Selective Price Cuts and Price Discrimination Bans in Network Industries

In order to encourage competition in network-based industries such as telecommunications, some jurisdictions have adopted regulatory rules which prevent the incumbent service provider from selectively cutting prices in response to market entry. Given such bans on price discrimination, the incumbent cannot react to competition by selectively adjusting prices, based on the competitive situation in a given market, but has to maintain the same price across all markets. This paper analyses the welfare effects of such a rule for both one-way networks (access model) and two-way networks (interconnection model) when consumers have switching costs. We find that, even though bans on price discrimination can induce inefficient entry for a range of parameter constellations, there are also cases where they induce efficient market entry. This is the more likely to be the case the higher the fixed costs of entry.     

Competition and Competition Policy in a Data-Driven Economy

Intereconomics - Data has become a crucial resource to increase firms' efficiency in product design, production, distribution, marketing and virtually all parts of the value chain. From a...     

Google,Facebook, Amazon,eBay: Is the Internet driving competition or market monopolization?

This paper discusses the general characteristics of online markets from a competition theory perspective and the implications for competition policy. Three important Internet markets are analyzed in more detail: search engines, online auction platforms, and social networks. Given the high level of market concentration and the development of competition over time, we use our theoretical insights to examine whether (a) leading Internet platforms have non-temporary market power and, based on this analysis, (b) whether any specific market regulation beyond general competition law rules is warranted in these three online markets.     

How interethnic marriages affect the educational attainment of children: Evidence from a natural experiment

The allocation of Moluccan immigrants across towns and villages at arrival in the Netherlands and the subsequent formation of interethnic marriages resemble a natural experiment. The exogenous variation in marriage formation allows us to estimate the causal effect of interethnic marriages on the educational attainment of children from such marriages. We find that children from Moluccan fathers and native mothers have a higher educational attainment than children from ethnic homogeneous Moluccan couples or children from a Moluccan mother and a native father.     

Warum und wie die Liberalisierung des Cannabismarktes in Deutschland erfolgen sollte

Wirtschaftsdienst - Der vorliegende Beitrag fasst die Argumente für eine Legalisierung von Cannabis zusammen und macht Vorschläge zur Ausgestaltung des Regulierungsrahmens. Hauptargument...