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Economics

Selected Works

Oligopoly

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Full-Text Articles in Social and Behavioral Sciences

Simulating Hospital Merger Simulations, David J. Balan, Keith Brand Dec 2017

Simulating Hospital Merger Simulations, David J. Balan, Keith Brand

David J. Balan

We assess the performance of three hospital merger simulation methods by means of a Monte Carlo experiment. We fi#12;rst specify a rich theoretical model of hospital markets and use it to generate "true" price eff#11;ects of a large number of hospital mergers. We then use the theoretical model to generate the data that would be available in a real-world prospective merger analysis and apply the merger simulation methods to those data. Finally, we compare the predictions of the merger simulation methods to the true price eff#11;ects. While there is some heterogeneity in performance, all three simulation methods perform reasonably well.

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All-Units Discounts As A Partial Foreclosure Device, Yong Chao, Guofu Tan Dec 2014

All-Units Discounts As A Partial Foreclosure Device, Yong Chao, Guofu Tan

Yong Chao

All-units discounts (AUD) are pricing schemes that lower a buyer’s marginal price on every unit purchased when the buyer’s purchase exceeds or is equal to a pre-specified threshold. The AUD and related conditional rebates are commonly used in both final-goods and intermediate-goods markets. Although the existing literature has thus far focused on interpreting the AUD as a price discrimination tool, investment incentive program, or rent-shifting instrument, the antitrust concerns on the AUD and related conditional rebates are often their plausible exclusionary effects.

In this article, we investigate strategic effects of volume-threshold based AUD used by a dominant firm in the …

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Buyer Alliances As Countervailing Power In Wic Infant-Formula Auctions, David E. Davis Jul 2014

Buyer Alliances As Countervailing Power In Wic Infant-Formula Auctions, David E. Davis

David E. Davis

State agencies in infant-formula procurement auctions receive lower bids when they are in buyer alliances than when they are unallied. The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) uses an auction to procure infant formula. Manufacturers bid on the right to be an agency’s sole supplier by offering a rebate on formula sold through WIC. Agencies frequently join together in buyer alliances. An empirical estimation shows that bids are lower to alliances and that lower prices result because alliances are heterogeneous. Results suggest that when heterogeneity is not controlled, bids decline with alliance size, which has policy …

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Buyer Alliances As Countervailing Power In Wic Infant-Formula Auctions, David E. Davis Jul 2014

Buyer Alliances As Countervailing Power In Wic Infant-Formula Auctions, David E. Davis

David E. Davis

State agencies in infant-formula procurement auctions receive lower bids when they are in buyer alliances than when they are unallied. The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) uses an auction to procure infant formula. Manufacturers bid on the right to be an agency’s sole supplier by offering a rebate on formula sold through WIC. Agencies frequently join together in buyer alliances. An empirical estimation shows that bids are lower to alliances and that lower prices result because alliances are heterogeneous. Results suggest that when heterogeneity is not controlled, bids decline with alliance size, which has policy …

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Strategic Effects Of Three-Part Tariffs Under Oligopoly, Yong Chao Jul 2013

Strategic Effects Of Three-Part Tariffs Under Oligopoly, Yong Chao

Yong Chao

The distinct element of a three-part tariff, compared with linear pricing or a two-part tariff, is its quantity target within which the marginal price is zero. This quantity target instrument enriches the firm's strategy set in dictating the competition to a specific level, even in the absence of usual price discrimination motive. With general differentiated linear demand system, the competitive effect of a three-part tariff in contrast to linear pricing depends on the degree of substitutability between products: competition is intensified when two products are more differentiated, yet softened when two products are more substitutable.

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Regional Unemployment And Productivity In Europe, Luca De Benedictis, Roberto Basile May 2008

Regional Unemployment And Productivity In Europe, Luca De Benedictis, Roberto Basile

Luca De Benedictis

We analyse the relationship between regional unemployment and labour productivity in Europe, basing our empirical analysis on the predictions of a Neary-type General Oligopolistic Equilibrium trade model with efficiency-wages. Using semiparametric and dynamic panel data estimators and controlling for other factors, we give evidence of a nonlinear relationship between productivity and regional unemployment in Europe: with a level of productivity smaller than a certain threshold, this relationship is negative, while no relation occurs in the case of higher productivity regions. This evidence proves an important role of a wage-floor (induced by efficiency wages and exacerbated by institutional factors) under which …

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