barriers to entry and competitive behavior evidence from reforms of cable franchising regulations between 2005 and 2008 19 of the 50 states of the u s reformed the franchising process for cable television significantly easing entry into local markets using a differencein differences approach that exploits the staggered introduction of reforms we find that prices for basic service declined systematically by about 5 5 to 6 8 percent following the reforms but we find no statistically significant effect on average price for the more popular expanded basic service we also find that the reforms led to increased actual entry in reformed states by about 11 6 relative to non reformed states our analysis shows that the decline in price for basic service holds for markets that did not experience actual entry consistent with limit pricing by incumbents to control for potential state level shocks correlated with the reforms we undertake a sample split test examining changes in local markets which faced a greater threat of entry because they were close to a prominent second entrant we find larger declines in prices for both basic and expanded basic services in these markets our results are consistent with limit pricing models that predict incumbents respond to increased threat of entry and suggest that the reforms facilitated entry and modestly benefitted consumers in reformed states

the impact of the 1992 cable act on household demand and welfare i measure the benefit to households of the 1992 cable act in light of strategic responses by cable systems to the regulations mandated by the act a discrete choice differentiatedproduct model of household demand for all offered cable television services forms the basis of the analysis aggregation over households and service combinations to the level of the data permits estimation on a cross section of cable markets from before and after the act the results indicate that while the regulations mandated price reductions of 10 17 for cable services observed system responses yielded no change in household welfare post act changes in cable prices are responsible for most of the difference

the transition to digital television digital tv this paper studies the role of economic policy for the transition from analogue to digital television with particular attention to the switch off of the analogue terrestrial signal the analogue signal cannot be credibly switched off until almost all viewers have migrated to digital due to the policy objective of universal access to television but before switch off only part of the population can be reached with the digital signal in addition those who are reached need to spend more to upgrade their reception equipment than after switch off because the capacity to increase the power of the digital signal will be made available only then after reviewing the competitive structure and the role of government intervention in television markets we present the early experience of a number of industrialized countries in the transition to digital television we then formulate a micro econometric model of digital television adoption by individual viewers the model is calibrated to uk data and simulated to predict the impact of government policies on the take up of digital television policy makers can affect the speed of take up of digital television by 1 controlling the quality of the signals and the content of public service broadcasters 2 intervening in the market for digital equipment with subsidies and 3 publicizing the conditions and date of switch off of the analogue signal we find that if the analogue terrestrial signal is switched off only when certain aggregate adoption targets are reached strategic delays may arise and expectations may affect the success of the switch off policy jerome adda and marco ottaviani

an economic model of representative democracy this paper develops an approach to the study of democratic policy making where politicians are selected by the people from those citizens who present themselves as candidates for public office the approach has a number of attractive features first it is a conceptualization of a pure form of representative democracy in which government is by as well as of the people second the model is analytically tractable being able to handle multidimensional issue and policy spaces very naturally third it provides a vehicle for answering normative questions about the performance of representative democracy

new products quality changes and welfare measures computed from estimated demand systems this paper examines the construction of a price index based on an estimated demand system in principle the method examined can produce a price index that takes account of the introduction of new p

gender and competition at a young age gender gaps may be observed in a variety of economic and social environments one of the possible determining factors is that men are more competitive than women and so when the competitiveness of the environment increases the performance of men increases relative to that of women we test this hypothesis in a field study conducted with 9 year old children running on a track they first run alone and then in pairs over a short distance with different gender composition of the pairs the results support the hypothesis that performance in competition varies according to gender when children ran alone there was no difference in performance in competition boys but not girls improved their performance this finding relates to the discussion regarding single sex schools the outcomes of examinations in a mixed sex school can show a gender gap in favor of boys even when this gap does not reflect actual abilities girls who are as talented as boys will end up performing worse just because they are not as competitive and will not achieve as high scores in examinations as boys

mps for sale returns to office in postwar british politics many recent studies show that firms profit from connections to influential politicians but less is known about how much politicians financially benefit from wielding political influence we estimate the returns to serving in parliament using original data on the estates of recently deceased british politicians applying both matching and a regression discontinuity design to compare members of parliament mps with parliamentary candidates who narrowly lost we find that serving in office almost doubled the wealth of conservative mps but had no discernible financial benefits for labour mps conservative mps profited from office largely through lucrative outside employment they acquired as a result of their political positions we show that gaining a seat in parliament more than tripled the probability that a conservative politician would later serve as a director of a publicly traded firm enough to account for a sizable portion of the wealth differential we suggest that labour mps did not profit from office largely because trade unions collectively exerted sufficient control over the party and its mps to prevent members from selling their services to other clients

peers at work we study peer effects in the workplace specifically we investigate whether how and why the productivity of a worker depends on the productivity of coworkers in the same team using high frequency data on worker productivity from a large supermarket chain we find strong evidence of positive productiv ity spillovers from the introduction of highly productive personnel into a shift worker effort is positively related to the productivity of workers who see him but not workers who do not see him additionally workers respond more to the presence of coworkers with whom they frequently interact we conclude that social pressure can partially internalize free riding externalities that are built into many workplaces jel j24 l81 m54

quitters never win the adverse incentive effects of competing with superstars internal competition may motivate worker effort yet the benefits of competition may depend critically on workers relative abilities large skill differences may reduce efforts i use panel data from professional golf tournaments and find that the presence of a superstar is associated with lower performance on average golfers first round scores are approximately 0 2 strokes worse when tiger woods participates relative to when woods is absent the overall tournament effect is 0 8 strokes the adverse superstar effect varies with the quality of woods s play there is no evidence that reduced performance is attributable to media attention intensity or risky strategy adoption

applied welfare economics with discrete choice models economists have been paying increasing attention to the study of situations in which consumers face a discrete rather than a continuous set of choices such models are potentially very important in evaluating the impact of government programs upon consumer welfare but very little has been said in general regarding the tools of applied welfare economics indiscrete choice situations this paper shows how the conventional methods of applied welfare economics can be modified to handle such cases it focuses on the computation of the excess burden of taxation and the evaluation of quality change the results are applied to stochastic utility models including the popular cases of probit and logit analysis throughout the emphasis is on providing rigorous guidelines for carrying out applied work this abstract was borrowed from another version of this item

the private returns to public office we study the wealth accumulation of indian state politicians using public disclosures required of all candidates the annual asset growth of winners is 3 5 percent higher than that of runners up a difference that holds also in a set of close elections the relative asset growth of winners is greater in more corrupt states and for those holding ministerial positions these results are consistent with a rent seeking explanation for the relatively high rate of growth in winners assets

ability location and household demand for internet bandwidth abstract this paper examines consumer preferences for internet bandwidth focusing on technical ability and urban rural location as sources of preference heterogeneity an economic model is outlined that shows that ability decreases the effective price of bandwidth as a result of this decrease part of the total effect of an increase in ability will always be an increase in the demand for bandwidth the implication is empirically investigated with an econometric approach that overcomes the limitations of the aggregated data that is currently available to describe consumer preferences results show that high ability urban consumers are willing to pay a substantive monthly premium for an improvement in bandwidth relative to rural consumers

coverage of retail stores and discrete choice models of demand estimating price elasticities and welfare effects consumers choice set of products within stores can be limited ackerberg and rysman 2005 address this problem by modeling unobserved consumer preferences over products and retail stores leading to augmented demand speci cations having carbonated soft drink product level data where we observe products store coverage we are able to estimate their logit nested logit and random coe cient logit speci cations of demand in a structural model of equilibrium allowing for store coverage turns out to have a very signi cant impact on the estimated structural parameters and on the predictive power of the model taking these estimated structural parameters we perform a counterfactual whereby stores carry all products in the market we nd systematic increases in price elasticities and welfare in our new equilibrium competition in markets is more curtailed than normally assumed in structural models of industries

paying politicians theory and evidence this paper looks at the theory behind the idea that paying politicians better will improve their performance the paper lays out a political agency model with adverse selection and moral hazard where politicians are subject to two period term limits this model provides a number of predictions about how the pay of politicians affects agency problems we also consider what happens when the pool of politicians is endogenous the main ideas in the model are confronted with data on u s governors jel d72 j33

demand pricing and regulation evidence from the cable tv industry subsequent to the nationwide deregulation of the cable tv industry a number of questions have been raised concerning the conduct of cable firms answers to these questions turn upon a fundamental set of issues regarding the economic relationships of demand pricing and regulation in this article we empirically examine these relationships for the period prior to deregulation a number of basic findings emerge among these we find that the demand for basic cable service ranges from being generally inelastic in rural areas to elastic in large urban markets the elasticity of demand for pay cable services is typically well in excess of unity also while regulation did not lead to economically efficient marginal cost prices for basic cable service it did act to keep prices below monopoly levels moreover our examination reveals some significant differences in the effectiveness of the various types of regulation practiced in the pre deregulation period

tying foreclosure and exclusion in recent years the leverage theory of tied good sales has faced heavy and influential criticism in an important sense though the models used by its critics are actually incapable of addressing the leverage theory s central concerns here the author reconsiders the leverage hypothesis and argues that tying can indeed serve as a mechanism for leveraging market power the mechanism through which this leverage occurs its profitability and its welfare implications are discussed in detail copyright 1990 by american economic association

clean evidence on peer effects we study subjects who were asked to fill letters into envelopes with a remuneration independent of output in the pair treatment two subjects worked at the same time in the same room and peer effects were possible in the single treatment subjects worked alone and peer effects were ruled out we find evidence of peer effects in the pair treatment because the standard deviations of output are smaller within pairs than between pairs moreover average output is higher in the pair treatment thus peer effects raise productivity finally low productivity workers are the most sensitive to the behavior of peers

the welfare effects of bundling in multichannel television markets we measure how the bundling of television channels affects short run welfare we estimate an industry model of viewership demand pricing bundling and input market bargaining using data on ratings purchases prices bundles and input costs we conduct simulations of a la carte policies that require distributors to offer individual channels for sale to consumers we estimate that negotiated input costs rise by 103 0 percent under a la carte these higher input costs offset consumer benefits from purchasing individual channels mean consumer and total surplus change by an estimated 5 4 to 0 2 percent and 1 7 to 6 0 percent respectively jel d12 l11 l51 l82 m31

peer effects among swimmers we develop a novel identification strategy and examine various aspects of peer effects using swimming data we find that the performance of adjacent competitors positively influences swimmers performances in particular swimmers are influenced by slower lane peers suggesting that being chased improves one s performance we use absenteeism data to directly compare the performances of swimmers with and without peers we have found that swimmers swim faster with peers swimming behind them than when swimming alone but that they swim slower with peers swimming ahead finally we find that observability is a key determinant of peer effects by comparing freestyle and backstroke competitions

market power and price increases for basic cable service since deregulation since the deregulation of rates for basic cable television service increases in price have outpaced the rate of inflation this article examines whether or not cable systems increased market power or their increased exercise of market power explains these price increases an estimated quasi supply function for cable systems before and after deregulation implies that real basic cable prices increased 18 since deregulation holding quality and other costs constant accounting for 43 of the total real price increase a demand equation is also estimated and the estimated demand elasticity of basic cable does not change after deregulation implying that this 18 real price increase is due to greater exercise of existing market power made possible by the elimination ofprice regulation rather than to an increase in market power caused by a change in the demand elasticity for cable

fighting city hall entry deterrence and technology upgrades in cable tv markets this article investigates how private firms respond to potential entry from public firms this paper uses a data set of over 3 000 u s cable tv systems to present evidence consistent with entry deterrence incumbent cable tv firms upgrade faster when located in markets with a potential municipal entrant however the same systems are then slower to offer new products enabled by the upgrade suggesting upgrades in these markets occur for strategic reasons incumbent cable systems also upgrade faster in response to municipal entry threats than to private entry threats understanding how private firms respond to potential entry from public firms is especially important in light of recent u s government entry into several industries this paper was accepted by bruno cassiman business strategy

the multiproduct firm quality choice and regulation a monopolist facing a market of heterogeneous consumers will distort the quality a rray this paper explores three regulatory remedies minimum quality s tandards mqs maximum price regulation mpr and rate of return re gulation rorr that can counteract this distortion mqs and mpr rais e the quality offered to consumers with a low willingness to pay for quality while mqs have no effect on the quality offered to consumers with a high willingness to pay mpr decreases the quality offered to this group if production of high low quality goods is capital i ntensive rorr increases decreases the quality offered to both grou ps copyright 1988 by blackwell publishing ltd

dynastic political rents economic benefits to relatives of top politicians we exploit close elections in swedish municipalities to test whether relatives of politicians who become mayors obtain economic benefits we find no benefits for the siblings of new mayors but the

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

a control function approach to endogeneity in consumer choice models abstract endogeneity arises for numerous reasons in models of consumer choice it leads to inconsistency with standard estimation methods that maintain independence between the model s error and the included variables the authors describe a control function approach for handling endogeneity in choice models observed variables and economic theory are used to derive controls for the dependence between the endogenous variable and the demand error the theory points to the relationships that contain information on the unobserved demand factor such as the pricing equation and the advertising equation the authors approach is an alternative to berry levinsohn and pakes s 1995 product market controls for unobserved quality the authors apply both methods to examine households choices among television options including basic and premium cable packages in which unobserved attributes such as quality of programming are expected to be correlated with price without correcting for endogeneity aggregate d

the primary effect preference votes and political promotions we analyze how electoral rules and outcomes shape the internal organization of political parties theoretically we make an analogy with primary elections to argue that parties use preference vote tallies to identify popular politicians and promote them to positions of power empirically we document this behavior among parties in sweden s semi open list system and in brazil s open list system to identify a causal impact of preference votes we exploit a regression discontinuity design around the threshold of winning the most preference votes on a party list in our main case sweden these narrow primary winners are at least 50 more likely to become local party leaders than their runners up across individual politicians the primary effect is present only for politicians who hold the first few positions on the list and when the preference vote winner and runner up have similar competence levels across party groups the primary effect is the strongest in unthreatened governing parties

politicians payments in a proportional party system abstract are there monetary returns to politics this question is approached in this paper as one of few to quantify the monetary returns to holding political office in a country with proportional representation system i apply a difference in difference setting with a carefully chosen control group to rich data on candidates to the swedish national parliament both short and long run effects of being elected on different types of income are estimated results show that yes mostly thanks to relatively high remuneration while still in office politics can yield positive monetary returns in the long run however the effect is instead compositional in the sense that ex politicians receive more pension income and work less

measuring consumer switching costs in the television industry in this article i develop and estimate a model of dynamic consumer behavior with switching costs in the market for paid television services i estimate the parameters of the structural model using data on cable and satellite systems across local us television markets over the period 1992 2006 the results suggest switching costs range from 159 to 242 for cable and from 212 to 276 for satellite providers in 1997 dollars using a simple dynamic model of cable providers i demonstrate that switching costs of these magnitudes can significantly affect the firms optimal strategies

performance in competitive environments gender differences even though the provision of equal opportunities for men and women has been a priority in many countries large gender differences prevail in competitive high ranking positions suggested explanations include discrimination and differences in preferences and human capital in this paper we present experimental evidence in support of an additional factor women may be less effective than men in competitive environments even if they are able to perform similarly in non competitive environments in a laboratory experiment we observe as we increase the competitiveness of the environment a significant increase in performance for men but not for women this results in a significant gender gap in performance in tournaments while there is no gap when participants are paid according to piece rate this effect is stronger when women have to compete against men than in single sex competitive environments this suggests that women may be able to perform in competitive environments per se

a model of political competition with citizen candidates the authors develop a model of electoral competition in which citizens choose whether or not to run as candidates a winner implements her favorite policy the equilibrium number of candidates depends negatively on the cost of running and positively on the benefits of winning for some parameter values all equilibria under plurality rule have exactly two candidates whose positions are distinct two candidate elections are more likely under plurality rule than under a runoff system the candidates positions are less differentiated under a runoff system there exist equilibria under both systems in which some candidates have no chance of winning