Trade Costs, International Competition and Selection: The Effects of Unionisation on Market Size

Within a two-country model of international trade in which heterogeneous firms face firm-specific unions, we study the effects of different forms of trade liberalisation on market structure and competitive selection in the presence of inter-country asymmetries in size and labour market institutions. For given levels of trade openness, an increase in a country’s relative unions’ strength reduces the average productivity of its domestic producers but increases that of its exporters. Whilst an unfavourable union power differential, by increasing wages, weakens a country’s firms’ competitive position, the higher wages reinforce standard market access mechanisms to give rise to aggregate income effects. When the initial levels of trade openness are sufficiently low, this ‘expansionary’ aggregate effect can attract industry in the country with stronger unions and also result in an increase in the extensive margin of exports. For sufficiently large inter-country differences in the bargaining power of unions, trade liberalization can then result in a pro-variety effect, with an increase in the total availability of varieties to consumers in both countries, regardless of there being inter-country differences in size.

(No)competition in the Spanish retailing gasoline market: a variance filter approach

Various methodologies in economic literature have been used to analyse the international hydrocarbon retail sector. Nevertheless at a Spanish level these studies are much more recent and most conclude that generally there is no effective competition present in this market, regardless of the approach used. In this paper, in order to analyse the price levels in the Spanish petrol market, our starting hypothesis is that in uncompetitive markets the prices are higher and the standard deviation is lower. We use weekly retail petrol price data from the ten biggest Spanish cities, and apply Markov chains to fill the missing values for petrol 95 and diesel, and we also employ a variance filter. We conclude that this market demonstrates reduced price dispersion, regardless of brand or city.

Market Competition and Lower Tier Incentives

The relationship between competition and performance-related pay has been analyzed in single-principal-single-agent models. While this approach yields good predictions for managerial pay schemes, the predictions fail to apply for employees at lower tiers of a firm's hierarchy. In this paper, a principal-multi-agent model of incentive pay is developed which makes it possible to analyze the effect of changes in the competitiveness of markets on lower tier incentive payment schemes. The results explain why the payment schemes of agents located at low and mid tiers are less sensitive to changes in competition when aggregated firm data is used. Journal of Economic Literature classiffication numbers: D82, J21, L13, L22. Keywords: Cournot Competition, Contract Delegation, Moral Hazard, Entry, Market Size, Wage Cost.

Competition for FDI and profit shifting: On the effects of subsidies and tax breaks

We investigate competition for FDI within a region when a foreign multinational rm can profitably exploit differences in statutory corporate tax rates by shifting taxable pro ts to lower-tax jurisdictions. In such framework we show that targeted tax competition may lead to higher welfare for the region as a whole than lump-sum subsidies when the difference in statutory corporate tax rates and/or their average is high enough. Tax competition is also preferable from an efficiency point of view (overall surplus) by changing the firm's investment decision when pro t shifting motivations induce the rm to locate in the (before tax) least pro table country.

Efficient Competition through Cheap Talk: Competing Auctions and Competitive Search without Ex Ante Price

We consider a frictional two-sided matching market in which one side uses public cheap talk announcements so as to attract the other side. We show that if the first-price auction is adopted as the trading protocol, then cheap talk can be perfectly informative, and the resulting market outcome is efficient, constrained only by search frictions. We also show that the performance of an alternative trading protocol in the cheap-talk environment depends on the level of price dispersion generated by the protocol: If a trading protocol compresses (spreads) the distribution of prices relative to the first-price auction, then an efficient fully revealing equilibrium always (never) exists. Our results identify the settings in which cheap talk can serve as an efficient competitive instrument, in the sense that the central insights from the literature on competing auctions and competitive search continue to hold unaltered even without ex ante price commitment.

Legal Uncertainty, Competition Law Enforcement Procedures and Optimal Penalties

In this paper we make three contributions to the literature on optimal Competition Law enforcement procedures. The first (which is of general interest beyond competition policy) is to clarify the concept of “legal uncertainty”, relating it to ideas in the literature on Law and Economics, but formalising the concept through various information structures which specify the probability that each firm attaches – at the time it takes an action – to the possibility of its being deemed anti-competitive were it to be investigated by a Competition Authority. We show that the existence of Type I and Type II decision errors by competition authorities is neither necessary nor sufficient for the existence of legal uncertainty, and that information structures with legal uncertainty can generate higher welfare than information structures with legal certainty – a result echoing a similar finding obtained in a completely different context and under different assumptions in earlier Law and Economics literature (Kaplow and Shavell, 1992). Our second contribution is to revisit and significantly generalise the analysis in our previous paper, Katsoulacos and Ulph (2009), involving a welfare comparison of Per Se and Effects- Based legal standards. In that analysis we considered just a single information structure under an Effects-Based standard and also penalties were exogenously fixed. Here we allow for (a) different information structures under an Effects-Based standard and (b) endogenous penalties. We obtain two main results: (i) considering all information structures a Per Se standard is never better than an Effects-Based standard; (ii) optimal penalties may be higher when there is legal uncertainty than when there is no legal uncertainty.

Asynchronous growth and competition in a two-sex age-structured population model

Asynchronous exponential growth has been extensively studied in population dynamics. In this paper we find out the asymptotic behaviour in a non-linear age-dependent model which takes into account sexual reproduction interactions. The main feature of our model is that the non-linear process converges to a linear one as the solution becomes large, so that the population undergoes asynchronous growth. The steady states analysis and the corresponding stability analysis are completely made and are summarized in a bifurcation diagram according to the parameter R0. Furthermore the effect of intraspecific competition is taken into account, leading to complex dynamics around steady states.

Bilateral oligopoly and quantity competition

Bilateral oligopoly is a strategic market game with two commodities, allowing strategic behavior on both sides of the market. When the number of buyers is large, such a game approximates a game of quantity competition played by sellers. We present examples which show that this is not typically a Cournot game. Rather, we introduce an alternative game of quantity competition (the market share game) and, appealing to results in the literature on contests, show that this yields the same equilibria as the many-buyer limit of bilateral oligopoly, under standard assumptions on costs and preferences. We also show that the market share and Cournot games have the same equilibria if and only if the price elasticity of the latter is one. These results lead to necessary and sufficient conditions for the Cournot game to be a good approximation to bilateral oligopoly with many buyers and to an ordering of total output when they are not satisfied.

Still in the Era of Area Studies? Political-Scientific Perspectives on European Competition Policy in the 2000s

This note reviews the political-scientific literature on European competition policy (ECP) in the 2000s. Based on a data set extracted from four well-known journals, and using an upfront methodology and explicit criteria, it analyzes the literature both quantitatively and qualitatively. On the quantitative side, it shows that, although a few sub-policy areas are still neglected, ECP is not the under-researched policy it used to be. On the qualitative side, the literature has greatly improved since the 1990s: Almost all articles now present a clear research question, and most advance specific theoretical claims/hypotheses. Yet, improvements can be made on research design, statistical testing, and, above all, state-of-the-art theorizing (e.g. in the game-theoretical treatment of delegation problems). Indeed, it is paradoxical that ECP specialists do not pay more attention to theoretical questions which are so central to the actual policy area they study.

Competition between TV platforms

The aim of this paper is to identify the factors that affect the market penetration of pay television by studying the competition that exists between three types of technology (satellite, cable and ADSL). We distinguish three groups of factors: the level of market competition, the level of competition in the industry and the quality of the product being offered. Our results seem to indicate that as market concentration increases, the television service can achieve greater penetration. This relationship is specifically captured by the level of intra- and inter-platform competition. We also examine the relationship between free television channels and pay television and find that as the amount of time dedicated to the broadcasting of advertising by the former increases, the number of subscribers to pay TV rises. Finally, we examine product quality by introducing the effect of holding the rights to broadcast Professional Football League matches and an HBO or Showtime produced series. Our results suggest that these variables are critical for the penetration of pay television.

Bilateral symmetry of radial pulse in high-level tennis players: implications for the validity of central aortic pulse wave analysis.

BACKGROUND: Reconstruction of the central aortic pressure wave from the noninvasive recording of the radial pulse with applanation tonometry has become a standard tool in the field of hypertension. It is not presently known whether recording the radial pulse on the dominant or the nondominant side has any effect on such reconstruction. METHOD: We carried out radial applanation tonometry on both forearms in young, healthy, male volunteers, who were either sedentary (n = 11) or high-level tennis players (n = 10). The purpose of including tennis players was to investigate individuals with extreme asymmetry between the dominant and nondominant upper limb. RESULTS: In the sedentary individuals, forearm circumference and handgrip strength were slightly larger on the dominant (mean +/- SD respectively 27.9 +/- 1.5 cm and 53.8 +/- 10 kg) than on nondominant side (27.3 +/- 1.6 cm, P < 0.001 vs. dominant, and 52.1 +/- 11 kg, P = NS). In the tennis players, differences between sides were more conspicuous (forearm circumference: dominant 28.0 +/- 1.7 cm nondominant 26.4 +/- 1.5 cm, P < 0.001; handgrip strength 61.4 +/- 10.8 vs. 53.4 +/- 9.7 kg, P < 0.001). We found that in both sedentary individuals and tennis players, the radial pulse had identical shape on both sides and, consequently, the reconstructed central aortic pressure waveforms, as well as derived indices of central pulsatility, were not dependent on the side where applanation tonometry was carried out. CONCLUSION: Evidence from individuals with maximal asymmetry of dominant vs. nondominant upper limb indicates that laterality of measurement is not a methodological issue for central pulse wave analysis carried out with radial applanation tonometry.

A stepwise protocol to coat aAPC beads prevents out-competition of anti-CD3 mAb and consequent experimental artefacts.

Artificial antigen-presenting cells (aAPC) are widely used for both clinical and basic research applications, as cell-based or bead-based scaffolds, combining immune synapse components of interest. Adequate and controlled preparation of aAPCs is crucial for subsequent immunoassays. We reveal that certain proteins such as activatory anti-CD3 antibody can be out-competed by other proteins (e.g. inhibitory receptor ligands such as PDL1:Fc) during the coating of aAPC beads, under the usually performed coating procedures. This may be misleading, as we found that decreased CD8 T cell activity was not due to inhibitory receptor triggering but rather because of unexpectedly low anti-CD3 antibody density on the beads upon co-incubation with inhibitory receptor ligands. We propose an optimized protocol, and emphasize the need to quality-control the coating of proteins on aAPC beads prior to their use in immunoassays.

Some Considerations Concerning Regulation and Competition in the Port Sector

The aim of this paper is to discuss the circumstances in which the process of competition between ports takes place in Spain − circumstances arising from the way the port system is currently set up and from the regulations governing it. The importance of this matter lies both in the fact that intensified competition between ports is the way to set about boosting the efficiency of the Spanish port sector and in the relevance of this business to the economies of the regions in which the ports are located. It is precisely for this reason that the reform instituted in 1992 aimed to combine balanced development of the national port system with the defence of the interests of autonomous regions. To this end the current regulatory framework provides for the possibility of port authorities drawing up their own competitive strategies, but makes their implementation conditional upon approval of their business plan by the Spanish state port authority. The latter body coordinates the national port system to ensure the guidelines set by the central government authorities are followed in the field of transport. However, the scale of the differences which exist among both the size of facilities and their relevant markets on the one hand, and the financial and economic circumstances of each of them on the other, suggest that each port authority's needs must be very different. Consequently, their competitive strategies must also be very different. It is therefore valid to ask whether coping with this diversity calls for different guidelines to regulate their freedom of action. Key words: Competition, regulation, port sector JEL classification numbers: L1, L5, L9