Competition and Price Discrimination: Evidence from the Parking Garage Industry

We study the relationship between competition and price discrimination through an empirical examination of hourly price schedules in the parking garage industry. We find that the degree of price schedule curvature decreases with competition, implying a greater proportionate drop in low‐end prices than in high‐end prices when competition intensifies. Our findings suggest that competition constrains a firm's capacity to exercise price discrimination, confirming the classic textbook theory. We also offer possible explanations for our findings, including a search cost explanation, for which we find some support in the data.     

Exclusive Contracts And Market Power: Evidence From Ocean Shipping

There is a substantial theoretical literature on the potential effects of loyalty contracts, but relatively little empirical work. We employ the event study methodology to examine the competitive effects of exclusionary contracts in the ocean shipping industry, where they were the subject of an extended legal and political struggle. We find that some of the most important events in this conflict caused significant changes in shipping firms' stock returns, indicating exclusive contracts increased their profits. We then examine the effect of these events on net exporting industries' stock returns, and provide evidence that these contracts contributed to carriers' market power.     

Price Dispersion and Price Discrimination: Empirical Evidence from a Spot Market for Water

This note shows the existence of price dispersion and pricediscrimination in a spot market for water.Several behaviors contributing to this dispersion/discrimination arefound for both the seller and buyer in this relatively competitive market,and examples are given of each. Using some previous theoretical work,the common thread linking the differing behaviors is shown to bediffering levels of information and search costs.     

Flexible Wage Contracts,Temporary Jobs,and Firm Performance: Evidence From Italian Firms

This study focuses on the effects of decentralized wage schemes and temporary forms of employment on firm performance. The effect of monetary incentives on workers' effort and firm performance is a central topic in economics. According to the principal‐agent paradigm, firms (the principal) have to link employees' remuneration schemes to any verifiable indicator of performance to avoid opportunistic behavior. The empirical evidence shows that financial incentives have the potential to exert strong effects on indicators of firm performance, such as productivity and worker absenteeism, although the degree of effectiveness of such schemes varies significantly according to the institutional/economic context in which firms operate. From both a theoretical and empirical point of view, the prediction on the effects of temporary types of employment on effort and productivity is less neat. In light of these considerations, this study uses a sample of Italian firms to provide further empirical evidence on whether and to what extent performance‐related pay schemes and contract flexibility affect workers' effort (in terms of absenteeism) and, in turn, firm productivity. These effects are analyzed for different types of workers (white collar vs. blue collar), working in workplaces characterized by a different degree of uncertainty and risk and in firms operating in different economic and institutional settings. Our results show that wage flexibility has a significant effect on effort and then on firm's productivity and that white‐collar workers are more responsive to monetary incentives than blue‐collar workers. Moreover, the presence of a large share of temporary contracts, implying a lower dismissal probability for permanent workers and a deterioration of the working environment, appears to reduce workers' motivation and effort.     

Missing Price Information and Its Impact on Equilibrium Price Dispersion: Evidence From Gasoline Signboards*

This article seeks to quantify the importance of price information in reducing consumer search costs and equilibrium price dispersion in a competitive setting. It exploits a natural experiment in the retail gasoline industry in which stations post the prices of only certain grades of gasoline on large street-side signboards, and not others, except where required by law. Differential-by-grade signboard information predicts a specific curvature in price dispersion across grades, and differentiates itself from other noninformational factors such as income and cost. The impact of readily-available price information on search and price dispersion is found to be exceptionally large.     

Opting Out,Collective Contracts and Labour Flexibility: Firm-Level Evidence for The Italian Case

This article analyses the role of deviations from higher level collective agreements adopted in firm-level bargaining to regain higher labour mobility, net positive employment effects and a resurgence of labour productivity. Using Italian firm-level data, after performing preliminary pooled ordinary least squares and fixed effects estimates, we adopt a difference-in-difference approach combined with a propensity score matching. All the estimations show that opting out clauses notably increases both hiring and separations, but without significant variations in terms of net employment. In addition, no significant labour productivity gains are obtained. The only significant change concerns the increase in the share of temporary workers.     

Price Discrimination with Demarketing

We study how demarketing interacts with pricing decisions to explain why and when it can be employed as the seller's optimal strategy. In our model, a monopolistic seller offers different price‐quality bundles of the product. A consumer's preference is private information. With demarketing, consumers must make a costly effort to purchase and/or utilize the product, whereas with marketing, the seller instead makes the effort so that the consumer's purchasing decision is independent of the cost of effort. Our result suggests that, for small or large effort costs, it is optimal for the seller to engage in marketing. For intermediate effort costs, however, demarketing can be optimal. With demarketing, the seller induces only the consumers with high valuation to make transaction effort. By doing so, the seller can price discriminate more effectively, thus extracting more surplus. We extend our analysis to the case where the seller can offer special deals through exclusive sales channels along with demarketing. Then, demarketing can be optimal even for large costs of effort.     

Contigent Price Contracts and the Efficiency of Housing Markets

Frequently, the response of housing markets to a large negative demand shock is a period during which the liquidity of housing declines, but the price at which transactions take place changes little. In this paper we show that a decline in liquidity can result from the inabilities of sellers and buyers to insure against post-shock price uncertainty. We conclude, that the introduction of a risk-sharing contingent price contract may increase the post-shock liquidity of housing by providing insurance against post-shock price uncertainty. Finally, we show that a mutually agreeable contingent price contract will always exist, even when sellers are excessively optimistic.     

Contracts as Options: Some Evidence from Condominium Developments

This paper values the real estate option to purchase contract in a contingent claims framework. The model is an application of the Black and Scholes option pricing model. Observed market data on the sale of condominiums are used to test if the option is competitively priced under various assumptions regarding the expected instantaneous variance of the condominium price. Simulation results suggest that standard industry practices of charging a fixed amount for the option to purchase roughly conform to pricing behavior dictated by the option pricing model.     

Optimal Pricing Strategy in the Case of Price Dispersion: New Evidence from the Tokyo Housing Market

We adopt a multistage search model, in which the home seller's reservation price is determined by her or his opportunity cost, search cost, discount rate and additional market parameters. The model indicates that a greater dispersion in offer prices leads to higher reservation and optimal asking prices. A unique dataset from the Tokyo condominium resale market enables us to test those modeled hypotheses. Empirical results indicate that a one percentage point increase in the standard deviation of submarket transaction prices results in a two‐tenths of a percent increase in the initial asking price and in the final transaction price. Increases in the dispersion of market prices enhance the probabilities of a successful transaction and/or an accelerated sale.     

Input Price Discrimination and Allocation Efficiency

This research examines the effects of input price discrimination on allocation efficiency and social welfare. Instead of assuming constant marginal costs, we allow downstream firms to produce under increasing marginal costs. When downstream firms operate in separate markets, even though total output remains unchanged, consumer surplus and social welfare could be greater under discriminatory pricing than under uniform pricing. Moreover, the social desirability of input price discrimination can still hold true when downstream firms compete either in Cournot or Bertrand fashion.

     

Third-Degree Price Discrimination With Interdependent Demands

This paper analyzes the price, output, and welfare effects of third-degree price discrimination for a monopolist who sells in two interdependent markets. The case where the two goods sold by the monopolist are complements is analyzed as well as the more typical case where the two goods are substitutes. The economic effects of price discrimination are shown to depend on the type and strength of demand interdependence, the curvature of the demands and the slope of marginal cost. The circumstances under which price discrimination causes both market prices to either rise or fall are also analyzed.     

Spatial Price Discrimination with Heterogeneous Firms

In this paper we aim to explain intuitively heterogeneous firms’ optimal location decisions in a simple spatial market. To do so, we present and solve a four‐stage game of entry, location, pricing and consumption in a spatial price discrimination framework with arbitrarily many heterogeneous firms. We provide a unique equilibrium outcome without imposing restrictions on the distribution of marginal costs across firms.     

Peak-Load Versus Discriminatory Pricing: Evidence from the Golf Industry

Using a unique dataset on the golf industry we analyze the weekend premium in golf course fees. Since both peak-load pricing and price discrimination may be at play, we attempt to separate these two forms of pricing. We find that as competition increases there is a decrease in the weekend premium, which we attribute to price discrimination. Additionally, we find that resort courses and courses that are heavily dependent on tourism have less differential pricing, which we attribute to less peak demand and less peak-load pricing.     

Choice of Mortgage Contracts: Evidence from the Survey of Consumer Finances

This study revisits the empirical question of the determinants of the choice between fixed‐ and adjustable‐rate mortgages using data from the Survey of Consumer Finances that overcome some of the data limitations in previous studies. The results from a logit model of mortgage choice indicate that pricing variables and affordability are important considerations. We also find that factors, such as mobility expectations, income volatility and attitudes toward financial risk largely influence mortgage choice, with more risk‐averse borrowers preferring fixed‐rate mortgages. For households that are less risk averse, the mortgage type choice decision is less sensitive to pricing variables and income volatility, and affordability factors are not significant. These findings provide empirical support that underscores the importance of attitudes toward risks in mortgage choice.     

First Degree Price Discrimination Goes to School

Personalized pricing is widely discussed but seldom observed, making studies of its efficacy rare. Yet, first degree price discrimination is common in the pricing of higher education, and I use data on prices and the characteristics of students admitted to a professional graduate program at a public university to estimate a matriculation demand function. I then derive linear pricing functions that maximize revenue for a target number of students. By allowing these functions to depend on progressively richer sets of observables, I explore the effect of personalization of pricing on profit. Tailoring prices to a one‐dimensional measure of student quality would raise revenue by 2.2 per cent above the revenue with uniform pricing. Pricing based on both student quality and state residency raises revenue by 8.4 per cent, and further tailoring based on available observables raises prices 9.0 per cent above the maximum revenue under uniform pricing. Pricing that obeys current statutory tuition limits raises revenue less but still by just over half as much. I also infer the welfare weights that the pricing process implicitly attaches to student characteristics.     

Payment Card Interchange Fees and Price Discrimination

We consider the implications of platform price discrimination in the context of card platforms. Despite the platform's ability to price discriminate, we show that it will set fees for card usage that are too low, resulting in excessive usage of cards. We show this bias remains even if card fees (or rewards) can be conditioned on each type of retailer that the cardholder transacts with. We use our model to consider the European Commission's objection to the rules card platforms have used to sustain differential interchange fees across European countries.     

Pro-competitive Price Beating Guarantees: Experimental Evidence

We report experimental results on duopoly pricing with and without price beating guarantees (PBG). In two control treatments, price beating is either imposed as an industry-wide rule or offered as a business strategy. Our major finding is that when price beating guarantees are imposed as a rule or offered as an option, effective prices are equal to or lower than those in a baseline treatment in which price beating is forbidden. Also, when price beating is treated as a business strategy, less than 50% of subjects adopted the guarantee, suggesting that, subjects realize the pro-competitive effects of the guarantee. JEL Classifications: C91, L11.This revised version was published online in April 2005 with corrections to one of the authors name and to the page numbering.     

建材价格异动对固定价格合同履行影响的研究

固定价格合同是常见的施工承包合同形式,但是采用固定价格合同时承包方将承受较高的风险,特别是近年来建材价格异常变动加剧,使固定价格合同难以正常履行.<合同法>等相关法律为固定价格合同在难以履行的情况下进行调整提供了法律依据,2009年最高人民法院以司法解释的形式明确了情势变更原则,使得应用情势变更原则调整固定价格合同有法可依.文章对南京市施工企业的实地调研为固定价格合同的调整和情势变更原则的应用提供了现实依据.