search platforms showrooming and price parity clauses we provide a model in which consumers can search for rms directly or through a platform the platform lowers search costs and provides convenience benets but charges rms for the transactions it facilitates in equilibrium we show consumers buy through the platform despite rms setting higher prices on the platform higher prices on the platform give rise to the possibility of showrooming in which consumers search on the platform but then switch and buy directly to take advantage of lower direct prices in settings like this search platforms like amazon s marketplace and booking com have adopted price parity clauses requiring rms oer their best prices on the platform arguing this is needed to prevent showrooming we use our model to evaluate the implications of showrooming and price parity clauses

price coherence and excessive intermediation suppose an intermediary provides a benefit to buyers when they purchase from sellers using the intermediary s technology we develop a model to show that the intermediary would want to restrict sellers from charging buyers more for transactions it intermediates with this restriction an intermediary can profitably raise demand for its services by eliminating any extra price buyers face for purchasing through the intermediary we show that this leads to inflated retail prices excessive adoption of the intermediaries services over investment in benefits to buyers and a reduction in consumer surplus and sometimes welfare competition among intermediaries intensifies these problems by increasing the magnitude of their effects and broadening the circumstances in which they arise we discuss applications to payment card systems travel reservation systems rebate services and various other intermediaries jel codes d40 l11 l14 l42

collective bargaining firm size and pensions in canada abstract the following paper analyzes the provision of job related pensions in canada the empirical results indicate that both unions and firm size have significant effects on the distribution of pensions the significance of unions on the provision of pensions does decline as firm size increases

platform competition in two sided markets many if not most markets with network externalities are two sided to succeed platforms in industries such as software portals and media payment systems and the internet must get both sides of the market on board accordingly platforms devote much attention to their business model that is to how they court each side while making money overall this paper builds a model of platform competition with two sided markets it unveils the determinants of price allocation and end user surplus for different governance structures profit maximizing platforms and not for profit joint undertakings and compares the outcomes with those under an integrated monopolist and a ramsey planner jel l5 l82 l86 l96

the economic functions of private pensions an empirical analysis this paper presents an empirical analysis of the economic functions of defined benefit db pensions firms providing pensions choose between db and defined contribution formats the latter is essentially a tax preferred savings account the former may fill other roles determinants of firms choice of plan are estimated using plan sponsors reports to the internal revenue service firms that are larger are unionized employ mainly one sex invest in specific training and pay lower wages are more likely to provide db coverage these results suggest that the economic role of pensions is broader than mere provision of tax preferred savings accounts

platform intermediation in a market for differentiated products we study a two sided market where a platform attracts firms selling differentiated products and buyers interested in those products in the subgame perfect equilibrium of the game the platform fully internalises the network externalities present in the market and firms and consumers all participate in the platform with probability one the monopolist intermediary extracts all the economic rents generated in the market except when firms and consumers can trade outside the platform in which case consumers obtain a rent that corresponds to the utility they would get if they did trade outside the platform the market allocation is constraint efficient in the sense that the monopoly platform does not introduce distortions over and above those arising from the market power of the differentiated product sellers an increase in the number of retailers increases the amount of variety in the platform but at the same time increases competition as a result the platform lowers the firm fees and raises the consumer charges in contrast an increase in the extent of product differentiation raises the value of the platform for the consumers but weakens competition in this case the platform raises both the charge to the consumers and the fee for the firms

chicken and egg competition among intermediation service providers we analyze a model of imperfect price competition between intermediation service providers we insist on features that are relevant for informational intermediation via the internet the presence of indirect network externalities the possibility of using the nonexclusive services of several intermediaries and the widespread practice of price discrimination based on users identity and on usage efficient market structures emerge in equilibrium as well as some specific form of inefficient structures intermediaries have incentives to propose non exclusive services as this moderates competition and allows them to exert market power we analyze in detail the pricing and business strategies followed by intermediation services providers copyright 2003 by the rand corporation

platform competition and seller investment incentives many products and services are not sold on open platforms but on competing for profit platforms which charge buyers and sellers for access what is the effect of for profit intermediation on seller investment incentives since for profit intermediaries reduce the available rents in the market one might naively suspect that sellers have weaker investment incentives with competing for profit platforms however we show that for profit intermediation may lead to overinvestment when free access would lead to underinvestment because investment decisions affect the strength of indirect network effects and thus access prices we characterize the effect of for profit intermediation on investment incentives depending on the nature of the investment and on which side of the market singlehomes

a model and empirical estimates of worker pension coverage in the u s an important issue in labor market policy today is private pension coverage it is well known that pension benefits have grown rapidly in the post world war ii years for example pension and other benefit payments as a percentage of total employee compensation rose from 7 4 in 1953 to 13 0 by 1973 11 27 yet pension participation is far from universal the most recent estimate is that 48 of all wage and salary workers currently are covered partly in response to this the president s commission on pension policy has recommended in its final report federal legislation to establish a national minimum funded pension system which would be required of all employers 8 7 this paper attempts to explain the variation in pension coverage two opposing views of pensions having very different implications for pension policy can be identified the first is implicitly adopted by the president s commission in this view pensions are exogenous to the competitive forces of the labor market distributed on a random basis as a bonus pensions do not substitute for other forms of compensation and therefore everyone would prefer to be covered a very different theory is that pensions result from competitive forces implicit in the labor market is a market for pensions in which the supply is the outcome of firms attempting to minimize costs while demand results from workers maximizing utility by choosing the optimal package of wage and nonwage compensation an outcome of this implicit market is a trade off between pension benefits and other forms of compensation if pensions are purchased in this manner systematic differences in pension coverage should emerge some workers will prefer wages and

consumer search and double marginalization the well known double marginalization problem understates the inefficiencies arising from vertical relations in consumer search markets where consumers are uninformed about the wholesale prices charged by manufacturers to retailers consumer search provides a monopoly manufacturer with an additional incentive to increase its price worsening the double marginalization problem and lowering the manufacturer s profits nevertheless manufacturers in more competitive wholesale markets may not have an incentive to reveal their prices to consumers we show that retail prices decrease in search cost and so both industry profits and consumer surplus increase in search cost jel d11 d42 d83 l12 l25 l60 l81 in markets where consumers do not know retail prices and need to invest time and resources to get to know them they often also do not know retailers marginal costs even though consumers are not directly interested in retailers costs these costs are indicative for whether consumers should buy at the current shop or continue to search for the next offer this is particularly true when there is a significant common component in retailers costs for the same observed price at a particular retailer if the common cost is low the retailer s margin is high and it is more beneficial to check the price at the next retailer as he is likely to maintain a lower margin and hence to charge a lower price this paper studies consumer search in markets where retailers have a common marginal cost that is set by a manufacturer as a reference point we consider the unrealistic case where consumers are fully informed about the wholesale price that retailers must pay the manufacturer and show how the familiar double marginalization problem arises we then consider the more realistic setting where consumers

the role of pensions in the labor market a survey of the literature because employer sponsored group pension plans entail agreements between workers and their employers explicitly linking future payment and employment they offer an unusual window into long term employment relationships this review of recent research on pensions explores how pensions influence employee compensation retirement turnover and other matters central to the determination of labor s price and quantity over time the authors also outline some unanswered questions and difficult to reconcile findings because the pension promise involves an explicit and relatively well documented set of statements regarding future contingent payment and employment an examination of the design and operation of employersponsored group pension plans can yield important insights into the long term employment relationship specifically pension research illuminates some important labor market questions in two ways it offers insight into an important element of compensation in its own right and it furthers our understanding of labor markets in which long term

fringe benefits and labor mobility interindustry factor mobility is a crucial determinant of the income distribution effects of exogenous changes in relative commodity prices this examination of interindustry variation in wages and profits using data from manufacturing industries from

the effects of platform most favored nation clauses on competition and entry abstractin the context of sellers who sell their products through intermediary platforms a platform most favored nation pmfn clause is a contractual restriction requiring that a particular seller will not sell at a lower price through a platform other than the one with which it has the pmfn agreement contractual restrictions observed in markets for e books and travel services among other settings can be viewed as examples of this phenomenon we show that pmfn clauses typically raise platform fees and retail prices and curtail entry or skew positioning decisions by potential entrants pursuing low end business models

the agency model and mfn clauses i provide an analysis of vertical relations in markets with imperfect competition at both layers of the supply chain and where exchange is intermediated either with wholesale prices or revenue sharing contracts revenue sharing is extremely attractive to firms that are able to set the revenue shares but often makes the firms that set retail prices worse off this is so whether revenue sharing lowers or raises industry profits these results are strengthened when a market moves from the wholesale model of sales to the agency model of sales which results in retailers setting revenue shares and suppliers setting retail prices i also show that retail price parity restrictions raise industry prices these results provide a potential explanation for why many online retailers have adopted the agency model and retail price parity clauses

the incentives for resale price maintenance under imperfect information this paper considers both the incentives for and the welfare effects of resale price maintenance rpm in retail markets characterized by imperfect consumer information in markets where point of sale information on the product is essential for sales and information on prices is costly rpm permits manufacturers with some monopoly power to resolve two incentive conflicts with retailers first because retailers with price setting powers do not appropriate the gains in profit to an upstream manufacturer from actions taken to increase demand their incentives to inform consumers of the product and to set low prices are inadequate this purely vertical externality results in the classic double mark up of final prices second when consumers costs of price search vary stores offering low prices and no information can exist in the market equilibrium these discount houses free ride on the informational services of high price informing retail outlets a horizontal externality in the imperfect information setting of this paper 1 administered pricing improves monopolists profits by resolving the incentive conflict 2 the profitable use of a price floor reduces the maximum retail price charged and may reduce the average retail price 3 price floors or administered prices can be pareto improving and more likely welfare surplus improving 4 price floors are welfare improving

pension coverage and borrowing constraints using data from the 1983 survey of consumer finances and taking a measure of borrowing constraint status as an indication of a worker s discount rate we find evidence that borrowing constrained workers are less likely to be covered by a pension plan and that the borrowing constraint effect is significant only for defined benefit plans this paper examines the extent to which differences in workers rates of time preferences can explain pension coverage outcomes we argue that workers with a high rate of time preference will avoid jobs with pensions because pension saving cannot be costlessly borrowed against and they will be more reluctant to join a defined benefit than a defined contribution plan because defined benefit plans offer less flexibility in choosing a pension saving rate the existing empirical literature on pension coverage emphasizes the role of taxes incentives administrative costs and employee perceptions of default and nonportability risks 1 this study concentrates on how the ability to borrow against pension contributions affects worker pension demand

search design and broad matching we study decentralized mechanisms for allocating firms into search pools the pools are created in response to noisy preference signals provided by consumers who then browse the pools via costly random sequential search surplus maximizing search pools are implementable in symmetric nash equilibrium full extraction of the maximal surplus is implementable if and only if the distribution of consumer types satisfies a set of simple inequalities which involve the relative fractions of consumers who like different products and the bhattacharyya coefficient of similarity between their conditional signal distributions the optimal mechanism can be simulated by a keyword auction with broad matching jel c78 d44 d82

pricing product diversity and search costs a bertrand chamberlin diamond model we study price competition in the presence of search costs and product differentiation the limit cases of the model are the bertrand paradox the diamond paradox and chamberlinian monopolistic competition market prices rise with search costs and decrease with the number of firms prices may initially fall with the degree of product differentiation because more diversity leads to more search and more competition equilibrium diversity rises with search costs while the optimum level falls so entry is excessive the market failure is most pronounced for low preference for variety and high search costs

a simple model of search engine pricing we present a simple model of how a monopolistic search engine optimally determines the average relevance of firms in its search pool in our model there is a continuum of consumers who use the search engine s pool and there is a continuum of firms whose entry to the pool is restricted by a price per click set by the search engine we show that a monopolistic search engine may have an incentive to set a relatively low price per click that encourages low relevance advertisers to enter the search pool in general the ratio between the marginal and average relevance in the search pool induced by the search engine s policy is equal to the ratio between the search engine s profit per consumer and the equilibrium product price these conclusions do not change if the search engine charges a fixed access fee rather than a price per click a search engine is a platform that serves a two sided market it is based on a technology that potentially improves the quality of consumer search before the advent of internet search engines yellow pages were the closest example of a search engine firms pay to be included in the yellow pages with various degrees of prominence the yellow pages organise the set of firms according to some categorisation system in internet environments consumers use search engines by submitting a query in a language dictated by the search engine the objects that the query elicits depend on the search engine s

optimal auction design in two sided markets a key feature of online markets for advertising e g sponsored links is that clicking rates depend on the searchers expectations that the platform selects relevant advertisers this article studies auction design by a platform that maximizes profits in the long run where clicking rates are mechanism dependent in line with the practice of the major search engines the revenue maximizing mechanism is a scoring auction that combines the willingness to pay and the relevance to searchers of advertisers by trading off rent extraction and clicking volume this mechanism works as a cross subsidization device between searchers and advertisers

search design and market structure the internet has made consumer search easier with consequences for prices industry structure and the kinds of products oered we explore these conse quences in a rich but tractable model that allows for strategic design choices a polarized market structure results where some rms choose designs aimed at broad based audiences while others target narrow niches such an industry structure can arise even when all rms and consumers are ex ante identical we analyze the eect of reduced search costs and nd results consistent with the reported prevalence of niche goods and the long tail and superstar phe nomena in particular the model suggests that long tail eects arise when there is a wide range of potential designs relative to vertical heterogeneity among rms

analysis on the nexus of economic growth fossil fuel energy consumption co2 emissions and oil price in africa based on a pmg panel ardl approach abstract in this study the causal link amid economic growth fossil fuel energy consumption carbon emissions and oil price was empirically tested from 1990 to 2015 by using a panel of 22 african countries the sample of african countries was divided into two subgroups namely oil exporters and non oil exporters using the pmg panel ardl and panel econometric methods heterogeneity and cross sectional dependence were considered to examine the long and short term dynamic relationships as well as validity of a proposed model findings from the pesaran yamagata homogeneity test pesaran cd test cips and cadf panel unit root tests and westerlund edgerton bootstrap panel cointegration indicated the panel time series data has heterogeneity and cross sectional dependence analysed variables are stationary and cointegrated respectively with respect to the pmg panel ardl estimation method it was evidenced that there exist i a bilateral causal link flanked by fossil fuel energy consumption and economic growth as well as fossil fuel energy consumption and carbon emissions in long and shot terms for all panels ii a unilateral causality from carbon emissions to economic growth in long term and short term for non oil exporters nonetheless a bilateral causal relationship only in long term for oil exporting countries and iii a unilateral cause and effect link from oil prices to economic growth energy consumption fossil fuel and carbon emission across all country groups in long and short terms policy recommendations are further discussed

information gatekeepers on the internet and the competitiveness of homogeneous product markets we examine the equilibrium interaction between a market for price information controlled by a gatekeeper and the homogenous product market it serves the gatekeeper charges fees to firms that advertise prices on its internet site and to consumers who access the list of advertised prices gatekeeper profits are maximized in an equilibrium where a the product market exhibits price dispersion b access fees are sufficiently low that all consumers subscribe c advertising fees exceed socially optimal levels thus inducing partial firm participation and d advertised prices are below unadvertised prices introducing the market for information has ambiguous social welfare effects

true monopolistic competition as a result of imperfect information the paper restates hart s 1985a 1985b definition of large group monopolistic competition distinguishes it from oligopolistic competition and raises the question of whether there are reasonable circumstances that give rise to true monopolistic competition as defined the purpose is to show that consumers imperfect information may create conditions that will turn an otherwise oligopolistic market into a truly monopolistically competitive one