Current Unpublished Work
“Equilibrium Mergers in a Composite Good Industry with
Efficiencies”,
co-authored with Cristina Pardo-García
Abstract: This
paper studies equilibrium merging behavior in
composite good industries. Component producers face the option to either merge
with a similar component producer (horizontal merger) or a complementary one
(complementary merger) of a composite good. Focusing only on strategic reasons,
complementary mergers arise at equilibrium only when composite goods are very differentiated while horizontal mergers otherwise.
Next, when efficiencies are considered, the level of marginal cost saving
required for a horizontal merger in a composite industry to result in a
non-increase in the upward price pressure index (UPPI) is greater as compared
with the one in a regular industry. This result can be used by antitrust
authorities to be more demanding when dealing with horizontal mergers in
composite goods industries.
Keywords: composite goods, substitutes, complements, horizontal merger,
complementary merger, efficiency effects, UPPI, diversion ratio.
“Licensing Standards to Competitors”,
Abstract: We
consider licensing of any technology that exhibits network externalities. We
study the case where the licensor is one of the n firms competing in an
oligopolistic market. In such a context a new incentive for licensing (added to
the ex-ante and
ex-post ones) appears when the network is increased by the licensing
policy, the network incentive. Sufficient conditions for market
standardization are provided. A drastic innovation may be licensed even when
the nonlicensing policy would imply the licensor
being a monopolist. It is not always guaranteed that the licensor sets a
royalty amount that extracts all technological rents from licensees. Finally,
an example with a three firm industry and a linear externality is solved
finding that fees are superior to royalties from both the social and the
licensor point of view.
Keywords: Licensing, network externalities, standardization.
“Manufacturers’ Commitments and the Number of
Retailers”, co-authored with Rafael Moner-Colonques and Yair Tauman.
Abstract: We
examine the strategic incentives of two manufacturers in a homogeneous good
market to use independent agents to compete in the market. We find that the Subgame Perfect Nash equilibrium involves that each
manufacturer is not an active seller and uses only one retailer. Furthermore,
the variable part of the two-part tariff is set below the marginal cost of
production. The equilibrium is Pareto dominated by the outcome obtained when
manufacturers sell themselves directly to consumers without using retailers.
Keywords: Retail distribution, strategic incentives.