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on Industrial Organization |
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Issue of 2012‒12‒10
five papers chosen by |
| By: | Lindstädt, Nadine; Budzinski, Oliver |
| Abstract: | Newspapers have been experiencing declining circulation figures and diminishing advertising revenues for several years - both effects might pose a threat to the continuing existence of (print) newspapers. In an earlier paper, Lindstädt & Budzinski (2011) argued from a theoretical viewpoint that industryspecific patterns exist that determine substitution or complementation effects between internet and newspaper advertising. It was argued that retail advertising, in particular, may offer a niche for regional/local newspapers that can be expected to present a sustainable segment of complementarity along with the otherwise mostly substitutional advertising markets. This paper empirically tests these hypotheses by analyzing advertising spending data for newspaper and internet display advertising of 13 different industries in the U.S. from 2001-2010. We find evidence for some of the hypotheses. Whereas some industries showed clear substitution effects between internet display and newspaper advertising, the majority of our hypotheses could be only partly rejected: newspaper substitution effects could be observed, however, in the direction to traditional media platforms instead of internet display advertising. For two retail-sub-industries, the hypotheses could not be rejected for the analyzed period. -- |
| Keywords: | media economics,advertising,complementation,substitution,newspapers,internet |
| JEL: | L82 A20 L13 M21 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuiedp:74&r=ind |
| By: | Guerrazzi, Marco |
| Abstract: | In this note, I derive the asymptotic relation verified by oligopolists' iso-profit curves within Cournot's game. Thereafter, I provide an economic rationale for such a mathematical relation. The results of this exploration suggest that for each firm the asymptotes of the iso-profit curves convey the boundaries beyond which output competitors become net purchasers of the good supplied in the market. |
| Keywords: | Cournot's Game; Nash Equilibrium; Asymptotes |
| JEL: | C72 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42761&r=ind |
| By: | Marc Escrihuela Villar (Universitat de les Illes Balears) |
| Abstract: | In this paper we investigate the connection between cost asymmetries and the sustainability of collusion within the context of a infinitely repeated Cournot duopoly. We assume that firms are able to coordinate on distinct output levels than the unrestricted joint profit maximization outcome. We show that, in our model, regardless of the degree of cost asymmetry, at least some collusion is always sustainable if firms are patient enough. We also endogenize the degree of collusion and show that it has an upper bound determined by the most inefficient firm. |
| Keywords: | Collusion; Sustainability; Asymmetry |
| JEL: | L11 L13 L41 D43 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ubi:deawps:47&r=ind |
| By: | Ajay Bhaskarabhatla; Enrico Pennings |
| Abstract: | We formulate a simple model of optimal defensive disclosure by a dominant firm facing uncertain antitrust enforcement and test its implications using unique data on defensive disclosures and patents by IBM. Our results indicate that stronger antitrust enforcement leads to more defensive disclosure, that quality inventions are also disclosed defensively, and that defensive disclosure served as an alternative, but less successful, mechanism to patenting at IBM in appropriating returns from R&D. We extend our analysis to two other exceptionally large firms with defensive-disclosure activity, AT&T and Xerox, and show that their patenting propensity declined under increased antitrust enforcement relative to other firms in the industry. Overall, we show how these firms used defensive disclosure as a strategy to balance the benefits of patenting with the costs of uncertain antitrust enforcement. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:12-08&r=ind |
| By: | Haucap, Justus; Heimeshoff, Ulrich; Jovanovic, Dragan |
| Abstract: | The German reserve power market was subject to important regulatory changes in recent years. A new market design was created by synchronization and interconnection of the four control areas. In this paper, we analyze whether or not the reforms led to lower prices for minute reserve power (MRP). In contrast to existing papers, we use a unique panel dataset to account for unobserved heterogeneity between the four German regional markets. Moreover, we control for endogeneity by using weather data as instruments for electricity spot market prices. We find that the reforms were jointly successful in decreasing MRP prices leading to substantial cost savings for the transmission system operators. -- |
| Keywords: | Competition,Frequency Control,Minute Reserve Power,Regulation,Productive Efficiency,Welfare |
| JEL: | C33 C36 L59 L94 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:75&r=ind |