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Export or Merge? Proximity vs. Concentration in Product Space

Muendler, Marc-Andreas - CESifo - 2013

This paper proposes a proximity-concentration tradeoff in product space as a determinant of horizontal foreign direct investment (FDI). Firms that enter a foreign market by exporting are able to capture consumer surplus from introducing a differentiated product with characteristics that the...

Persistent link: https://www.econbiz.de/10010732345

Market Power of the Input Supplier, Technology Transfer and Consumer Welfare

Cao, Jiyun; Mukherjee, Arijit - CESifo - 2014

It is believed that market power of the input supplier, charging a linear price, is detrimental for the consumers since it creates the double marginalisation problem. We show that this view may not be true if the final goods producers can adopt strategies to reduce rent extraction by the input...

Persistent link: https://www.econbiz.de/10011086454

Limited Consumer Attention in International Trade

Egger, Hartmut; Falkinger, Josef - CESifo - 2013

attention, thereby triggering wasteful advertising, and it may divert purchases to imported goods at an inefficient scale …. Wasteful advertising provides scope for policy intervention in the form of an advertising tax. However, the tax instrument … cannot eliminate inefficient diversion of consumer purchases to imports. Therefore, even under an optimal advertising tax …

Persistent link: https://www.econbiz.de/10010631774

Men Vote in Mars, Women Vote in Venus: A Survey Experiment in the Field

Galasso, Vincenzo; Nannicini, Tommaso - CESifo - 2013

bundle of advertising tools (videos, texts, slogans). Stark gender differences emerge. Negative advertising increases men … conflicting evidence on the effect of negative vs. positive advertising, as the average impact may wash out when aggregated across …

Persistent link: https://www.econbiz.de/10010679376

Nonlinear Pricing and Exclusion: I. Buyer Opportunism

Choné, Philippe; Linnemer, Laurent - CESifo - 2014

We study the exclusionary properties of nonlinear price-quantity schedules in an Aghion-Bolton style model with elastic demand and product differentiation. We distinguish three regimes depending on whether and how the price of the incumbent good is linked to the quantity purchased from the rival...

Persistent link: https://www.econbiz.de/10010795341

Nonlinear Pricing and Exclusion: II. Must-Stock Products

Choné, Philippe; Linnemer, Laurent - CESifo - 2014

We adapt the exclusion model of Choné and Linnemer (2014) to reflect the notion that dominant firms are unavoidable trading partners. In particular, we introduce the share of the buyer’s demand that can be addressed by the rival as a new dimension of uncertainty. Nonlinear price-quantity...

Persistent link: https://www.econbiz.de/10010795345

Levelized Product Cost: Concept and Decision Relevance

Reichelstein, Stefan; Rohlfing-Bastian, Anna - CESifo - 2014

This paper examines a life-cycle cost concept that applies to both manufacturing and service industries in which upfront capacity investments are essential. Borrowing from the energy literature, we refer to this cost measure as the levelized product cost (LC). Per unit of output, the levelized...

Persistent link: https://www.econbiz.de/10010736750

Complexity, Efficiency, and Fairness of Multi-Product Monopoly Pricing

Miravete, Eugenio J.; Seim, Katja; Thurk, Jeff - CESifo - 2014

The Pennsylvania Liquor Control Board administers the purchase and sale of wine and spirits and is mandated to charge a uniform 30% markup on all products. We use an estimated discrete choice model of demand for spirits, together with information on wholesale prices, to assess the implications...

Persistent link: https://www.econbiz.de/10010752157

Limit Pricing and the (In)Effectiveness of the Carbon Tax

Sá, Saraly Andrade de; Daubanes, Julien - CESifo - 2014

Demand for oil is very price inelastic. Facing such demand, an extractive cartel induces the highest price that does not destroy its demand, unlike the conventional Hotelling analysis: the cartel tolerates ordinary substitutes to its oil but deters high-potential ones. Limit-pricing equilibria...

Persistent link: https://www.econbiz.de/10010960646

Payment Evasion

Buehler, Stefan; Halbheer, Daniel; Lechner, Michael - CESifo - 2015

This paper models payment evasion as a source of profit by letting the firm choose the purchase price and the fine imposed on detected payment evaders. For a given price and fine, the consumers purchase, evade payment, or choose the outside option. We show that payment evasion leads to a form of...

Persistent link: https://www.econbiz.de/10011277179