International Journal of Industrial Organization最新文献

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Entry deterrence, domino effects and mergers in markets for complements

IF 1.7 3区经济学 Q2 ECONOMICS

International Journal of Industrial Organization

Pub Date : 2025-02-06 DOI: 10.1016/j.ijindorg.2025.103145

Paolo Ramezzana

This paper studies entry deterrence through exclusive contracts in markets for complementary components. When two components are produced by independent incumbents that both face entry threats, the incumbents' entry deterrence actions are strategic complements for a broad set of demand functions. As a result, when entry costs are sufficiently similar in the two components, in equilibrium entry is deterred in both components or in none. Thus, policy interventions that focus on promoting entry in a single component can have domino effects that lead to entry in all components. A merger between the incumbents allows for more efficient pricing of the system relative to a bilateral monopoly and, through this channel, increases the joint profits that the incumbents can earn if they deter entry. For intermediate levels of entry costs, this implies that the incumbents deter entry only if they are merged and thus, in an example of an “efficiency offense”, that the merger increases prices and lowers welfare. For sufficiently high entry costs, instead, entry is deterred even without the merger and the only effect of the merger is to lower prices and increase welfare.

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引用次数: 0

Platform-enabled information disclosure

IF 1.7 3区经济学 Q2 ECONOMICS

International Journal of Industrial Organization

Pub Date : 2025-01-31 DOI: 10.1016/j.ijindorg.2025.103143

Jacopo Gambato , Martin Peitz

We analyze consumers' voluntary information disclosure in a platform setting. For given consumer participation, the platform and sellers tend to prefer limited disclosure of consumer valuations, in contrast to consumers. With endogenous consumer participation, seller and platform incentives may be misaligned, and sellers may be better off when consumers can disclose their valuations. A regulator acting in the best interest of consumers and/or sellers may want to intervene and force the platform to employ a disclosure technology that enables consumers to voluntarily disclose information from a richer message space.

引用次数: 0

Can nonprofit target-setting mechanisms drive for-profit compliance? Evidence from sodium content

IF 1.7 3区经济学 Q2 ECONOMICS

International Journal of Industrial Organization

Pub Date : 2025-01-31 DOI: 10.1016/j.ijindorg.2025.103144

Christian Rojas , Ezgi Cengiz

The 2009 National Salt Reduction Initiative (NSRI) set sodium content targets for packaged food products in the United States. Some manufacturers pledged to meet the NSRI targets by 2014. We quantify the causal effect of the NSRI on sodium content reductions. Our identification of the effect rests on two pillars. First, the NSRI targets were set exogenously as they were determined by public health authorities (rather than firms) and according to criteria that are arguably unrelated to supply or demand factors. Second, the NSRI created unequal incentives for product reformulation: Firms had an incentive to only reformulate products with sodium content above the NSRI target. Furthermore, compliance with the targets implied that a greater sodium reduction was needed for products farther above the targets. Using a kink regression discontinuity design, we show that the NSRI reduced excess sodium content by about 30 percent. Interestingly, we find that the NSRI had a causal effect on firms that declared their pledge to the voluntary program (signatories) as well as on those that did not (non-signatories). We discuss possible reasons for the effectiveness of this target-setting mechanism.

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引用次数: 0

Complex pricing and consumer-side attention

IF 1.7 3区经济学 Q2 ECONOMICS

International Journal of Industrial Organization

Pub Date : 2025-01-23 DOI: 10.1016/j.ijindorg.2025.103142

Christian Fischer-Thöne , Alexander Rasch , Tobias Wenzel

This paper analyzes a market in which two horizontally differentiated firms compete by setting menus of two-part tariffs, and some consumers are not informed about the linear per-unit price component. We consider two regulatory interventions that limit firms' ability to price discriminate: (i) diminishing the range of contracts by reducing the number of two-part tariffs offered (which prohibits inter-group price discrimination); and (ii) reducing tariff complexity by abolishing linear fees (which prohibits inter-group and intra-group price discrimination). We characterize the effects of these interventions on firm profits and consumer welfare, and we identify conditions for the optimal regulatory policy. Our results provide insights for the evaluation of policy interventions.

引用次数: 0

Platform design and innovation incentives: Evidence from the product rating system on Apple's App Store

IF 1.7 3区经济学 Q2 ECONOMICS

International Journal of Industrial Organization

Pub Date : 2025-01-06 DOI: 10.1016/j.ijindorg.2024.103133

Benjamin T. Leyden

I study how the aggregation of product ratings on digital platforms affects the strategic behavior of third-party firms. Leveraging an unexpected and exogenous change in the rating system on Apple's App Store marketplace, I find that for nearly a decade, the manner in which the App Store aggregated customer ratings discouraged product updating by developers. Additionally, developers who were more reliant on the rating system were more responsive to the incentives created by this policy. Last, I provide suggestive evidence that the policy led to a decrease in developer effort on the platform.

引用次数: 0

Personalized content, engagement, and monetization in a mobile puzzle game

IF 1.7 3区经济学 Q2 ECONOMICS

International Journal of Industrial Organization

Pub Date : 2025-01-01 DOI: 10.1016/j.ijindorg.2024.103128

Louis-Daniel Pape , Christian Helmers , Alessandro Iaria , Stefan Wagner , Julian Runge

Digital technologies have reduced the cost of collecting detailed information on consumer characteristics and behavior. Despite the large literature on the consequences of using these data to personalize prices, little is known about content personalization. Using detailed player-level data from a mobile puzzle game and a novel structural model of player behavior, we investigate the effects on revenue of personalizing game difficulty using observable player characteristics. Our results show that, while average difficulty across players is successfully set by the game developer to maximize revenue, personalization can further increase revenue by 71%. Personalized difficulty leads to an overall increase in player engagement and, consequently, revenue generation in the form of in-app purchases. Although the largest relative increase in revenue comes from the smallest spenders, most of the absolute increase in revenue comes from a further increase in spending by the largest spenders.

引用次数: 0

Industrial organization and The Rise of Market Power

IF 1.7 3区经济学 Q2 ECONOMICS

International Journal of Industrial Organization

Pub Date : 2025-01-01 DOI: 10.1016/j.ijindorg.2024.103131

Nathan H. Miller

This article addresses developments in the literature on The Rise of Market Power. First, it summarizes research about the result of De Loecker et al. (2020) that the sales-weighted average markup has increased in the United States. Second, it summarizes and evaluates a set of industry studies that examine market power over long time horizons in specific settings. A theme that emerges from these industry studies is that technological advancements matter a great deal for the evolution of economic outcomes. By contrast, the studies do not point to weak antitrust enforcement as contributing to greater market power. The article concludes by outlining directions for future research.

引用次数: 0

Complementary bidding and cartel detection: Evidence from Nordic asphalt markets

IF 1.7 3区经济学 Q2 ECONOMICS

International Journal of Industrial Organization

Pub Date : 2025-01-01 DOI: 10.1016/j.ijindorg.2024.103129

Aapo Aaltio , Riku Buri , Antto Jokelainen , Johan Lundberg

A key challenge in cartel enforcement is identifying collusive agreements. We study two major Nordic procurement cartels that operated in the asphalt paving market. We find evidence that during the cartel period bids were clustered and the winning bid was isolated. We implement two cartel detection methods that exploit variation in the distribution of bids. The method developed by Clark et al. (forthcoming) correctly rejects competitive bidding for the cartel period in both markets. The method suggested by Huber and Imhof (2019) achieves a high prediction rate in one of the markets but not in the market where the cartel had a more modest impact on bid distribution. Our results suggest that statistical screening methods with low data requirements can be useful for competition authorities in detecting collusive agreements.

引用次数: 0

Optimal equity split under unobservable investments

IF 1.7 3区经济学 Q2 ECONOMICS

International Journal of Industrial Organization

Pub Date : 2025-01-01 DOI: 10.1016/j.ijindorg.2024.103132

Lihua Tan , Zhaojun Yang

This paper examines the optimal equity split between a penniless entrepreneur (E) and a deep-pocketed venture capitalist (V) cooperating in a two-stage investment project. The first-stage investment explores project profitability, and the final success probability is a function of V's unobservable investment amount, E's and V's private effort like the Cobb-Douglas production function. We show that if project profitability is good enough, the optimal equity split and the welfare loss rate arising from moral hazard are explicitly determined by the project inputs' output elasticities, independent of project profitability and inputs' costs. If project profitability is not contractible, we propose a new renegotiation mechanism. The renegotiation is profitable only when V's participation constraint is not met. We identify the thresholds determining whether E should abandon the project, whether E should go ahead without any changes, and whether E should increase V's equity or roll back cash to V. We show that the initial wealth transferred from V to E can be appropriated upon renegotiation to realize a Pareto improvement; our model provides a novel explanation why internal financing is preferred.

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引用次数: 0

Chips in on a merger: The Arm-Nvidia case

IF 1.7 3区经济学 Q2 ECONOMICS

International Journal of Industrial Organization

Pub Date : 2025-01-01 DOI: 10.1016/j.ijindorg.2024.103130

Helena Perrone

This paper analyzes the Nvidia-Arm vertical merger through the lens of the recent literature in Industrial Organization. It explores potential competitive concerns surrounding market foreclosure, technological access, and exclusionary behavior, considering the dynamic semiconductor industry's intricacies. Although limited public information is available due to the parties halting the merger during phase two, I propose four theories of competitive effects addressing issues such as vertical foreclosure in dynamic markets, stifling of innovation due to hold-up concerns, and the ecosystem effects of the merger. This discussion sheds light on the potential impact of this merger in the semiconductor industry on competition in innovative high tech markets such as CPUs, datacenters, gaming consoles, and assisted driving.

引用次数: 0

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