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Full-Text Articles in Econometrics
Entry Costs And Economies Of Scope In Multiproduct Firms' Decisions, Xosé-Luís Varela-Irimia
Entry Costs And Economies Of Scope In Multiproduct Firms' Decisions, Xosé-Luís Varela-Irimia
Xosé-Luís Varela-Irimia
This paper computes the scope economies associated to the commercialization of several product varieties by multiproduct firms, in a dynamic oligopoly setting. Goods are differentiated and firms decide on firm entry and exit, product entry and exit, quality and pricing. The model is applied to the Spanish automobile market. Results show moderate entry costs and substantial cost reductions when introducing a second product as compared to the first, indicating that multiproduct firms benefit from strong economies of scope when expanding their range of products. However, those economies disappear after five products have been introduced, suggesting a U-shaped curve for entry …
Asymmetric Dynamic Pricing In A Local Gasoline Retail Market, Felipe Balmaceda Assoc Prof., Paula Soruco
Asymmetric Dynamic Pricing In A Local Gasoline Retail Market, Felipe Balmaceda Assoc Prof., Paula Soruco
Felipe Balmaceda
Asymmetric-price adjustment is a common phenomenon in many markets around the world, particularly in retail gasoline markets. This paper studies the existence of this phenomenon in the retail gasoline market in the city of Santiago, Chile, using a data set of weekly gas station prices that covers a period of almost four years. We found that prices adjust asymmetrically, and the asymmetry is different for branded gas stations and unbranded stations. In addition, we found that the asymmetry for high-margin stations is statistically equivalent to that for low-margin stations. This evidence is suggestive of collusion as a rationale for the …