Three essays on prices and selection

Competitive Market Segmentation Abstract In a two-firm model where each firm sells a high-quality and a low-quality version of a product, customers differ with respect to their brand preferences and their attitudes towards quality. We show that the standard result of quality-independent markups crucially depends on the assumption that the customers' valuation of quality is identical across firms. Once we relax this assumption, competition across qualities leads to second-degree price discrimination. We find that markups on low-quality products are higher if consuming a low-quality product involves a firm-specific disutility. Likewise, markups on high-quality products are higher if consuming a high-quality product creates a firm-specific surplus. Selection upon Wage Posting Abstract We discuss a model of a job market where firms announce salaries. Thereupon, they decide through the evaluation of a productivity test whether to hire applicants. Candidates for a job are locked in once they have applied at a given employer. Hence, such a market exhibits a specific form of the bargain-then-ripoff principle. With a single firm, the outcome is efficient. Under competition, what might be called "positive selection" leads to market failure. Thus our model provides a rationale for very small employment probabilities in some sectors. Exclusivity Clauses: Enhancing Competition, Raising Prices Abstract In a setting where retailers and suppliers compete for each other by offering binding contracts, exclusivity clauses serve as a competitive device. As a result of these clauses, firms addressed by contracts only accept the most favorable deal. Thus the contract-issuing parties have to squeeze their final customers and transfer the surplus within the vertical supply chain. We elaborate to what extent the resulting allocation depends on the sequence of play and discuss the implications of a ban on exclusivity clauses.

Sleep and wakefulness disturbances in Swiss pharmacy customers

BACKGROUND AND OBJECTIVE: Sleep disturbances are prevalent but often overlooked or underestimated. We suspected that sleep disorders might be particularly common among pharmacy customers, and that they could benefit from counselling. Therefore, we described the prevalence and severity of symptoms associated with sleep and wakefulness disorders among Swiss pharmacy customers, and estimated the need for counselling and treatment. METHODS: In 804 Swiss pharmacies (49% of all community pharmacies) clients were invited to complete the Stanford Sleep Disorders Questionnaire (SDQ), and the Epworth Sleepiness Scale (EPW). The SDQ was designed to classify symptoms of sleep and wakefulness into the four most prevalent disorders: sleep apnoea syndrome (SAS), insomnia in psychiatric disorders (PSY), periodic leg movement disorders/restless legs (RLS) and narcolepsy (NAR). Data were entered into an internet-linked database for analysis by an expert system as a basis for immediate counselling by the pharmacist. RESULTS: Of 4901 participants, 3238 (66.1%) were female, and 1663 (33.9%) were male. The mean age (SD) of females and males was 52.4 (18.05), and 55.1 (17.10) years, respectively. The percentages of female and male individuals above cut-off of SDQ subscales were 11.4% and 19.8% for sleep apnoea, 40.9% and 38.7% for psychiatric sleep disorders, 59.3% and 46.8% for restless legs, and 10.4% and 9.4% for narcolepsy respectively. The prevalence of an Epworth Sleepiness Scale score >11 was 16.5% in females, and 23.9% in males. Reliability assessed by Cronbach's alpha was 0.65 to 0.78 for SDQ subscales, and for the Epworth score. CONCLUSIONS: Symptoms of sleep and wakefulness disorders among Swiss pharmacy customers were highly prevalent. The SDQ and the Epworth Sleepiness Scale score had a satisfactory reliability to be useful for identification of pharmacy customers who might benefit from information and counselling while visiting pharmacies. The internet-based system proved to be a helpful tool for the pharmacist when counselling his customers in terms of diagnostic classification and severity of symptoms associated with the sleeping and waking state.

Board Overlap, Seat Accumulation and Share Prices

We examine the board overlap among firms listed in Switzerland. Collusion, managerial entrenchment, and financial participation cannot explain it. The overlap appears to be induced by banks and by the accumulation of seats by the most popular directors. We also document that seat accumulation is negatively related to firm value, possibly because of the conflicts of interest that multiple directorships induce and the time constraints directors face. Contrary to popular beliefs, however, the directors of traded firms do not generally hold more than one mandate in other traded firms. They do hold multiple seats in non-traded firms.