{"title":"Resale Price Maintenance in a Successive Monopoly Model*","authors":"Markus Dertwinkel-Kalt, Christian Wey","doi":"10.1111/joie.12368","DOIUrl":"10.1111/joie.12368","url":null,"abstract":"<p>We explain why a manufacturer may impose a minimum resale price in a successive monopoly setting. Our argument relies on the retailer having noncontractible choice variables such as the price of a substitute good and/or the retailer's service effort. Our explanation for minimum resale prices is empirically distinguishable from alternative justifications that rely, for instance, on retailer competition and service free riding among retailers. Whether a min RPM benefits or harms consumers depends on its effects: if it softens competition with the substitute product, it tends to harm consumers, and if it secures service provision, it tends to benefit consumers.</p>","PeriodicalId":47963,"journal":{"name":"Journal of Industrial Economics","volume":"72 2","pages":"729-761"},"PeriodicalIF":1.3,"publicationDate":"2023-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/joie.12368","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138496897","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Secret Bilateral Forward Contracting*","authors":"Geert Van Moer","doi":"10.1111/joie.12372","DOIUrl":"10.1111/joie.12372","url":null,"abstract":"<p>I analyze secret bilateral forward contracting in a Cournot oligopoly. A secret bilateral forward contract affects the production quantities of the firms which are party to the contract but not of the outsiders. On the one hand, forward contracts facilitate for heterogeneous firms to rationalize production across facilities. On the other hand, firms also consider how forward contracting affects their combined production. I show that the spot market is less concentrated than the ownership of dispatchable facilities in the industry. Furthermore, the ownership distribution of nondispatchable facilities is irrelevant for consumer welfare. I discuss implications for policy in electricity markets.</p>","PeriodicalId":47963,"journal":{"name":"Journal of Industrial Economics","volume":"72 2","pages":"807-847"},"PeriodicalIF":1.3,"publicationDate":"2023-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/joie.12372","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138496898","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Risk Aversion and Double Marginalization*","authors":"Soheil Ghili, Matt Schmitt","doi":"10.1111/joie.12369","DOIUrl":"10.1111/joie.12369","url":null,"abstract":"<p>In vertical markets, eliminating double marginalization with a two-part tariff may not be possible due to risk aversion. Under uncertain demand, contracts with large fixed fees expose the downstream firm to more risk than contracts that are more reliant on variable fees. In equilibrium, contracts may thus rely on variable fees, giving rise to double marginalization. Counterintuitively, however, we show that increased demand risk or risk aversion can actually <i>mitigate</i> double marginalization. We also characterize several sufficient conditions under which increased risk or risk aversion is guaranteed to exacerbate double marginalization. We conclude by discussing potential applications and extensions.</p>","PeriodicalId":47963,"journal":{"name":"Journal of Industrial Economics","volume":"72 2","pages":"762-806"},"PeriodicalIF":1.3,"publicationDate":"2023-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138496896","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Productivity Effects Of Corporate Diversification*","authors":"Germán Bet","doi":"10.1111/joie.12370","DOIUrl":"10.1111/joie.12370","url":null,"abstract":"<p>This paper studies the productivity effects of corporate diversification. I estimate a model that allows diversification decisions to affect future productivity. I apply the model to a panel of U.S. manufacturing firms to measure the impact of diversification on productivity. My estimates suggest that diversification plays a key role in explaining differences in productivity across productive units and time. The average productivity effect of diversification is estimated to be positive at the productive unit level. However, the effect varies considerably across productive units and sectors of activity, depending crucially on already attained productivity.</p>","PeriodicalId":47963,"journal":{"name":"Journal of Industrial Economics","volume":"72 2","pages":"685-728"},"PeriodicalIF":1.3,"publicationDate":"2023-11-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138496895","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Privacy Regulation and Quality-Enhancing Innovation*","authors":"Yassine Lefouili, Leonardo Madio, Ying Lei Toh","doi":"10.1111/joie.12374","DOIUrl":"10.1111/joie.12374","url":null,"abstract":"<p>We analyze how a privacy regulation taking the form of a cap on information disclosure affects quality-enhancing innovation incentives by a monopolist—who derives revenues solely from disclosing user data to third parties—and consumer surplus. If the share of privacy-concerned users is sufficiently small, privacy regulation has a negative effect on innovation and may harm users. However, if the share of privacy-concerned users is sufficiently large, privacy regulation has a positive effect on innovation. In this case, there is no trade-off between privacy and innovation and users always benefit from privacy regulation.</p>","PeriodicalId":47963,"journal":{"name":"Journal of Industrial Economics","volume":"72 2","pages":"662-684"},"PeriodicalIF":1.3,"publicationDate":"2023-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138496894","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Search and Competition Under Product Quality Uncertainty*","authors":"Yongmin Chen","doi":"10.1111/joie.12365","DOIUrl":"10.1111/joie.12365","url":null,"abstract":"<p>I review models of consumer search and competition when product quality is uncertain and differs across firms. Although firms are vertically—and possibly also horizontally—differentiated, an appropriate symmetric price equilibrium with optimal consumer search can be neatly characterized. I propose a “random-quality” framework that unifies these models and discuss their insights on the operation of consumer search markets, focusing on (i) online advertising and search through platforms, (ii) the welfare effects of entry in search markets, and (iii) the role of quality observability under search frictions. I suggest directions for further research on these and related topics.</p>","PeriodicalId":47963,"journal":{"name":"Journal of Industrial Economics","volume":"72 2","pages":"633-661"},"PeriodicalIF":1.3,"publicationDate":"2023-11-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138496893","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Unobserved Worker Quality and Inter-Industry Wage Differentials*","authors":"Suqin Ge, João Macieira","doi":"10.1111/joie.12361","DOIUrl":"10.1111/joie.12361","url":null,"abstract":"<p>This study quantitatively assesses two alternative explanations for inter-industry wage differentials: worker heterogeneity in the form of unobserved quality and firm heterogeneity in the form of a firm's willingness to pay (WTP) for workers' productive attributes. Building on hedonic models of differentiated product demand, we develop an empirical hedonic model of labor demand and apply a two-stage nonparametric procedure to recover worker and firm heterogeneities. In the first stage we recover unmeasured worker quality by estimating market-specific hedonic wage functions nonparametrically. In the second stage we infer each firm's WTP parameters for worker attributes by using first-order conditions from the demand model. We apply our approach to quantify inter-industry wage differentials on the basis of individual data from the NLSY79 and find that worker quality accounts for approximately two thirds of the inter-industry wage differentials.</p>","PeriodicalId":47963,"journal":{"name":"Journal of Industrial Economics","volume":"72 1","pages":"459-515"},"PeriodicalIF":1.3,"publicationDate":"2023-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/joie.12361","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136229846","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Vertical Contracts and Downstream Entry*","authors":"Chrysovalantou Milliou, Emmanuel Petrakis","doi":"10.1111/joie.12367","DOIUrl":"10.1111/joie.12367","url":null,"abstract":"<p>We study the implications of different contractual forms in a market with an incumbent upstream monopolist and free downstream entry. We show that traditional conclusions regarding the desirability of linear contracts radically change when entry in the downstream market is endogenous rather than exogenous. By triggering more entry than two-part tariffs, wholesale price contracts can generate higher aggregate output, consumer surplus, and welfare. In light of this, the upstream monopolist may prefer to trade with wholesale price contracts as well as to give up part of its bargaining power when it is high.</p>","PeriodicalId":47963,"journal":{"name":"Journal of Industrial Economics","volume":"72 1","pages":"598-629"},"PeriodicalIF":1.3,"publicationDate":"2023-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/joie.12367","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138496890","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Alcohol Prohibition and Pricing at the Pump*","authors":"Kai Fischer","doi":"10.1111/joie.12366","DOIUrl":"10.1111/joie.12366","url":null,"abstract":"<p>Firms often sell a transparent base product and a valuable add-on. If only some consumers are aware of the latter, the add-on's effect on the base product's price will be ambiguous. Cross-subsidization between products to bait uninformed consumers might lower, intrinsic utility from the add-on for informed consumers might raise the price. We study this trade-off in the gasoline market by exploiting an alcohol sales prohibition at stations as an exogenous shifter of add-on availability. Gasoline margins drop by 5% during the prohibition. The effect is mediated by shop variety and competition. Using traffic data, we unveil sizeable consumer-side reactions.</p>","PeriodicalId":47963,"journal":{"name":"Journal of Industrial Economics","volume":"72 1","pages":"548-597"},"PeriodicalIF":1.3,"publicationDate":"2023-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/joie.12366","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138496892","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Michele Bisceglia, Jorge Padilla, Joe Perkins, Salvatore Piccolo
{"title":"Optimal Exit Policy with Uncertain Demand*","authors":"Michele Bisceglia, Jorge Padilla, Joe Perkins, Salvatore Piccolo","doi":"10.1111/joie.12364","DOIUrl":"10.1111/joie.12364","url":null,"abstract":"<p>In a framework where entrants must make sunk investment decisions with uncertain returns and have private demand information, we show that the relationship between innovation and exit value is non-monotone and features an inverted U-shaped pattern. Consumer surplus is maximised at the lowest exit value that incentivises the investment. These insights are applied to optimal merger policy. An entrant is more willing to innovate to be acquired afterwards, even if it has no bargaining power. This innovation-for-buyout effect implies that an entrant is less likely to leave the market under a lenient than a strict merger policy.</p>","PeriodicalId":47963,"journal":{"name":"Journal of Industrial Economics","volume":"72 1","pages":"516-547"},"PeriodicalIF":1.3,"publicationDate":"2023-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138496891","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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