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on Industrial Organization |
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Issue of 2023‒12‒04
four papers chosen by |
| By: | Elhanan Helpman |
| Abstract: | Empirical studies have found that enhanced foreign competition can encourage or discourage innovation. To address this relationship, I examine a market structure in which a small number of large multi-product oligopolists compete with a large number of small single-product firms in the same industry. The single-product firms are short-lived while the multi-product firms live forever, and the large firms invest in innovation in order to enlarge their product spans. All firms export. I show that an increase in the competitiveness of foreign firms can increase or reduce innovation efforts of a large multi-product firm. Moreover, changes in the incentives to innovate can be different for more-productive and less-productive oligopolists. As a result, aggregate sectoral innovation may rise or decline, depending on the productivity distribution of the oligopolists. I also show that changes in short-term operating profits may not be aligned with changes in the incentives to invest in innovation. |
| JEL: | D43 F1 L1 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31840&r=ind |
| By: | Montag, Felix; Mamrak, Robin; Sagimuldina, Alina; Schnitzer, Monika |
| Abstract: | Pass-through determines how consumers respond to taxes. We investigate the impact of imperfect price information on pass-through of commodity taxes. Our theoretical model predicts that the pass-through rate increases with the share of well-informed consumers. Pass-through is higher for the minimum price, paid by well-informed consumers, than for the average price, paid by uninformed consumers. Moreover, passthrough to the average price is non-monotonic with respect to the number of sellers. An empirical analysis of multiple recent tax changes in the German and French retail fuel markets confirms our theoretical predictions. Our results have implications for tax policy and shed light on the relative effectiveness of Pigouvian taxes versus regulation. |
| Keywords: | pass-through, taxes, imperfect information, competition |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cbscwp:279798&r=ind |
| By: | Julien Guyot (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Akhil Rao; Sebastien Rouillon (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Orbital space enables many essential services, such as weather forecasting, global communication, navigation, Earth observation for environmental and agricultural management, and national security applications. Orbit use is increasingly defined by firms launching coordinated fleets—"constellations"—of satellites into low-Earth orbit. These firms operate in markets with few or no competitors, such as the market for broadband internet provision to rural areas. How will oligopolistic competition shape the allocation of orbital space? We analyze orbital-use patterns and economic welfare when two profit-maximizing firms operate satellite constellations with sophisticated collision avoidance systems. We compare this duopoly equilibrium to public utility constellations designed and regulated to maximize economic welfare from orbit use. We show that imperfect competition reduces economic welfare from orbit use by up to 12%—$1.1 billion USD—per year and distorts the allocation of orbital space. The nature of the distortion depends on the magnitude of constellation-related environmental damages. When damages are low, economic welfare is maximized by larger-than-equilibrium constellations. When damages are high, economic welfare is maximized by smaller-than-equilibrium constellations. Between the growing commercial and national interests in outer space and the importance of low-Earth orbit to space exploration, orbit-use management is likely to be a fruitful and policy-relevant area for economic research. We conclude with a discussion of future research directions in orbit-use management relevant to policymakers around the world. |
| Keywords: | Space economics, Satellites, Oligopoly, Common-pool resources, Game theory |
| Date: | 2023–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04255554&r=ind |
| By: | Hanxin Zhao |
| Abstract: | Green ammonia is poised to be a key part in the hydrogen economy. This paper discusses green ammonia supply chains from a higher-level industry perspective with a focus on market structures. The architecture of upstream and downstream supply chains are explored. Potential ways to accelerate market emergence are discussed. Market structure is explored based on transaction cost economics and lessons from the oil and gas industry. Three market structure prototypes are developed for different phases. In the infancy, a highly vertically integrated structure is proposed to reduce risks and ensure capital recovery. A restructuring towards a disintegrated structure is necessary in the next stage to improve the efficiency. In the late stage, a competitive structure characterized by a separation between asset ownership and production activities and further development of short-term and spot markets is proposed towards a market-driven industry. Finally, a multi-linear regression model is developed to evaluate the developed structures using a case in the gas industry. Results indicate that high asset specificity and uncertainty and low frequency lead to a more disintegrated market structure, and vice versa, thus supporting the structures designed. We assume the findings and results contribute to developing green ammonia supply chains and the hydrogen economy. |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2310.19498&r=ind |