Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?

This paper considers the relationship that exists between two lottery products offered simultaneously in the same state, a smaller lottery game run by the individual state and a larger multi-state game run in coordination with other states. The primary issue is whether the two different products should be considered substitutes or complements for one another. The question is considered from two different perspectives that lead to a conclusion that while the two products do tend to be complements to one another, overall the individually run state lottery games experience a reduction in sales from the presence of the multi-state game.     

Price‐Match Announcements in a Consumer Search Duopoly

Using a model of sequential search, we show that announcements to price‐match raise prices by altering consumer search behavior. First, price‐matching diminishes firms’ incentives to lower prices to attract consumers who have no search costs. Second, for consumers with positive search costs, price‐matching lowers the marginal benefit of search, inducing them to accept higher prices. Finally, price‐matching can lead to asymmetric equilibria where one firm runs fewer sales and both firms tend to offer smaller discounts than in a symmetric equilibrium. Price increases grow in the proportion of consumers who invoke price‐matching guarantees and in the level of equilibrium asymmetry.     

CSR in an Asymmetric Duopoly with Environmental Externality

We investigate a linear state differential game describing an asymmetric Cournot duopoly with capacity accumulation á la Ramsey and a negative environmental externality (pollution), in which one of the firms has adopted corporate social responsibility (CSR) in its statute, and therefore includes consumer surplus and the environmental effects of production in its objective function. If the market is sufficiently large, the CSR firm sells more, accumulates more capital, and earns higher profits than its profit‐seeking rival.     

How Do Retailers Price Beer During Periods of Peak Demand? Evidence from Game Weeks of the German Bundesliga

This article considers retail beer pricing during game weeks of the German Bundesliga. German consumers exhibit a high degree of brand‐loyalty in their preference for regionally crafted beers, and we exploit the regional brand‐loyalty of German beer consumers to identify brand‐level demand shocks for beers preferred by the home team's fans and visiting team's fans during Bundesliga game weeks. We find retailer price adjustments at the category level mask a considerably more nuanced pricing behavior at the brand level. Retailers in regions hosting Bundesliga games significantly increase beer prices at the category level during game weeks; however, at the brand level, we find retailers selectively discount prices on the home team's sponsored beers and systematically raise prices on the visiting team's sponsored beers. Our findings are consistent with a “tourist–natives” model of retail pricing during periods of increased demand in the German beer market.     

Good Girl,Bad Boy? Evidence Consistent with Collusion in Professional Tennis

We identify professional tennis matches where one player competes for extraordinarily high payoffs while their opposition does not. Players “on the bubble” of direct qualification to upcoming Grand Slam events face substantially higher stakes than opponents, which presents an opportunity for collusion. Our findings produce evidence that is consistent with the hypothesis of unethical behavior taking place on the men's tour, as bubble players are 5.1 percentage points more likely to beat better ranked opponents than in comparable nonbubble matches. However, no such evidence emerges when analyzing women's tennis. We find additional support for the hypothesis of match‐fixing activities on the men's tour from analyzing the occurrence of tie‐breaks and the fact that our results become stronger once monetary incentives were increased after the 2013 season. Finally, the betting market does not predict this phenomenon, further confirming our suspicion of irregular activities.     

Downstream Research Joint Venture with Upstream Market Power

In a vertically related industry, we examine the downstream firms' incentives to invest in cost‐reducing Research and Development (R&D), and to form a Research Joint Venture (RJV), under two alternative structures of input supply: exclusive vertical relations and a single supplier. In contrast to the “hold‐up” argument, in which downstream firms invest non‐cooperatively and spillovers are low, R&D investments are higher under a single supplier than under competing vertical chains. Downstream firms' incentives to form a RJV are also stronger in the former case than they are in the latter. We identify conditions under which an RJV is beneficial for society. Integrated innovation and competition policies are also discussed.     

The effect of bank account ownership on credit and consumption: Evidence from the UK

This article examines the causal effects of bank account ownership on credit access and consumption by isolating an exogenous change in account ownership produced by an electronic transfer mandate in the universal UK Child Benefit program. Comparing households with and without children finds that the mandate substantially affected banking behavior, with an 8.6% relative increase in transaction account ownership. When households transition into account ownership, results indicate large increases in credit card ownership (89%), and household durable goods (55%). Similar changes are not seen in loan use, weekly expenditures, or vehicle ownership. Additional evidence from a panel data set indicate declines in the use of fringe bank credit, informal loans, and debt after households transition into bank account ownership. In total, evidence suggests that an important effect of owning a bank account is improved access to credit cards which enables durable good consumption.     

Corporate Social Responsibility or Payoff Asymmetry? A Study of an Endogenous Timing Game

We revisit an endogenous timing game by introducing corporate social responsibility into firms' payoffs. Previous research investigates an endogenous timing game in a mixed oligopoly, wherein one welfare‐maximizing public firm competes against profit‐maximizing private firms. It shows that the outcome is completely different from that of private oligopoly. In contrast to its result, we find that this change in payoff does not matter as long as the payoffs are symmetric. Our result indicates that asymmetry, and not welfare‐concerning objectives, yields specific results in the literature on mixed oligopoly.     

Mixed duopoly,location choice,and shadow cost of public funds

We examine the relationship between equilibrium and efficient levels of product differentiation in a mixed duopoly, where a welfare‐maximizing public enterprise competes with a profit‐maximizing private firm. We introduce shadow costs of public funding (i.e., the excess burden of taxation). The profits of public firms obtained by the government reduce these costs. We find that in a mixed duopoly, the level of product differentiation is too low for social welfare. This result is in sharp contrast to the private oligopoly, where the level of product differentiation is too high. Finally, we show that when the shadow cost is high, privatizing the public enterprise improves welfare.     

R&D Subsidies,Spillovers, and Privatization in Mixed Markets

We examine the use of subsidies to research and development (R&D) in a mixed and a private duopoly market. We show that the socially optimal R&D subsidy is increasing in the degree of spillovers, but it is lower in the private duopoly. The optimal R&D subsidy leads to an increase in total R&D and production; however, it does not lead to the equalization of per firm output and therefore to an efficient distribution of production costs. We also find that privatization of the public firm reduces R&D activity and welfare in the duopoly market. This result stands even when optimal R&D subsidies are provided.     

The Effects of State Merit Aid Programs on Attendance at Elite Colleges

State merit aid programs have been found to reduce the likelihood that students attend college out of state. Using the U.S. News & World Report (USNWR) rankings of colleges and universities to measure college quality and Integrated Postsecondary Education Data System data to measure enrollment, we explore how this reduction in out‐of‐state enrollment differs by the academic quality of the institution. Our difference‐in‐differences results suggest that state merit aid programs do not induce students to forgo attending top 15 ranked schools. However, state merit aid does induce some students to forgo attending out‐of‐state schools ranked below the top 15 and shifts them toward lower quality in‐state schools, so that the net effect is a reduction in academic quality, as measured by USNWR. These effects may have long‐term implications for students' degree completion rates and labor market earnings.     

School district consolidation: Market concentration and the scale‐efficiency tradeoff

Consolidation is often proposed as a strategy for increasing school district quality without increasing educational funding. However, if consolidation reduces competition in the local school market and reduces efficiency, any savings from exploiting economies of scale may be lost to increased inefficiency. We use a stochastic cost function to investigate these effects for districts in Texas. We find important economies of scale, but we also find that increased market concentration leads to increased cost inefficiency. Finally, we illustrate the practical importance of these two potentially offsetting factors in a simulation that considers consolidating Texas school districts to county‐level districts. We find that failure to consider the effect on competition can lead to large overestimates of the benefits of consolidation.     

Welfare receipt and the intergenerational transmission of work‐welfare norms

This article investigates the role of welfare receipt in shaping norms regarding work and welfare using unique Australian data from the Youth in Focus Project. We begin by incorporating welfare into a theoretical model of the transmission of work‐welfare norms across generations. Consistent with the predictions of this model, we find evidence that youths' attitudes toward work and welfare may be influenced by socialization within their families. Young people are more likely to oppose generous social benefits and to believe that social inequality stems from individual characteristics if (i) their mothers support these views; (ii) their mothers were employed while they were growing up; and (iii) their families never received welfare. Finally, youths' work‐welfare norms appear to be unrelated to their neighbors' welfare receipt suggesting that socialization occurs primarily within families rather than within neighborhoods.     

Identification of Job Lock and Inefficient Labor Market Mobility

The common practice of linking employment with certain fringe benefits, notably health insurance, has long been thought to impede labor market mobility, thereby producing a phenomenon called job lock. A sizable literature has developed theoretical frameworks for how job lock impacts the labor market and empirically estimated the magnitudes of these effects. However, most empirical studies rely on identification strategies that do not separately identify productivity enhancing from productivity reducing labor market mobility. This article develops a simple theoretical framework showing how prior identification strategies confound both types of mobility and outlines conditions where productivity reducing mobility is of greatest concern.     

Rasch Analyses of Very Low Food Security among Households and Children in the Three City Study

The longitudinal Three City Study (TCS) of low‐income families with children measures food hardships using fewer and some different questions from the standard U.S. instrument, the Household Food Security Survey Module (HFSSM) in the Current Population Survey (CPS). We use a Rasch measurement model to identify thresholds of very low food security among households and among children in the TCS that are comparable to thresholds from the HFSSM. We also use the TCS to empirically investigate the determinants of food insecurity and of these specific food insecurity outcomes, estimating a multivariate behavioral Rasch model that is adapted to address longitudinal data. The estimation results indicate that participation in the Supplemental Nutrition Assistance Program and the Temporary Assistance for Needy Families program reduce food insecurity, while poverty and disability among caregivers increase it. Besides its longitudinal structure, the TCS measures many more characteristics about households than the CPS. Our estimates reveal that financial assistance through social networks and a household's own financial assets reduce food insecurity, while its outstanding loans increase insecurity.