The Competitive Effects of Information Sharing

Asker, John; Fershtman, Chaim; Ji-hye, Jeon; Pakes, Ariél

doi:10.3386/w22836

Cited by 8 publications

(5 citation statements)

References 21 publications

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“…Since this is a statistic formed from moment inequalities (in contrast to moment equalities) the distribution of this statistic does not have a pivotal form and so needs to be simulated. However the critical values for it are relatively easy to simulate and are compared to the actual value of the test statistic to determine whether to accept the null (for details see Asker, Fershtman, Jeon, and Pakes 2014). rently electricity is not storable and has extremely inelastic demand might lead to sharp price increases in periods of high demand.…”

Section: Computational Results From An Examplementioning

confidence: 99%

“…In these cases we will want to impose conditions that ensure that the equilibria we compute are consistent with this knowledge. To accommodate this possibility, Asker, Fershtman, Jeon, and Pakes (2014) propose an additional condition on equilibrium play that insures that agents' perceptions of the outcomes from all feasible actions from points in the recurrent class are consistent with the outcomes that those actions would generate. They label the new condition "boundary consistency" and provide a computational simple test to determine whether the boundary consistency condition is satisfied for a given set of policies.…”

Section: Multiplicity Of Equilibrium Policiesmentioning

confidence: 99%

“…The null hypothesis states that the value of all sample paths from feasible but non-optimal policies are less than the value of sample paths from optimal play from the same state. Asker, Fershtman, Jeon, and Pakes (2014), show how to formulate a test of this null 18 . The test should rule out equilibria that are supported by percep- 18 The test statistic is formed by taking a weighted average of the positive parts of the difference between the tions of play outside of R that are unrealistic in the sense that they do not accord with the profits to be earned in those locations.…”

Section: Multiplicity Of Equilibrium Policiesmentioning

confidence: 99%

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Methodological Issues in Analyzing Market Dynamics

Pakes¹

2016

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This paper investigates progress in the development of models capable of empirically analyzing the evolution of industries. It starts with a parallel between the development of empirical frameworks for static and dynamic analysis of industries: both adapted their frameworks from models taken from economic theory. The dynamic framework has had its successes: it led to developments that have enabled us to control for dynamic phenomena in static empirical models and to useful computational theory. However when important characteristics of industries were integrated into that framework it generated complexities which both hindered empirical work on dynamics per se, and made it unrealistic as a model of agent behavior. This paper suggests a simpler alternative paradigm, one which need not maintain all the traditional theoretical restrictions, but does maintain the core theoretical idea of optimizing subject to an information set. It then discusses estimation, computation, and an example within that paradigm.

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Section: Computational Results From An Examplementioning

confidence: 99%

Section: Multiplicity Of Equilibrium Policiesmentioning

confidence: 99%

Section: Multiplicity Of Equilibrium Policiesmentioning

confidence: 99%

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Methodological Issues in Analyzing Market Dynamics

Pakes¹

2016

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“…At each step of this simulation, the value function is updated with the payoffs realized for each action taken or not taken. The key components that are stored in memory are the current state of the industry at each iteration k, called Ω k , the stored value functions 20 For another application, see also Asker et al (2016).…”

mentioning

confidence: 99%

Horizontal Mergers and Innovation in Concentrated Industries

Hollenbeck

2015

SSRN Journal

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The relationship between mergers and the long run rate of innovation is an open question in antitrust economics. I develop a framework to examine this in a dynamic oligopoly model with endogenous investment, entry, exit and horizontal mergers. Firms produce vertically differentiated goods and may merge with rival firms to gain market power and potentially increase the quality of their product. I extend previous work on dynamic mergers by allowing for products differentiated on quality with competition in prices and an endogenous long run rate of innovation. In equilibrium, horizontal mergers are almost entirely harmful to consumers in the short run, but the prospect of a buyout creates a powerful incentive for firms to preemptively enter the industry and invest to make themselves an attractive merger partner. The result is significantly higher rate of innovation with mergers than without and significantly higher long-run consumer welfare as well. Further results explore the circumstances under which this result is likely to hold. In order for the long run increase in innovation to outweigh the short run harm to consumers caused by mergers, entry costs must be low, entrants and incumbents must both have the ability to innovate rapidly, and the degree of horizontal product differentiation must be low. Alternatively, when mergers can generate innovation directly by allowing firms to combine their products they typically benefit consumers in both the short run and long run.

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“…In these cases we will want to impose conditions that insure that the equilibria we compute are consistent with this knowledge. To accommodate this possibility, Asker, Fershtman, Jeon, and Pakes (2015) propose an additional condition on equilibrium play that insures that agents' perceptions of the outcomes from all feasible actions from points in the recurrent class are consistent with the outcomes that those actions would generate. They label the new condition "boundary consistency" and provide a computational simple test to determine whether the boundary consistency condition is satisfied for a given set of policies.…”

mentioning

confidence: 99%

Empirical Tools and Competition Analysis: Past Progress and Current Problems

Pakes

2016

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I review a subset of the empirical tools available for competition analysis. The tools discussed are those needed for the empirical analysis of; demand, production efficiency, product repositioning, and the evolution of market structure. Where relevant I start with a brief review of tools developed in the 1990's that have recently been incorporated into the analysis of actual policy. The focus is on providing an overview of new developments; both those that are easy to implement, and those that are not quite at that stage yet show promise. * This is a revised version of my Laffont lecture, given at the 2015 CRESSE conference, Crete. I thank the editor and a referee for extensive helpful comments.2

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The Competitive Effects of Information Sharing

Cited by 8 publications

References 21 publications

Methodological Issues in Analyzing Market Dynamics

Methodological Issues in Analyzing Market Dynamics

Horizontal Mergers and Innovation in Concentrated Industries

Empirical Tools and Competition Analysis: Past Progress and Current Problems

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