Applying “Merger Guidelines” market definition to (de)regulatory policy: Pros and cons

Brennan, Timothy J.

doi:10.1016/j.telpol.2008.04.003

Cited by 9 publications

(2 citation statements)

References 6 publications

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“…Consumption of these services takes up an ever-larger share of many consumers' leisure time. Firms are faced with the challenge of how to price their offerings of information goods, since a cost-plus model is no longer appropriate; see [8], [10] and [17].…”

Section: Introductionmentioning

confidence: 99%

Content and Access Provision in a Discrete Competition Model

Potgieter¹,

Howell²

2021

ORION

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The non-rival, non-excludable and infinitely expansible characteristics of digital goods with marginal cost of zero strongly favours the use of bundling strategies. Theoretical tractability requires most models in the current literature to make highly stylized assumptions, rarely observed or anticipated in the real-life situations, motivating inquiry. This paper considers a competition model in which: * the firms, consumers and differentiated products are finite in number; * prices are discrete and not continuous; * consumers may purchase multiple items in a single product category where the degree of complementarity or substitutability of the product categories can also vary across consumers; and * where consumer-specific cost savings are obtained when purchasing multiple items from the same firm. Approximate solutions are obtained through numerical simulation. Firms act in concert to maximise the total firm revenue. Our main finding is that the interplay between maximal firm revenue, consumer surplus and prices is very complex and that high firm revenue and high consumer surplus are not antithetic. It suggests also that consumer surplus and market concentration are not necessarily related. Many market outcomes that are observed may be due to chance rather than design as diverse outcomes can accompany situations that are, to the firms, difficult to distinguish.

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Section: Introductionmentioning

confidence: 99%

Content and Access Provision in a Discrete Competition Model

Potgieter¹,

Howell²

2021

ORION

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“…What constitutes acceptable competitive behaviour in these markets likely differs substantially from markets for goods with standard economic characteristics upon which the current body of competition law and regulation has been based. This has led to questions about whether the current tools used to specify and enforce competition laws are suitable for governing commercial activity in a digital economy (Brennan, 2008;Evans & Schmalensee, 2013;Salop & Culley, 2014).…”

Section: Introductionmentioning

confidence: 99%

Bundles of trouble: Can competition law adapt to digital pricing innovation?

Howell

Potgieter

2018

Competition and Regulation in Network Industries

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The burgeoning digital economy is characterized by bundled offers of goods and services, many with near-zero marginal cost, in highly concentrated markets often exhibiting competition 'for the market' and 'winner-takes-all' outcomes. Acceptable competitive behaviour in these markets likely differs substantially from that in markets for goods with standard economic characteristics. The suitability of current tools used to specify and enforce competition laws for governing commercial activity in a digital economy dominated by bundled offers is questionable. Classical market analysis focuses narrowly on individual product markets. In bundle product markets, quantitative econometric analysis becomes computationally intractable as the own-and crosselasticities increase exponentially with the number of products in the bundle and providers in the market. Furthermore, classic econometric analysis cannot inform decisions in markets where bundles are yet to be offered. Simulation and numerical analysis of hypothetical scenarios under different consumer preferences and firm strategic choices offers another means of evaluating effects of intervention in specific circumstances. We illustrate using a model based on the (declined) proposed New Zealand merger between Sky Television and Vodafone and make recommendations for both theory and practice as to how simulation analysis can be used to complement more conventional competition analyses.

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An Expanded Distribution Utility Business Model

Brennan¹

2014

Distributed Generation and Its Implications for the Utility Industry

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Applying “Merger Guidelines” market definition to (de)regulatory policy: Pros and cons

Cited by 9 publications

References 6 publications

Content and Access Provision in a Discrete Competition Model

Content and Access Provision in a Discrete Competition Model

Bundles of trouble: Can competition law adapt to digital pricing innovation?

An Expanded Distribution Utility Business Model

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