Industrial Organization Commons^™

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 …

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

David E. Davis

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

David E. Davis

Bargaining In Hospital Merger Models, David J. Balan, Keith Brand

David J. Balan

Hospital prices for commercially-insured patients are generally set through bilateral negotiations with health insurance companies. Reflecting common industry practice, contemporary models of hospital/health insurer bargaining usually assume that multi-hospital systems bargain on an all-or-nothing basis. However, hospitals within systems may bargain separately, and a commitment to do so is sometimes put forward as a remedy for an otherwise anticompetitive merger. We analyze and compare the merger-induced changes in equilibrium prices in a Nash Bargaining framework under these two modes of bargaining. We show that, while the magnitude of price effects under either mode depends critically on the degree of pre-merger …

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.

Essays On Industrial Organization And Environmental Economics, Cristina Marie Reiser

Doctoral Dissertations

This dissertation consists of three chapters that examine how regulation by a central authority motivates changes in behavior.

Chapter 1 identifies the role of a tolerance policy as a manager’s regulatory mechanism which can deter worker misconduct in rank-order tournaments. When contestants’ actions cannot be perfectly monitored or doing so is prohibitively costly, misconduct takes place. This chapter develops a theoretical model in which contestants compete for a prize in a symmetric tournament and in which the organizer tolerates some level of misconduct. In addition to showing that zero tolerance does not minimize equilibrium misconduct, it also shows there exists …