We investigate the welfare impact of parallel imports using a large panel data set containing monthly information on sales, ex-factory prices, and further product characteristics for all 700 anti-diabetic drugs sold in Germany between 2004 and 2010. We estimate a two-stage nested logit model of...

We analyze the role of consumer expectations in a Hotelling model of price competition when products exhibit network effects. Expectations can be strong (stubborn), weak (price-sensitive) or partially stubborn (a mix of weak and strong). As a rule, the price-sensitivity of demand declines when...

It is increasingly observable that competitors in different industries share customer data, which can be used for targeted pricing. We propose a modified Hotelling model with two-dimensional consumer heterogeneity to analyze the incentives for such sharing and its ensuing welfare effects. We...

Katz (1987), DeGraba (1990), and Yoshida (2000) have formulated theories that price discrimination bans in intermediary goods markets tend to have positive effects on allocative, dynamic and productive efficiency, respectively. We show that none of these results is robust vis-à-vis endogenous...

We analyze oligopolistic third-degree price discrimination relative to uniform pricing, when markets are always covered. Pricing equilibria are critically determined by supply-side features such as the number of firms and their marginal cost differences. It follows that each firm's Lerner index...

We study zero-rating, a practice whereby an Internet service provider (ISP) that limits retail data consumption exempts certain content from that limit. This practice is particularly controversial when an ISP zero-rates its own vertically integrated content, because the data limit and ensuing...

This paper explores the effects that collusion can have in newspaper markets where firms compete for advertising as well as for readership. We compare three modes of competition: i) competition in the advertising and the reader market, ii) semi-collusion over advertising (with competition in the...

We study firms' advertising strategies in an oligopolistic market in which both non-comparative and comparative advertising are present. We show that in equilibrium firms mix over the two types of advertising, with the intensity of comparative advertising exceeding that of non-comparative...

Relocation of production to countries with low labour cost have induced increased labour market flexibility, which has been praised as a silver bullet for economic growth and low unemployment. Within a unionised oligopoly framework, in which a multi-national firm has the option to relocate its...

This paper revisits the relationship between transparency on the consumer side and product variety as analyzed in Schultz (2009). We identify two welfare effects of transparency. More transparency decreases price-cost margins which is beneficial forwelfare. On the other hand, more transparency...