private costs. We briefly discuss the main EU legal instruments that are relevant for data access and ownership, including the General Data Protection Regulation (GDPR) that defines the rights of data subjects with respect to their personal data and the Database Directive (DBD) that grants ownership rights to database producers. These two instruments leave a wide legal no-man's land where data access is ruled by bilateral contracts and Technical Protection Measures that give exclusive control to de facto data holders, and by market forces that drive access, trade and pricing of data. The absence of exclusive rights might facilitate data sharing and access or it may result in a segmented data landscape where data aggregation for ML purposes is hard to achieve. It is unclear if incompletely specified ownership and access rights maximize the welfare of society and facilitate the development of AI/ML.
{"title":"The Importance of Data Access Regimes for Artificial Intelligence and Machine Learning","authors":"B. Martens","doi":"10.2139/ssrn.3357652","DOIUrl":"https://doi.org/10.2139/ssrn.3357652","url":null,"abstract":"Digitization triggered a steep drop in the cost of information. The resulting data glut created a bottleneck because human cognitive capacity is unable to cope with large amounts of information. Artificial intelligence and machine learning (AI/ML) triggered a similar drop in the cost of machine-based decision-making and helps in overcoming this bottleneck. Substantial change in the relative price of resources puts pressure on ownership and access rights to these resources. This explains pressure on access rights to data. ML thrives on access to big and varied datasets. We discuss the implications of access regimes for the development of AI in its current form of ML. The economic characteristics of data (non-rivalry, economies of scale and scope) favour data aggregation in big datasets. Non-rivalry implies the need for exclusive rights in order to incentivise data production when it is costly. The balance between access and exclusion is at the centre of the debate on data regimes. We explore the economic implications of several modalities for access to data, ranging from exclusive monopolistic control to monopolistic competition and free access. Regulatory intervention may push the market beyond voluntary exchanges, either towards more openness or reduced access. This may generate private costs for firms and individuals. Society can choose to do so if the social benefits of this intervention outweigh the private costs. We briefly discuss the main EU legal instruments that are relevant for data access and ownership, including the General Data Protection Regulation (GDPR) that defines the rights of data subjects with respect to their personal data and the Database Directive (DBD) that grants ownership rights to database producers. These two instruments leave a wide legal no-man's land where data access is ruled by bilateral contracts and Technical Protection Measures that give exclusive control to de facto data holders, and by market forces that drive access, trade and pricing of data. The absence of exclusive rights might facilitate data sharing and access or it may result in a segmented data landscape where data aggregation for ML purposes is hard to achieve. It is unclear if incompletely specified ownership and access rights maximize the welfare of society and facilitate the development of AI/ML.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130714877","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we study technology transfer in a duopoly model with heterogeneous goods under quantity and price competition. We obtain three conclusions: Firstly, under product heterogeneity, technology transfer can take any form. Secondly, the properties found in the homogeneous case generalize to the heterogeneous case with various degrees of generality. Finally, if demand is not symmetric we may find full technology transfer between firms with different sizes and that firms with similar technology do not engage in technology transfer. We find evidence of the latter in the market for antidepressants.
{"title":"Technology Transfer: Barriers and Opportunities","authors":"Luis C. Corchón, C. Garcia","doi":"10.2139/ssrn.3269202","DOIUrl":"https://doi.org/10.2139/ssrn.3269202","url":null,"abstract":"In this paper we study technology transfer in a duopoly model with heterogeneous goods under quantity and price competition. We obtain three conclusions: Firstly, under product heterogeneity, technology transfer can take any form. Secondly, the properties found in the homogeneous case generalize to the heterogeneous case with various degrees of generality. Finally, if demand is not symmetric we may find full technology transfer between firms with different sizes and that firms with similar technology do not engage in technology transfer. We find evidence of the latter in the market for antidepressants.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126059168","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Federal Communications Commission (“FCC”) has recognized that WiFi plays an increasingly important role as a competitor to the services offered by the mobile wireless industry, including when evaluating the state of competition in the mobile wireless marketplace. When reviewing proposed mergers, however, the FCC relies on a product market definition, “mobile telephony/broadband services,” that has been unchanged for approximately a decade and that does not account for the changed role of WiFi in the competitive marketplace during this time. Notably, the FCC continues to rely on this market definition without undertaking any particular analysis and without the support of any empirical evidence. Since the FCC adopted its market definition: (1) the choice of WiFi has become a clear reflection of how Americans use wireless devices; (2) market conditions for wireless services have changed rapidly; (3) more data has migrated to WiFi offload — transmitting wireless data to a WiFi network — than has remained on the cellular networks, and most wireless services are used in both nomadic and fixed environments; (4) WiFi capabilities in wireless devices have evolved and become ubiquitous; (6) new technologies have not appeared to lessen demand for WiFi; (7) cable providers are challenging wireless carriers with WiFi offload and wireless services; and (8) consumers have become sensitive to price and quality in choosing between cellular services or WiFi. When the use of WiFi for consumer data offload is examined, a hypothetical monopolist may reveal that “mobile telephony/broadband services” are not a separate market. The FCC’s market definition was first adopted in 2008, when 3G technologies were first being deployed and 4G was only on the planning boards. Today, the technologies of 2008, and the associated market definitions, are outdated. Instead, new 5G technologies are being deployed. In this context, the FCC’s reliance on an outdated market definition results in an inaccurate understanding of competition in the market. Before conducting competitive analyses of the mobile marketplace, the FCC should carefully examine consumer choices of communications services and develop market definitions that reflect current technologies and consumer practices. WiFi, and the businesses that provide it, likely discipline prices of wireless services and are part of the same economic market.
{"title":"WiFi Helps Define the Relevant Market for Wireless Services","authors":"Harold W. Furchtgott-Roth","doi":"10.2139/SSRN.3260271","DOIUrl":"https://doi.org/10.2139/SSRN.3260271","url":null,"abstract":"The Federal Communications Commission (“FCC”) has recognized that WiFi plays an increasingly important role as a competitor to the services offered by the mobile wireless industry, including when evaluating the state of competition in the mobile wireless marketplace. When reviewing proposed mergers, however, the FCC relies on a product market definition, “mobile telephony/broadband services,” that has been unchanged for approximately a decade and that does not account for the changed role of WiFi in the competitive marketplace during this time. Notably, the FCC continues to rely on this market definition without undertaking any particular analysis and without the support of any empirical evidence. Since the FCC adopted its market definition: (1) the choice of WiFi has become a clear reflection of how Americans use wireless devices; (2) market conditions for wireless services have changed rapidly; (3) more data has migrated to WiFi offload — transmitting wireless data to a WiFi network — than has remained on the cellular networks, and most wireless services are used in both nomadic and fixed environments; (4) WiFi capabilities in wireless devices have evolved and become ubiquitous; (6) new technologies have not appeared to lessen demand for WiFi; (7) cable providers are challenging wireless carriers with WiFi offload and wireless services; and (8) consumers have become sensitive to price and quality in choosing between cellular services or WiFi. When the use of WiFi for consumer data offload is examined, a hypothetical monopolist may reveal that “mobile telephony/broadband services” are not a separate market. \u0000The FCC’s market definition was first adopted in 2008, when 3G technologies were first being deployed and 4G was only on the planning boards. Today, the technologies of 2008, and the associated market definitions, are outdated. Instead, new 5G technologies are being deployed. In this context, the FCC’s reliance on an outdated market definition results in an inaccurate understanding of competition in the market. Before conducting competitive analyses of the mobile marketplace, the FCC should carefully examine consumer choices of communications services and develop market definitions that reflect current technologies and consumer practices. WiFi, and the businesses that provide it, likely discipline prices of wireless services and are part of the same economic market.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-10-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127878115","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The non-rival, non-excludable and infinitely expansible characteristics of digital goods with marginal cost of zero strongly favours the use of bundling strategies. Theoretical tractability requires most models in the current literature to make highly stylized assumptions, rarely observed or anticipated in the real-life situations, motivating inquiry. This paper considers a competition model in which: * the firms, consumers and differentiated products are finite in number; * prices are discrete and not continuous; * consumers may purchase multiple items in a single product category where the degree of complementarity or substitutability of the product categories can also vary across consumers; and * where consumer-specific cost savings are obtained when purchasing multiple items from the same firm. Approximate solutions are obtained through numerical simulation. Firms act in concert to maximise the total firm revenue. Our main finding is that the interplay between maximal firm revenue, consumer surplus and prices is very complex and that high firm revenue and high consumer surplus are not antithetic. It suggests also that consumer surplus and market concentration are not necessarily related. Many market outcomes that are observed may be due to chance rather than design as diverse outcomes can accompany situations that are, to the firms, difficult to distinguish.
{"title":"Content and Access Provision in a Discrete Competition Model","authors":"Bronwyn E. Howell, P. Potgieter","doi":"10.2139/ssrn.3141844","DOIUrl":"https://doi.org/10.2139/ssrn.3141844","url":null,"abstract":"The non-rival, non-excludable and infinitely expansible characteristics of digital goods with marginal cost of zero strongly favours the use of bundling strategies. Theoretical tractability requires most models in the current literature to make highly stylized assumptions, rarely observed or anticipated in the real-life situations, motivating inquiry. This paper considers a competition model in which: * the firms, consumers and differentiated products are finite in number; * prices are discrete and not continuous; * consumers may purchase multiple items in a single product category where the degree of complementarity or substitutability of the product categories can also vary across consumers; and * where consumer-specific cost savings are obtained when purchasing multiple items from the same firm. Approximate solutions are obtained through numerical simulation. Firms act in concert to maximise the total firm revenue. Our main finding is that the interplay between maximal firm revenue, consumer surplus and prices is very complex and that high firm revenue and high consumer surplus are not antithetic. It suggests also that consumer surplus and market concentration are not necessarily related. Many market outcomes that are observed may be due to chance rather than design as diverse outcomes can accompany situations that are, to the firms, difficult to distinguish.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126548082","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study trust building in credence-goods markets in a dynamic setting. When consumers’ expected loss is low and it is efficient to fix only the more severe problem, there is no trade in the one-shot game. In the repeated game, an expert’s honesty is monitored through consumers’ rejection of his recommendations. The expert’s profit in the optimal equilibrium weakly increases in the discount factor but does not achieve the first best, which contrasts sharply with the optimal equilibrium in experience-goods markets. The optimal equilibrium involves undertreatment if the expert is sufficiently patient, and overtreatment if he is moderately patient. (JEL C73, D82, D83, Z13)
{"title":"Trust Building in Credence Goods Markets","authors":"Yuk-fai Fong, Ting Liu, Xiaoxuan Meng","doi":"10.2139/ssrn.3029721","DOIUrl":"https://doi.org/10.2139/ssrn.3029721","url":null,"abstract":"We study trust building in credence-goods markets in a dynamic setting. When consumers’ expected loss is low and it is efficient to fix only the more severe problem, there is no trade in the one-shot game. In the repeated game, an expert’s honesty is monitored through consumers’ rejection of his recommendations. The expert’s profit in the optimal equilibrium weakly increases in the discount factor but does not achieve the first best, which contrasts sharply with the optimal equilibrium in experience-goods markets. The optimal equilibrium involves undertreatment if the expert is sufficiently patient, and overtreatment if he is moderately patient. (JEL C73, D82, D83, Z13)","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127627482","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, we introduce a simple new theory on mixed competition between oligopolistic firms and the competitive fringe, assuming a comparative advantage for big firms and free entry for small _rms. Oligopolies are defined as conglomerates, each part of which benefits from joint operations through lower costs. Our theory implies that (i) industries with a few oligopolies arise as a stable outcome of mixed competition; (ii) mixed competition differs from the monopolistic competition of single-product firms due to the underproduction of oligopolistic firms and differs from pure oligopolistic competition sine constraints on this underproduction are imposed by the competitive fringe; (iii) a positive shock in the market size an strengthen or weaken the competitiveness of the economy through the growth of the number of oligopolies
{"title":"The Stable Coexistence of Oligopolies and the Competitive Fringe","authors":"V. Gonharenko, Dmitry S. Pokrovsky, S. Alexander","doi":"10.2139/ssrn.3219757","DOIUrl":"https://doi.org/10.2139/ssrn.3219757","url":null,"abstract":"In this paper, we introduce a simple new theory on mixed competition between oligopolistic firms and the competitive fringe, assuming a comparative advantage for big firms and free entry for small _rms. Oligopolies are defined as conglomerates, each part of which benefits from joint operations through lower costs. Our theory implies that (i) industries with a few oligopolies arise as a stable outcome of mixed competition; (ii) mixed competition differs from the monopolistic competition of single-product firms due to the underproduction of oligopolistic firms and differs from pure oligopolistic competition sine constraints on this underproduction are imposed by the competitive fringe; (iii) a positive shock in the market size an strengthen or weaken the competitiveness of the economy through the growth of the number of oligopolies","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130918496","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
By limiting operating flexibility, real estate investments are found to increase firm risk, thus expected returns. This study introduces product market competition as a critical determinant of the relation between real estate investments and stock returns. As part of capacity strategies, these investments are generally associated with increased market power and lower cash flow volatility in oligopolistic industries. I present a simple model of oligopolistic competition showing a negative relation between real estate holdings and firm beta, and empirically confirm this prediction. Controlling for product market competition enhances identification of the endogenous relation between real estate investments and stock returns.
{"title":"Real Estate Investments, Product Market Competition and Stock Returns","authors":"Moussa Diop","doi":"10.1111/1540-6229.12201","DOIUrl":"https://doi.org/10.1111/1540-6229.12201","url":null,"abstract":"By limiting operating flexibility, real estate investments are found to increase firm risk, thus expected returns. This study introduces product market competition as a critical determinant of the relation between real estate investments and stock returns. As part of capacity strategies, these investments are generally associated with increased market power and lower cash flow volatility in oligopolistic industries. I present a simple model of oligopolistic competition showing a negative relation between real estate holdings and firm beta, and empirically confirm this prediction. Controlling for product market competition enhances identification of the endogenous relation between real estate investments and stock returns.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"52 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124344094","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we study the theoretical plausibility of the conjecture that inflation arises because imperfectly competitive markets (ICM in the sequel) translate cost pushes in large price increases. We define two different measures of inflation transmission. We compare these measures in several models of ICM and in perfectly competitive markets (PCM in the seque!). In each case we find a necessary and sufficient condition for an ICM to transmit more inflation -according to the two measures- than that transmitted by a PCM.
{"title":"Imperfectly Competitive Markets, Trade Unions and Inflation: Do Imperfectly Competitive Markets Transmit More Inflation Than Perfectly Competitive Ones? A Theoretical Appraisal","authors":"Luis C. Corchón","doi":"10.2139/ssrn.3269220","DOIUrl":"https://doi.org/10.2139/ssrn.3269220","url":null,"abstract":"In this paper we study the theoretical plausibility of the conjecture that inflation arises because imperfectly competitive markets (ICM in the sequel) translate cost pushes in large price increases. We define two different measures of inflation transmission. We compare these measures in several models of ICM and in perfectly competitive markets (PCM in the seque!). In each case we find a necessary and sufficient condition for an ICM to transmit more inflation -according to the two measures- than that transmitted by a PCM.","PeriodicalId":142139,"journal":{"name":"ERN: Monopoly","volume":"64 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129127304","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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