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Full-Text Articles in Industrial Organization
Antitrust And The Costs Of Movement, Herbert J. Hovenkamp
Antitrust And The Costs Of Movement, Herbert J. Hovenkamp
All Faculty Scholarship
Antitrust is rightfully concerned about the structure of markets as well as the bargaining that occurs in them. As a result, the absolute cost of redeploying resources can be just as important as the transaction costs of arranging for their movement. This paper examines several broad themes in antitrust, considering the role of various assumptions about the costs of getting resources moved toward superior positions and the ability of the antitrust system to facilitate this movement. Part II very briefly examines structuralism as a theory underlying antitrust enforcement, particularly its assumptions about the difficulty and costs of moving resources. Harvard …
Price Determination In A Competitive Industry With Costly Information And A Production Lag, Reuven Glick, Clas Wihlborg
Price Determination In A Competitive Industry With Costly Information And A Production Lag, Reuven Glick, Clas Wihlborg
Business Faculty Articles and Research
We analyze the role of information for price and output adjustment when competitive firms with rational expectations cannot directly distinguish between industrywide and firm-specific cost disturbances. Firms may become informed about industrywide cost conditions by acquiring information at a cost. The sensitivity of price and output to cost disturbances decreases as more firms choose to purchase information. The equilibrium industry share of informed firms increases as the cost of information falls and total cost variability increases. The equilibrium share of informed firms is largest when there is a comparable degree of variability in both industrywide and firm-specific costs.