how do people cope with natural disasters evidence from the great hanshin awaji kobe earthquake in 1995 this paper investigates the coping strategies employed by victims of the great hanshin awaji kobe earthquake in 1995 using a unique household data set we show that households that held a large amount of collateralizable assets before the catastrophe and were free from a binding borrowing constraint were able to maintain their consumption levels by borrowing in contrast households subject to a binding borrowing constraint before the disaster were unable to borrow to cope with the losses inflicted by the earthquake on the other hand both types of households relied on private transfers depending on the extent of the damage

causality testing of the popularity function an empirical investigation for the federal republic of germany 1971 1982 relying on allensbach and infratest data it is asked if there is a relation between the perception of the general economic situation and the voting intention modern time series techniques are employed box jenkins analysis and granger causality tests the test results as well as ex post predictions show that voting intentions are strongly influenced by the perceived economic situation thus the null hypothesis of no relationship between the variables can not only be rejected by using classical econometric methods as is done in previous studies but also by employing modern time series procedures

competition between multiple asymmetric networks theory and applications this paper presents a tractable model of network competition with many firms elastic subscriber demand off net price discrimination call externalities and cost and market share asymmetries we characterize stability in expectations and equilibrium under firm and market level network effects the model is applied to simulate the effects of termination rates market maturity and retail pricing strategies we show that predictions based on duopoly models can be misleading in particular concerning the effects of termination rates

measuring the pay disparity between typically female occupations and other jobs a bivariate selectivity approach the author of this study using a bivariate probit selectivity model with data from the 1984 panel survey of income dynamics finds that women in female dominated jobs earned 6 15 percent less than

why is on net traffic cheaper than off net traffic access markup as a collusive device abstract mobile telephony networks typically overcharge each other for the termination of incoming calls leading to high prices for off net traffic the existing theory claims that this behavior reduces profits since high termination charges make firms set high marginal prices thus leading to lower subscription fees and reduced profits this paper bridges the gap between theory and reality by incorporating several assumptions in a model that reflects the reality of mobile telephony markets one of the key assumptions is the fact that subscribers tend to place their calls to a limited number of people consisting mostly of friends and relatives the existence of such calling clubs combined with switching costs supports high access fees at the equilibrium we also discuss the implications of our analysis for eu regulation

promoting network competition by regulating termination charges abstract this paper contributes to the policy debate about the optimal termination charge when penetration rates are explicitly taken into account although lowering termination charges towards cost leads to more efficient usage its impact on consumer surplus is ambiguous since it induces an increase in fixed subscription fee through the so called waterbed effect we show that a reduction in termination charge below cost has two opposing effects on consumer surplus it softens competition but also helps to internalize network externalities hence it can decrease or increase penetration depending on whether or not the first effect dominates the second we show that the first effect dominates the second when networks are weak substitutes or the penetration rate is high

bill and keep vs cost based access pricing revisited abstract we study network competition with two part tariffs and termination based price discrimination in the presence of call externalities we show that both the collusive and the welfare maximizing access charges fall below marginal cost moreover bill and keep arrangements are welfare improving compared with cost based access pricing

mobile termination network externalities and consumer expectations we re examine the literature on mobile termination in the presence of network externalities externalities arise when firms discriminate between on and o net calls or when subscription demand is elastic this literature predicts that profit decreases and consumer surplus increases when termination charges increase this is puzzling since in reality regulators are pushing termination rates down while being opposed to do so by network operators this puzzle is resolved when consumers expectations are assumed passive but required to be fulfilled in equilibrium as defined by katz and shapiro aer 1985 instead of being responsive to non equilibrium prices as assumed until now

on the optimality of the full cost pricing abstract this article is aimed at defining the full cost pricing as a leader follower game in two tier organizations i the upstream unit fixes the production capacity and uses it as a cost driver to compute the average cost ii the downstream unit operates on the market and chooses the output level on the basis of the average cost in the cournot oligopoly case the full cost pricing is compared with other pricing rules there exists a wide range of values of the fixed cost for which the full cost pricing dominates any other pricing rules in terms of gross profit

network competition and interconnection with heterogeneous subscribers abstract this paper analyses two way access pricing in a telecommunications market where consumers are heterogeneous in their demand for calls and firms are allowed to use non linear tariffs we first investigate how the presence of access charges affects the tariffs offered by firms in symmetric equilibrium next we show that under certain conditions each firm s profit is independent of the level of reciprocal access charge and therefore collusion using access charges is not sustainable this result suggests that efficient call allocations can be achieved under a minimal regulatory intervention i e recommending firms set access charges equal to call termination cost

a retail benchmarking approach to efficient two way access pricing no termination based price discrimination jeon gratefully acknowledges financial support from the spanish government under sej2006 09993 econ and a ramon y cajal grant hurkens gratefully acknowledges the financial support from the spanish ministry of science and technology under sej2006 01717 both authors acknowledge support through grant consolider ingenio 2010 csd2006 00016 and through the net institute netinst org

using bill and keep interconnect arrangements to soften network competition abstract this paper demonstrates that low below marginal cost interconnect or access charges can be used to sustain high subscription prices under network competition with two part tariffs and price discrimination this result stands in contrast to other results in the literature suggesting that high interconnect charges can play a collusive role

estimating wage discrimination in the labor market if labor supply curves are not perfectly inelastic wage discrimination induces some minority workers to leave the labor force studies of discrimination that focus only on wage differentials overlook these disincentive effects on minority employment

entry access pricing and welfare in the telecommunications industry abstract this paper investigates the effects of entry on welfare in the telecommunications industry equilibrium pricing parameters for monopoly and duopoly situations are determined where access charges are chosen non cooperatively welfare comparisons between alternative access pricing regimes are also performed

optimal access pricing for natural monopoly networks when costs are sunk and revenues are uncertain this paper studies optimal access pricing for natural monopoly networks with large sunk costs and uncertain revenues using techniques from the option pricing literature we show that the optimal access price corresponds to a risk free form of the efficiency component pricing rule ecpr that is where the opportunity cost is based on the risk free rate of return we also show that at levels of revenue above the optimal level that triggers entry the entrant should pay a premium above risk free ecpr that rewards the incumbent for relinquishing his rights to the risky cash flows at the higher revenue level

the role of incentives for opening monopoly markets comparing gte and boc cooperation with local entrants while the 1996 telecommunications act requires all incumbent local telephone companies to cooperate with local entrants section 271 of the act provides the bell companies but not gte additional incentives to cooperate using an original data set i compare the negotiations of at t as a local entrant with gte and with the bell companies in states where both operate my results suggest that the differential incentives matter the bells accommodate entry more than does gte as evidenced in quicker agreements less litigation and more favorable prices offered for network access consistent with this there is more entry into bell territories

discrimination empirical evidence from the united states the study of discrimination received a major impetus in the 1960 s when increasing social attention focused upon race and gender differentials in market outcomes gary becker s the economics of discrimination 1957 strongly influenced empirical research by providing a definition of wage discrimination and suggesting a specific way in which it might operate during the following years new theories were developed and refined in an attempt to explain why there appears to be continued discrimination in spite of market forces presumably operating against it similarly a large amount of empirical work has been done to determine whether and how much discrimination actually exists and to a lesser extent to test the implications of the various theories even so the hope expressed by becker in the preface of the second edition 1971 that our understanding of discrimination would increase so rapidly that the materials in his book would become obsolete before another decade began has clearly not been fulfilled here we review what has been learned in the intervening years and suggest some fruitful directions for future research 1 the focus of this paper like that of most of the empirical research in this area is on determining the extent of discrimination rather than on testing alternative models of discrimination

private roads competition and incentives to adopt time based congestion tolling abstract this paper investigates whether time based congestion tolling is profitable for a private toll road operator when competing for traffic with another road despite the fact that congestion tolling boosts revenue by reducing congestion delay it can be unprofitable if it induces a private or public toll road rival to reduce its toll severely the size of the rival s response depends on the price elasticity of travel demand and on whether the rival also employs congestion tolling in a private duopoly adoption may be unilaterally profitable but parallel adoption unprofitable so that a prisoner s dilemma obtains

comparative economic voting britain france germany italy likelihood of a vote for the incumbent coalition in contrast personal economic circumstances no matter how measured demonstrate nonexistent to weak effects on vote choice overall economic conditions emerge as a relatively important vote determinant when a more properly specified general multi equation model of the vote is estimated economics shows itself to be as powerful as traditional factors used to explain the western european vote in particular economic variables exceed the impact of partisan identification in britain and roughly equal it in germany moreover the economic variables exercise more influence than the social cleavages of class and religion everywhere except italy

intraconnectivity and interconnectivity when value creation may reduce profits this paper analyses firms decisions to provide connectivity to their customers we distinguish between intraconnectivity the ability of one firm s customers to connect to each other and interconnectivity the ability of one firm s customers to connect with another firm s customers the profitability implications of allowing connectivity are not a straightforward consequence of the consumer value of connectivity because connectivity affects not only the customer value but also the intensity of competition by creating or changing network externality we find that if sales are driven by brand switching rather than by category expansion a firm may find it optimal not to provide intraconnectivity even if providing it is not costly and may find it optimal to provide interconnectivity even at a cost exceeding the consumer value of connectivity on the other hand if category expansion is possible providing intraconnectivity may be profitable in this case either the equilibrium intraconnectivity provision may be asymmetric or both firms may find it individually optimal to provide intraconnectivity under certain conditions in the latter case the firms choice of intraconnectivity is a prisoner s dilemma game

the gender pay gap fringe benefits and occupational crowding using data from the 1991 national longitudinal survey of youth the authors estimate earnings equations for each of seven occupational categories and the aggregate sample when fringe benefits are excluded from the compensation measure a gender coefficient is statistically significant that is women are found to have received significantly lower compensation than men within six of the seven occupational categories the exception being the most female dominated category when an index of compensation that includes fringe benefits is used however a gender coefficient is significant in only one category which contains relatively heterogeneous jobs gender specific regressions are used to estimate what part of the earnings gap between men and women is due to differences in traits the results indicate that occupational assignment is the primary determinant of the pay gap a result that is consistent with a crowding explanation of that gap

price regulation of access to telecommunications networks abstract without access of networks to each other competition in the telecommunications sector would hardly have spread so quickly such mutual access is necessary for carriers to provide ubiquitous service and enable endusers to call and be called by anybody without subscribing to a system wide monopolist one way access concerns bottleneck inputs provided by an incumbent network to entrants while two way access concerns the interconnection between networks whereas one way access regulation is exclusively driven by containment of market power two way access is additionally affected by collusion possibilities among the numerous pricing rules discussed none clearly dominates this article provides a roadmap vis a vis the competing policy objectives for access price regulation

intertemporal price cap regulation under uncertainty this paper examines the intertemporal price cap regulation of a firm that has market power under uncertainty the unconstrained firm waits longer before investing or adding to capacity and as a corollary enjoys higher prices over time than would be observed in an equivalent competitive industry in the certainty case the imposition of an inter temporal price cap can be used to realise the competitive market solution by contrast under uncertainty it cannot even if the price cap is optimally chosen under uncertainty the monopoly firm will generally a under invest and b impose quantity rationing on its customers

network competition ii price discrimination our companion article developed a clear conceptual framework of negotiated or regulated interconnection agreements between rival operators and studied competition between interconnected networks under the assumption of nondiscriminatory pricing this article relaxes this assumption and allows networks to charge different prices for calls terminating on the subscriber s network and those terminating on a rivals network this creates a price differential between services that are identical for the consumer and generates network externalities despite network interconnection we show that in both the mature and entry phases of the industry the nature of competition is substantially affected by such price discrimination

why the gender gap in wages narrowed in the 1980s since 1976 the gender gap in wages on average declined by about 1 per year this article focuses on identifying the factors underlying this trend three data sets are analyzed the current population survey the panel study of income dynamics and the national longitudinal survey we find that convergence in measurable work related characteristics schooling and work experience explains one third to one half the narrowing the remainder is attributable to a relative increase in women s returns to experience as well as to declining wages in blue collar work and other factors

outsourcing vertical integration and price vs quantity competition abstract we show that standard conclusions about duopoly competition can be reversed when the production of key inputs is outsourced to a vertically integrated retail competitor with upstream market power under such outsourcing bertrand competition can produce higher prices higher industry profit lower consumer surplus and lower total surplus than cournot competition in addition to limiting the intensity of retail competition bertrand competition can limit the extent of wholesale competition by reducing the incentive of retail providers to produce key inputs themselves

self selection via fringe benefits this paper extends the theory of self selection to circumstances in which economic agents have some access to markets we use the analysis to explain the existence of multidimensional compensation packages in the presence of limited re marketability employment contracts that include fringe benefits are prominent examples of such multidimensional packages

how lasting is voter gratitude an analysis of the short and long term electoral returns to beneficial policy dominant theories of electoral behavior emphasize that voters myopically evaluate policy performance and that this shortsightednessmayobstructthewelfare improvingeffectofdemocraticaccountability however weknowlittleabouthow long governments receive electoral credit for beneficial policies we exploit the massive policy response to a major natural disaster the 2002 elbe flooding in germany to provide an upper bound for the short and long term electoral returns to targeted policy benefits we estimate that the flood response increased vote shares for the incumbent party by 7 percentage points in affected areas in the 2002 election twenty five percent of this short term reward carried over to the 2005 election before the gains vanished in the 2009 election we conclude that given favorable circumstances policy makers can generate voter gratitude that persists longer than scholarship has acknowledged so far and elaborate on the implications for theories of electoral behavior democratic accountability and public policy

bertrand competition under network externalities abstract two firms engage in price competition to attract buyers located on a network the value of the good of either firm to any buyer depends on the number of neighbors on the network who adopt the same good when the size of externalities increases linearly with the number of adoptions we identify the set of pricing strategies that are consistent with an equilibrium in which one of the firms monopolizes the market the set includes marginal cost mc pricing as well as bipartition pricing which offers discounts to some buyers and charges markups to others we show that mc pricing fails to be an equilibrium under non linear externalities in a general network but identify conditions for an equilibrium with bipartition pricing to be robust against perturbations in the externalities from linearity the analysis is applied to platform competition in a two sided market under local and approximately linear externalities

asymmetric access price regulation in telecommunications markets abstract in liberalized telecommunications markets the incumbent typically enjoys several advantages over any entrant regulation in such asymmetric markets stimulates competition in the short and the long term if retail prices are low and the entrant s profits are high so that entry is encouraged i show that asymmetric access price regulation with a cost based access price for the incumbent and an access markup for the entrant is more successful than cost based access price regulation applied to incumbent and entrant this is a robust prediction with respect to the pricing strategies considered such asymmetric access price regulation is in accordance with european legislation

your network or mine the economics of routing rules in many markets including payment cards and telecommunications service providers operate networks that support customer transactions with each other when the two sides of a transaction belong to more than one network in common the question arises as to which network will carry the transaction we show that the answer depends on a combination of who has the formal authority to choose and the parties network subscription decisions our central finding is that granting formal authority to one side of the market can increase the extent to which transactions run over the network preferred by the other side of the market we also characterize competing networks equilibrium choices of routing rules and prices

calling circles network competition with non uniform calling patterns we introduce a flexible model of telecommunications network competition with nonuniform calling patterns accounting for the fact that customers tend to make most calls to a small set of similar people equilibrium call prices are distorted away from marginal cost and competitive intensity is affected by the concentration of calling patterns contrary to previous predictions jointly profit maximizing access charges are set above termination cost in order to dampen competition if calling patterns are sufficiently concentrated we discuss implications for regulating access charges as well as on and off net price discrimination

econometrics and presidential elections this paper discusses an econometric equation that explains votes for president as a function of economic events and incumbency information the history of the equation is reviewed the update after the 1992 election is discussed and a prediction for the 1996 election is made conditional on an economic forecast

empirical evidence on the relationship between mobile termination rates and firms profits the theoretical literature on mobile termination rates mtrs is inconclusive on how the level of mtrs affects overall consumer charges and firms profits we show that when firms offer bundles with fixed included usage a tariff structure that has become more common in recent years an identical change in all mtrs does not affect firms retail prices or profits we use a panel dataset from saturated european markets to estimate the effect of mtrs on mobile operators profits as predicted by the theoretical model we cannot reject the fact that firms profits are unaffected by an identical change in all mtrs

termination fees revisited we reconsider the question of the optimal level of termination fees between communication networks in the context of heterogeneous usage and elastic participation the interaction between these two features yields new insights in our model i the profit maximizing reciprocal termination fee is above marginal cost ii the welfare maximizing termination fee is also above cost iii the welfare maximizing termination fee is below the profit maximizing one in the absence of termination based price discrimination but can be above it otherwise

price competition with reduced consumer switching costs the case of wireless number portability in the cellular phone industry wireless number portability wnp is a telecommunication regulatory policy that requires cellular phone service providers to allow customers who switch service subscriptions to retain their original phone numbers the right to retain the number lowers the switching cost for a consumer thus the purpose of the policy is to induce more competition and facilitate the growth of new or small service providers in this paper we show that wnp drives market price downward as expected but with a surprising twistrather than helping the smaller firms grow the policy may accelerate the process of market concentration we find that the main contributing factor to this peculiarity is the discriminatory pricing scheme prevalent in the industrythat is a service provider charges a lower per minute fee for the calls initiated and received within the same network than for the calls connected across two networks under this pricing scheme a consumer who subscribes to a larger network would benefit more than if subscribing to a smaller network despite the relatively higher fixed access fee that the former may charge by lowering the barrier of switching wnp creates a market condition conducive for a larger network to gain market share we support our analysis with the empirical evidence gathered from hong kong where wnp was adopted in march 1999

tirole s industrial regulation and organization legacy in economics jean tirole was awarded the 2014 sveriges riksbank prize in economic sciences in memory of alfred nobel for his analysis of market power and regulation this paper provides an overview of some of that work and of his related contributions to game theory

foreclosing competition through high access charges and price discrimination this article analyzes competition between two asymmetric networks an incumbent and a new entrant networks compete in non linear tariffs and may charge different prices for on net and off net calls when access charges are high this allows the incumbent to foreclose the market in a profitable way if switching costs are sufficiently large in the absence of termination based price discrimination however such foreclosure strategies are not profitable

the economics of networks a survey of the empirical literature network effects the increase in value of consuming a product if many other consumers use the same product are a feature of many markets and in particular of many high technology products this paper surveys the burgeoning empirical literature that has developed especially during the last years after theoretical work dominated the earlier years of research in this area newer research has combined theoretical models with empirical studies and applied work with direct implications for public policy marketing and company strategies furthermore insights from the study of social networks have been applied to analyse how consumers interact with each other the paper argues that a closer analysis of the network structure of consumer interaction promises fruitful future research avenues and advances in our understanding of how network effects operate copyright 2009 blackwell publishing ltd

employers discriminatory behavior and the estimation of wage discrimination this paper considers the linkage of empirical estimates of wage discrimination between two groups introduced by oaxaca 1973 to a theoretical model of employers discriminatory behavior it is shown that conditional on different assumptions about employers discriminatory tastes oaxaca s estimators of wage discrimination can be derived that the approach is more generally useful is demonstrated by deriving an alternative estimator of wage discrimination based on the assumption that within each type of labor e g unskilled skilled the utility function capturing employers discriminatory tastes is homogeneous of degree zero with respect to labor inputs from each of the two groups the estimators are compared empirically in an application to male female wage differentials

new models for new labour the political economy of labour party support january 1992 april 1997 this article uses newly available british time series data to analyze dynamic interrelationships among labour vote intentions perceptions that the labour leader would make the best prime minister and labour party identification error correction models reveal that best prime minister perceptions and party identification have important short and long run influences on vote intentions tests of rival models indicate that personal economic expectations outperform other economic evaluations in the vote intention and party identification analyses national retrospective judgments perform well in analyses of best prime minister perceptions and emotional reactions to economic conditions significantly influence these perceptions as well as party identification

welfare analysis of regulating mobile termination rates in the u k we develop a calibrated simulation model of the u k mobile telephony market and use it to analyze the effects of reducing mobile termination rates mtr s as recommended by the european commission we find that reducing mtr s is likely to increase both consumer surplus and networks profits depending on the strength of call externalities i e benefits to the recipient of a call social welfare may increase by as much as 1 billion to 4 6 billion per year we also use the model to estimate the welfare effects of the 2010 merger between orange and t mobile and find that the merger led to a substantial reduction in consumer surplus

dynamic price competition with network effects i consider a dynamic model of competition between two proprietary networks consumers die and are replaced with a constant hazard rate and firms compete for new consumers to join their network by offering network entry prices i derive a series of results pertaining to a existence and uniqueness of symmetric equilibria b monotonicity of the pricing function e g larger networks set higher prices c network size dynamics increasing dominance vs reversion to the mean and d firm value how it varies with network effects finally i apply my general framework to the study of termination charges in wireless telecommunications i consider various forms of regulation and examine their impact on firm profits and market share dynamics

news droughts news floods and u s disaster relief this paper studies the influence of mass media on u s government response to approximately 5 000 natural disasters occurring between 1968 and 2002 these disasters took nearly 63 000 lives and affected 125 million people per year we show that u s relief depends on whether the disaster occurs at the same time as other newsworthy events such as the olympic games which are obviously unrelated to need we argue that the only plausible explanation of this is that relief decisions are driven by news coverage of disasters and that the other newsworthy material crowds out this news coverage

male female differences in hourly wages the role of human capital working conditions and housework this study uses a new data set from a 1986 survey of workers to examine simultaneously the wage effects of human capital household responsibilities working conditions and on the job training the analysis suggests that household responsibilities had a negative effect on women s earnings but the unexplained difference between the earnings of men and women is not greatly reduced by inclusion in the explanatory model of information on either housework or working conditions the presence of children appears to have had a positive effect on the wages of both men and women t wenty years of research on gender differences in earnings have failed to explain the entire wage gap as a consequence of measured differences between male and female workers some researchers view the unexplained residual as evidence of discrimination against female workers others take the position that the entire wage gap is potentially explicable by differences in labor supply according to the latter view an unexplained wage gap remains because the data sets in use do not contain adequate information on all productivity related characteristics this view implies that the unexplained wage gap will be reduced by more comprehensive infor

two sided markets a progress report the paper provides a road map to the burgeoning literature on two sided markets and presents new results it identifies two sided markets with markets in which the structure and not only the level of prices charged by platforms matters the failure of the coase theorem is necessary but not sufficient for two sidedness the paper builds a model integrating usage and membership externalities that unifies two hitherto disparate strands of the literature emphasizing either form of externality and obtains new results on the mix of membership and usage charges when price setting or bargaining determine payments between end users

horizontal and vertical integration in securities trading and settlement this paper addresses a very european issue the consolidation of securities trading and settlement infrastructures in a two country model we analyze welfare implications of different types of consolidation we find that in our model full technical horizontal integration of settlement systems is better than vertical integration of exchanges and settlement systems but vertical integration is still better than no consolidation these findings have clear policy implications with regards to the highly fragmented european securities infrastructure

male female wage differentials and policy responses without implicating them for any of the contents of the paper i am grateful to the following for helpful discussions or comments andrea beller university of illinois david bloom harvard and columnbia glen cain university of wisconsin ron ehrenberg cornell victor fuchs stanford bob gregory australian national university jonathan leonard university of california berkeley roberta robb brock university and paul weiler harvard financial support of the humanities and social sciences committee of the research board of the universitu of toronto is eratefullu acknowlede ed

price and access charge discrimination in electricity distribution an application to the chilean case this paper presents and analyzes a model of electricity distribution in chile with three alternative regulatory pricing contract schemes for assigning a common capacity cost to final customers and competitive energy sellers the first scheme involves ramsey pricing while under the second and third schemes the monopoly chooses final prices and access charges subject either to a peak load physical cap or a total revenue price cap constraint in addition we consider circumstances in which the regulator does not know consumer demand the monopoly cannot price discriminate beyond a range defined by the marginal cost as a floor and the stand alone cost as a ceiling and access charges are set at the fully distributed cost allocation level currently in force the model is calibrated with chilean data and demonstrates that in terms of social welfare the fully distributed cost contract scheme currently in effect can be improved by discriminatory pricing complemented by certain of the analyzed constraints

motivation of politicians and long term policies we analyze the motivation of politicians in democracies when long term policies are socially desirable politicians receive utility from holding office and from the success of their projects we refer to the two extreme types of politicians as populists and policy success seekers one result is that inefficiencies in the political process are smaller when a politician is of the populist type when politicians offer incentive contracts the problem of inefficient decision making may be solved the amount of money necessary to induce the incumbent to undertake the socially optimal project decreases with the degree of populism he displays

network competition and entry deterrence we develop a model of logit demand that extends to a multi firm industry the traditional duopoly framework of network competition firstly we show that incumbents establish inefficiently the reciprocal access charge below cost when they compete in prices but they behave efficiently if they compete in utilities secondly we study how incumbents determine the industry wide access charge under the threat of entry we show that incumbents may accommodate all possible entrants only a group of them or may completely deter entry when entry deterrence is the preferred option incumbents distort the access charge upwards

market failures and public policy industrial organization studies the exercise and control of market power to this purpose it builds models that capture the essence of the situation the predictions of the model can then be tested econometrically and possibly in the lab or the field in the end the reasonableness of and robustness to modeling assumptions and the quality of empirical fit determine how confident economists are in making recommendations to public decision makers for intervention and to companies for the design of their business model industrial organization has a long tradition first theoretical with the work of french engineer economists antoine augustin cournot 1838 and jules dupuit 1844 then policy oriented with the enactment of the sherman act 1890 and subsequent legislation then descriptive with the studies of the harvard school structure conduct performance comforting and refining the antitrust drive and finally skeptical with the chicago school the chicago school correctly pointed out the lack of underlying theoretical doctrine and went on to cast doubt on the whole edifice it however did not develop an alternative antitrust doctrine perhaps because

international network competition under national regulation we extend the workhorse model of network competition to international calls this model enables us to show that national regulatory authorities nras maximizing domestic welfare have incentives to increase termination rates above the social optimum to extract rent from international call termination excessive termination rates distort prices but transfer surplus from foreign to domestic consumers via intensified network competition the model can explain the regulation of termination rates through rate floors international network ownership and deregulation are alternatives to combat the incentives of nras to distort termination rates we identify conditions under which each of these policies increases aggregate welfare

incorporating the causes of occupational differences in studies of racial wage differentials this study provides a basic framework for incorporating the causes of occupational differences into analyses of racial wage differentials separating the influences of personal characteristics occupational choice and hiring discrimination on occupational attainment provides measures of the contributions of each to the racial pay gap the paper also considers the potential for bias in the wage equation estimates arising from self selection into occupations there are two generalfindings first correcting for self selection increases the importance of occupational distribution in explaining racial wage differentials second a proper accounting of the causes of these occupational differences yields discrimination measures that are higher than those that arise when occupational dummy variables are included in the wage equations and all the difference in occupational distribution is treated as nondiscriminatory

on the decomposition of wage differentials the often used method for decomposing wage differentials into human capital and discrimination components is reformulated so that both t he disadvantage or cost discrimination it imposes on a black or minority wage earner and the advantage or benefit it bestows on a white or majority wage earner can be estimated copyright 1988 by mit press

demand and innovation in services the case of mobile communications abstract this paper aims to analyse the pricing strategies of mobile communications operators and examine the role of demand characteristics in the development of new tariff plans in so doing we depart from a traditional industrial organization approach to price discrimination and interpret new tariff plans as innovations in the spirit of schumpeter we look at competition in this sector as depending upon this form of innovation and we argue that given the specific features of the industry the development of new tariff plans is strongly related to the users characteristics and behaviour our main point is that in a context of uncertainty demand affects firms innovative strategies in two ways first by providing information on user behaviour and by increasing the capability of market segmentation and second by providing the incentives to innovate this argument is supported by an empirical analysis carried out on the basis of an original dataset which includes all the tariff plans on offer in the history of the italian market between 1992 and 2005 we find that both a firm s installed customer base and the level of market saturation play a role in shaping firms innovative pricing strategies in terms of the number and characteristics of the new tariff plans

international telecom settlements gaming incentives carrier alliances and pareto superior reform liberalized countries that allow competition in international telecommunications favor traffic re routing practices as arbitrage against foreign monopolists this view is seriously incomplete monopolists allied with carriers in liberalized countries can use these practices to reduce termination payments to nonalliance carriers thereby harming also consumers in liberalized countries by gaming regulations that require equal termination rates at both ends and proportional return the monopolist s traffic is allocated among carriers in proportion to their shares of traffic to its country we also present a simple bilateral settlements reform that eliminates gaming incentives and other proportional return distortions yet benefits both countries

viewpoint male female wage differentials how can that be abstract the paper outlines the main empirical procedures that are used to document the male female wage differential and the extent to which it reflects discrimination it then discusses the evidence on male female wage differentials their existence the extent to which they reflect discrimination their changes over time and the factors that influence the gap particular attention is paid to more recent studies that control for a wider range of conventionally unobserved factors theoretical perspectives are then outlined focusing on the issue of how discriminatory wage differentials can survive given the forces of competition the impacts of policy initiatives are also discussed

how do switching costs affect market concentration and prices in network industries i investigate the effects of switching costs on the market outcome in network industries using a dynamic duopoly model of price competition in the presence of an outside option i find that the role of switching costs depends on network effects and the outside option without a viable outside option high switching costs can neutralize the tendency towards high market concentration associated with network effects but with a viable outside option switching costs increase market concentration furthermore switching costs lower prices if network effects are modest and there exists a viable outside option but generally raise prices otherwise

two part tariffs with quality degradation abstract this paper examines a firm s incentive to sell a service that is of lower quality when the firm offers a menu of two part tariffs each tariff is characterized by a fixed fee together with two screening instruments these being a uniform per unit charge and a quality restriction we find that allocation of quality is monotonic in type while per unit charge might be non monotonic the results thus contradict one of the most established insights in nonlinear pricing that the per unit charge should be monotonically decreasing over the type space we show that this practice increases welfare due to increased consumption efficiency

network competition with income effects i generalize the workhorse model of network competition to include income effects in demand empirical work has shown income effects to be positive and statistically significant income effects deliver theoretical results consistent with regulatory concern about excessive termination rates unregulated network operators competing in nondiscriminatory retail contracts negotiate termination rates above cost for any positive income effect this also holds when operators discriminate between on net and off net calls if networks are differentiated operators profit from increasing termination rates above cost under second degree price discrimination if a sufficient share of consumers prefer on net off net contracts and their subscription demand is relatively inelastic