Pub Date : 2025-06-04DOI: 10.1016/j.ijindorg.2025.103174
John Vickers
The paper contains a critical discussion of views that the remit of merger policy should be broadened beyond competition, to include, for example, goals relating to the environment, industrial competitiveness, or the public interest generally. It is argued that widening the remit of merger policy is unlikely to promote such objectives effectively, but that it risks weakening commitment and the accountability of policy, and may lead to re-politicisation. Competition should therefore continue to dominate merger policy.
{"title":"Should competition monopolise merger policy?","authors":"John Vickers","doi":"10.1016/j.ijindorg.2025.103174","DOIUrl":"10.1016/j.ijindorg.2025.103174","url":null,"abstract":"<div><div>The paper contains a critical discussion of views that the remit of merger policy should be broadened beyond competition, to include, for example, goals relating to the environment, industrial competitiveness, or the public interest generally. It is argued that widening the remit of merger policy is unlikely to promote such objectives effectively, but that it risks weakening commitment and the accountability of policy, and may lead to re-politicisation. Competition should therefore continue to dominate merger policy.</div></div>","PeriodicalId":48127,"journal":{"name":"International Journal of Industrial Organization","volume":"101 ","pages":"Article 103174"},"PeriodicalIF":1.7,"publicationDate":"2025-06-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144272471","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-05-27DOI: 10.1016/j.ijindorg.2025.103171
Alberto A. Gaggero , Alexander Luttmann
This study provides empirical evidence documenting how COVID-19 affects intertemporal pricing and price dispersion in the U.S. domestic airline market. Studying a unique panel of 43 million fares collected before and after the outbreak of the pandemic, we find that airlines discounted fares by an average of 57% in the first five months of the pandemic relative to the five months that immediately preceded the pandemic. We also find that flight-level prices increased at a lower rate, particularly in the last week to departure. As a consequence, flight-level price dispersion decreased. These findings are consistent with the theoretical predictions arising from models of stochastic peak-load pricing and intertemporal price discrimination.
{"title":"How does COVID-19 affect intertemporal price discrimination and price dispersion? Evidence from the airline industry","authors":"Alberto A. Gaggero , Alexander Luttmann","doi":"10.1016/j.ijindorg.2025.103171","DOIUrl":"10.1016/j.ijindorg.2025.103171","url":null,"abstract":"<div><div>This study provides empirical evidence documenting how COVID-19 affects intertemporal pricing and price dispersion in the U.S. domestic airline market. Studying a unique panel of 43 million fares collected before and after the outbreak of the pandemic, we find that airlines discounted fares by an average of 57% in the first five months of the pandemic relative to the five months that immediately preceded the pandemic. We also find that flight-level prices increased at a lower rate, particularly in the last week to departure. As a consequence, flight-level price dispersion decreased. These findings are consistent with the theoretical predictions arising from models of stochastic peak-load pricing and intertemporal price discrimination.</div></div>","PeriodicalId":48127,"journal":{"name":"International Journal of Industrial Organization","volume":"101 ","pages":"Article 103171"},"PeriodicalIF":1.7,"publicationDate":"2025-05-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144147356","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-03DOI: 10.1016/j.ijindorg.2025.103161
Ruizhi Pang , Xuping Zhang , Matthew Leisten , Zhongqi Deng
Environmental regulation has the potential to reshape market competition, thereby influencing the market power of regulated firms and potentially impacting social welfare. We show that in certain scenarios, both high-pollution and low-pollution firms may respond to environmental regulation by reducing overall output, thereby increasing price-marginal cost markups. This approach allows them to transfer some of the regulatory costs onto consumers. However, well-designed and appropriately implemented environmental regulations can still increase social welfare. Our empirical analysis of Chinese manufacturing firms supports this assertion, indicating that environmental regulations in China lead to an increase in markups while simultaneously reducing the welfare losses caused by markups.
{"title":"The equilibrium effects of environmental regulation on heterogeneous competing firms: Theory and evidence from Chinese manufacturing","authors":"Ruizhi Pang , Xuping Zhang , Matthew Leisten , Zhongqi Deng","doi":"10.1016/j.ijindorg.2025.103161","DOIUrl":"10.1016/j.ijindorg.2025.103161","url":null,"abstract":"<div><div>Environmental regulation has the potential to reshape market competition, thereby influencing the market power of regulated firms and potentially impacting social welfare. We show that in certain scenarios, both high-pollution and low-pollution firms may respond to environmental regulation by reducing overall output, thereby increasing price-marginal cost markups. This approach allows them to transfer some of the regulatory costs onto consumers. However, well-designed and appropriately implemented environmental regulations can still increase social welfare. Our empirical analysis of Chinese manufacturing firms supports this assertion, indicating that environmental regulations in China lead to an increase in markups while simultaneously reducing the welfare losses caused by markups.</div></div>","PeriodicalId":48127,"journal":{"name":"International Journal of Industrial Organization","volume":"100 ","pages":"Article 103161"},"PeriodicalIF":1.7,"publicationDate":"2025-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143814963","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-03DOI: 10.1016/j.ijindorg.2025.103162
John W. Mayo, Robert Press
Did a 2000 legislatively-mandated increase in the reporting thresholds for proposed mergers lead firms to endogenously undertake mergers that now lie below the threshold, with the aim of avoiding regulatory scrutiny? Recent research finds support for this behavior, dubbing this activity “stealth consolidation.” We extend this exploration in new directions logically implied by the theory. Our empirical findings are inconsistent with the theory of stealth consolidations, and suggest that more research is necessary to explain the evolving composition of mergers.
{"title":"The role of antitrust policy on the composition of mergers: Further reflections on “stealth consolidation”","authors":"John W. Mayo, Robert Press","doi":"10.1016/j.ijindorg.2025.103162","DOIUrl":"10.1016/j.ijindorg.2025.103162","url":null,"abstract":"<div><div>Did a 2000 legislatively-mandated increase in the reporting thresholds for proposed mergers lead firms to endogenously undertake mergers that now lie below the threshold, with the aim of avoiding regulatory scrutiny? Recent research finds support for this behavior, dubbing this activity “stealth consolidation.” We extend this exploration in new directions logically implied by the theory. Our empirical findings are inconsistent with the theory of stealth consolidations, and suggest that more research is necessary to explain the evolving composition of mergers.</div></div>","PeriodicalId":48127,"journal":{"name":"International Journal of Industrial Organization","volume":"101 ","pages":"Article 103162"},"PeriodicalIF":1.7,"publicationDate":"2025-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143941111","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-28DOI: 10.1016/j.ijindorg.2025.103159
Xiangyu Shi , Chang Wang
We (re)evaluate the general-equilibrium effects of (environmental) policies from the perspectives of input-output networks and firm dynamics and heterogeneity. Using China's carbon emission trading system (ETS) as an example, we find that ETS leads to more patent applications, especially the ones associated with low-carbon technologies in the target sectors, showing a trend of clean growth and green transition of the macroeconomy. The effects are mostly muted at the firm level due to selection effects, whereby only larger firms are significantly and positively affected. Meanwhile, larger firms occupy a small share in number but a large share of aggregate outcomes, contributing to the discrepancy between the negligible effects of ETS at the individual firm and large effects at the aggregate sector levels. The effects also diffuse in input-output networks, leading to more patents in upstream/downstream sectors, through the channels of demand/supply changes and knowledge spillovers. We build and estimate the first firm dynamics model with input-output linkages and regulatory policies in the literature and conduct policy experiments. ETS's effects are amplified given input-output networks.
{"title":"Carbon emission trading and green transition in China: The perspective of input-output networks, firm dynamics, and heterogeneity","authors":"Xiangyu Shi , Chang Wang","doi":"10.1016/j.ijindorg.2025.103159","DOIUrl":"10.1016/j.ijindorg.2025.103159","url":null,"abstract":"<div><div>We (re)evaluate the general-equilibrium effects of (environmental) policies from the perspectives of input-output networks and firm dynamics and heterogeneity. Using China's carbon emission trading system (ETS) as an example, we find that ETS leads to more patent applications, especially the ones associated with low-carbon technologies in the target sectors, showing a trend of clean growth and green transition of the macroeconomy. The effects are mostly muted at the firm level due to selection effects, whereby only larger firms are significantly and positively affected. Meanwhile, larger firms occupy a small share in number but a large share of aggregate outcomes, contributing to the discrepancy between the negligible effects of ETS at the individual firm and large effects at the aggregate sector levels. The effects also diffuse in input-output networks, leading to more patents in upstream/downstream sectors, through the channels of demand/supply changes and knowledge spillovers. We build and estimate the first firm dynamics model with input-output linkages and regulatory policies in the literature and conduct policy experiments. ETS's effects are amplified given input-output networks.</div></div>","PeriodicalId":48127,"journal":{"name":"International Journal of Industrial Organization","volume":"100 ","pages":"Article 103159"},"PeriodicalIF":1.7,"publicationDate":"2025-03-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143760325","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-18DOI: 10.1016/j.ijindorg.2025.103158
Xiaoshu Xu
The sequential arrival of bidders is a crucial aspect of real-world auctions, providing the auctioneer with incentives for re-auctioning and bidders with opportunities for resale. This paper investigates the optimality of sequential auctions, focusing on scenarios where the auctioneer can re-auction items and tap into potential future resale demand. Specifically, when bidders arrive in two batches, the auctioneer first conducts an English auction for the initial batch. If unsuccessful, the item is re-auctioned to both batches of bidders; otherwise, the winner can opt to resell to current and future bidders. I characterize the optimal sequential English auctions, noting that the auctioneer's belief about the value distribution of the first batch is necessarily limited after the initial auction fails. The findings demonstrate that, on the optimal reserve price path, the first batch always retains a positive winning probability in the re-auction. Furthermore, I identify conditions under which resale does not occur in equilibrium due to a high optimal reserve price in the initial auction. Thus, when the auctioneer can set optimal reserve prices and access resale demand, resale can be implicitly prohibited. These results provide important policy implications for auctions in both the private and public sectors.
{"title":"Optimal auctions with sequential arrival: Allowing for re-auction and resale","authors":"Xiaoshu Xu","doi":"10.1016/j.ijindorg.2025.103158","DOIUrl":"10.1016/j.ijindorg.2025.103158","url":null,"abstract":"<div><div>The sequential arrival of bidders is a crucial aspect of real-world auctions, providing the auctioneer with incentives for re-auctioning and bidders with opportunities for resale. This paper investigates the optimality of sequential auctions, focusing on scenarios where the auctioneer can re-auction items and tap into potential future resale demand. Specifically, when bidders arrive in two batches, the auctioneer first conducts an English auction for the initial batch. If unsuccessful, the item is re-auctioned to both batches of bidders; otherwise, the winner can opt to resell to current and future bidders. I characterize the optimal sequential English auctions, noting that the auctioneer's belief about the value distribution of the first batch is necessarily limited after the initial auction fails. The findings demonstrate that, on the optimal reserve price path, the first batch always retains a positive winning probability in the re-auction. Furthermore, I identify conditions under which resale does not occur in equilibrium due to a high optimal reserve price in the initial auction. Thus, when the auctioneer can set optimal reserve prices and access resale demand, resale can be implicitly prohibited. These results provide important policy implications for auctions in both the private and public sectors.</div></div>","PeriodicalId":48127,"journal":{"name":"International Journal of Industrial Organization","volume":"100 ","pages":"Article 103158"},"PeriodicalIF":1.7,"publicationDate":"2025-03-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143684041","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-05DOI: 10.1016/j.ijindorg.2025.103157
Olga Chiappinelli , Leonardo M. Giuffrida , Giancarlo Spagnolo
Scholars and policymakers have long recognized the potential of public procurement as an industrial policy tool to incentivize innovation. However, it remains unclear to what extent this potential has been realized and what measures should be implemented to maximize performance. This paper surveys the economic literature on public procurement of innovation (PPI) to take stock of this debate. We discuss the existing research on four broad questions: i) Does PPI spur innovation? ii) How should PPI be designed to best spur innovation? iii) What barriers hinder the implementation of PPI? iv) What is the role of PPI in the innovation policy mix? We conclude that PPI can be an effective innovation policy, but that further investigation is needed for a more solid assessment. We highlight the areas where additional research is most needed and discuss policy implications for current global challenges.
{"title":"Public procurement as an innovation policy: Where do we stand?","authors":"Olga Chiappinelli , Leonardo M. Giuffrida , Giancarlo Spagnolo","doi":"10.1016/j.ijindorg.2025.103157","DOIUrl":"10.1016/j.ijindorg.2025.103157","url":null,"abstract":"<div><div>Scholars and policymakers have long recognized the potential of public procurement as an industrial policy tool to incentivize innovation. However, it remains unclear to what extent this potential has been realized and what measures should be implemented to maximize performance. This paper surveys the economic literature on public procurement of innovation (PPI) to take stock of this debate. We discuss the existing research on four broad questions: i) Does PPI spur innovation? ii) How should PPI be designed to best spur innovation? iii) What barriers hinder the implementation of PPI? iv) What is the role of PPI in the innovation policy mix? We conclude that PPI can be an effective innovation policy, but that further investigation is needed for a more solid assessment. We highlight the areas where additional research is most needed and discuss policy implications for current global challenges.</div></div>","PeriodicalId":48127,"journal":{"name":"International Journal of Industrial Organization","volume":"100 ","pages":"Article 103157"},"PeriodicalIF":1.7,"publicationDate":"2025-03-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143578131","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-03DOI: 10.1016/j.ijindorg.2025.103156
Michael Waterson
The purpose of this short paper is simply to outline and comment upon Keith Cowling's thinking and writings on industrial policy/ industrial strategy, Keith being an early proponent for the pursuit of industrial policy.
{"title":"Keith Cowling and industrial policy","authors":"Michael Waterson","doi":"10.1016/j.ijindorg.2025.103156","DOIUrl":"10.1016/j.ijindorg.2025.103156","url":null,"abstract":"<div><div>The purpose of this short paper is simply to outline and comment upon Keith Cowling's thinking and writings on industrial policy/ industrial strategy, Keith being an early proponent for the pursuit of industrial policy.</div></div>","PeriodicalId":48127,"journal":{"name":"International Journal of Industrial Organization","volume":"100 ","pages":"Article 103156"},"PeriodicalIF":1.7,"publicationDate":"2025-03-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143562471","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-01DOI: 10.1016/j.ijindorg.2025.103148
Klaus Gugler, Florian Szücs, Ulrich Wohak
We evaluate the impact of big-tech acquisitions on the incentives for venture capital (VC) investment and innovation. Using data on several hundred acquisitions by Google, Apple, Facebook, Amazon and Microsoft (GAFAM), we study the evolution of VC investment and patenting in affected technology fields relative to control groups. The results show a clear negative impact on VC investment, while the effect on innovation depends on the acquirer and period. Over time, the treatment effects on both outcomes improve, as GAFAM firms' product and tech-portfolios become more similar. Yet, around 14% of acquisitions impact both metrics negatively.
{"title":"Start-up acquisitions, venture capital and innovation: A comparative study of Google, Apple, Facebook, Amazon and Microsoft","authors":"Klaus Gugler, Florian Szücs, Ulrich Wohak","doi":"10.1016/j.ijindorg.2025.103148","DOIUrl":"10.1016/j.ijindorg.2025.103148","url":null,"abstract":"<div><div>We evaluate the impact of big-tech acquisitions on the incentives for venture capital (VC) investment and innovation. Using data on several hundred acquisitions by Google, Apple, Facebook, Amazon and Microsoft (GAFAM), we study the evolution of VC investment and patenting in affected technology fields relative to control groups. The results show a clear negative impact on VC investment, while the effect on innovation depends on the acquirer and period. Over time, the treatment effects on both outcomes improve, as GAFAM firms' product and tech-portfolios become more similar. Yet, around 14% of acquisitions impact both metrics negatively.</div></div>","PeriodicalId":48127,"journal":{"name":"International Journal of Industrial Organization","volume":"99 ","pages":"Article 103148"},"PeriodicalIF":1.7,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143509794","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-26DOI: 10.1016/j.ijindorg.2025.103149
Xiaodong Du
We document significant inertia in farmers' crop insurance choices using a large panel of farm insurance records. Farmers often retain their previous year's plans, even after substantial shocks. We quantify inertia as the cost of switching plans in a discrete choice framework, incorporating an inertia indicator along with plan-specific attributes such as premiums, subsidies, and expected indemnities. These attributes are constructed based on individual farm characteristics. Our analysis estimates the average switching cost at approximately $10.9 per acre, comparable to the average per-acre premium for the yield insurance plan (APH) at 65% coverage and the revenue insurance plan (CRC) at 55% coverage. Explicit and implicit switching costs, information friction, and inattention contribute to this inertia.
{"title":"Inertia in the U.S. federal crop insurance market","authors":"Xiaodong Du","doi":"10.1016/j.ijindorg.2025.103149","DOIUrl":"10.1016/j.ijindorg.2025.103149","url":null,"abstract":"<div><div>We document significant inertia in farmers' crop insurance choices using a large panel of farm insurance records. Farmers often retain their previous year's plans, even after substantial shocks. We quantify inertia as the cost of switching plans in a discrete choice framework, incorporating an inertia indicator along with plan-specific attributes such as premiums, subsidies, and expected indemnities. These attributes are constructed based on individual farm characteristics. Our analysis estimates the average switching cost at approximately $10.9 per acre, comparable to the average per-acre premium for the yield insurance plan (APH) at 65% coverage and the revenue insurance plan (CRC) at 55% coverage. Explicit and implicit switching costs, information friction, and inattention contribute to this inertia.</div></div>","PeriodicalId":48127,"journal":{"name":"International Journal of Industrial Organization","volume":"100 ","pages":"Article 103149"},"PeriodicalIF":1.7,"publicationDate":"2025-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143510376","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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