Journal of Industrial Economics最新文献

Standards may create market power for the holders of standard essential patents (SEPs). To address these concerns, the literature advocates price commitments, whereby SEP holders commit to the maximum royalty they would charge were their technology included in the standard. We consider a setting in which a technology implementer holds private information about profitability. In this setting, price commitments increase efficiency not only by curbing SEP holders' market power, but also by alleviating distortions in the design of the royalty scheme. We derive conditions under which price commitments can be implemented using a simple royalty cap as used in practice.

In this article, I exploit the exogenous shock to China's image in the COVID-19 pandemic era and study the impact of country image on consumer choice in the South Korean beer market. First, I find that Tsingtao, a popular Chinese beer brand, lost about 4.8 million liters in sales, a 20% decrease, during the first eight months after the COVID-19 outbreak. Second, the impact of China's worsened image had not weakened by October 2020. Third, top-selling non-Chinese beers absorbed most of Tsingtao's lost sales. These findings reveal that country image has a substantial influence on consumer choice.

Recent work estimating production functions has often used methodologies proposed in two literatures: (1) “proxy variable” estimation techniques (Olley, S. and Pakes, A., 1996, Econometrica, 64, pp. 1263–1295), and (2) “dynamic panel” estimation techniques. I illustrate how timing and information set assumptions are key to both, and how these assumptions can be strengthened (or weakened) almost continuously. I examinehow, in some common production datasets, strengthening or weakening these assumptions affects the precision of estimates—comparing these impacts to those achieved by imposing alternative assumptions sometimes utilized in these literatures. This illustrates efficiency tradeoffs between different possible assumptions, at least in the production function context.

Frequent price promotions force consumers to continuously reassess their preferences over product offerings. When this leads consumers to exhibit a bias of “relative thinking”, such as may be triggered by a focus only on the most salient product attribute, we show in a model of sales (Varian, H. R., 1980, American Economic Review, 70(4), pp. 651–659) that this profoundly alters firms' pricing and product-positioning strategies. Vertical differentiation becomes more likely, with firms preferring to occupy the low-quality space in particular when they have few loyal consumers. More generally, product positioning now depends on the composition of consumers' consideration sets.

I study a seller's pricing problem where consumers perform costly product research about value before purchase. They buy the product when sufficiently optimistic about value and cease research when sufficiently pessimistic. I find that the seller encourages product research when prior belief about value is high, even though he could sell immediately for a high price. The prior affects both expected value and how additional information changes consumers' beliefs. I show that an increase in research cost affects equilibrium price nonmonotonically. Finally, when the seller chooses price and product value dispersion, the optimal level of dispersion need not be extremal.

This paper shows that the well-known royalty-stacking problem is not robust to considering licensors with patents of heterogeneous strength due to the Inverse Cournot effect. The incentives for a downstream producer to challenge a weak patent in court increase when the total royalty rate is lower. The Inverse Cournot effect generates a moderation force in the royalty rate of strong patent holders forcing weak licensors to reduce their royalties to avoid litigation and causing an increase in output. This effect is mitigated when all firms have weak patents, making royalty stacking a more relevant concern in that case.

We employ a structural model and counterfactual analysis to identify the impact of subsidies on the Chinese electric vehicle (EV) sales and examine their welfare effects. Our findings suggest that subsidies are effective in promoting the diffusion of domestic EVs, but may adversely affect technological advancement. When the subsidies on domestic EVs are reduced, the welfare on domestic EV consumers and producers decreases. However, the reduction in government spending on EV subsidies outweighs this private welfare loss. Thus, the overall welfare increases. Subsidies cannot be justified from the perspective of reducing externalities because they increase rather than decrease pollution.

This paper studies the role of taxation in durable good markets with dynamic monopolies. By conditioning the marginal tax rate on the volume of trade, the regulator can provide incentives for the monopolist to accelerate trade. When marginal cost pricing generates a loss for the monopolist, strategic delay cannot be avoided under regulatory budget constraint and the effects of tax policy depend on the monopolist's ability to commit. In the context of binary consumer types, we find a tax policy involving “back-loaded subsidy” that achieves the second-best outcome with commitment. In contrast, without commitment, a “front-loaded subsidy” improves welfare.

We study how the inaccuracy of a costly certification technology affects a monopolistic seller's profitability. We compare three scenarios: no certification, a 100% accurate certification, and a 50% accurate certification that produces accurate evaluations half the time. The noisy certification environment is never the most profitable and, depending on the buyers' loss aversion, can be the least profitable. However, a noisy certification can be more profitable than an accurate one, as it discourages the over-certification that occurs in an accurate certification environment. Experimentally, the noisy certification is shown to be the least profitable treatment, whereas the accurate certification is shown to be the most profitable.