The Effects of Taxes and Advertising Restrictions on the Market Structure of the U.S. Cigarette Market

A dynamic oligopoly model of the cigarette industry is developed to study the effects of anti-smoking policies on the market structure of the U.S. cigarette industry. Firms are modeled as competing in price and advertising in a dynamic game. Two commonly used anti-smoking policies – advertising restrictions and tobacco tax increases – are evaluated using calibrated parameters. The simulation results show that in the long run both advertising restrictions and tax increases can successfully reduce the smoking rate. However, advertising restrictions reduce the smoking rate mainly in an indirect way through their impact on the concentration of the market, while tax increases reduce the smoking rate directly and have little effect on the concentration of the market. In addition, in the short run, advertising restrictions have a much smaller effect on reducing the smoking rate than tax increases.     

The Effect of Government Advertising Policies on the Market Power of Cigarette Firms

We estimate market power among cigarette manufacturers over 1952–1984, a period of uniform pricing. We apply the Bresnahan approach; adjust it to the firm level; employ a dynamic model with habit persistence; and add an advertising equation, which helps identify the parameters, increase degrees of freedom, and constrain parameters so we can interpret our results at the firm level, despite the fact that the equations conform to what we might see in a market model. We consider effects of government interventions upon demand and market power and find, for instance, that the 1971 broadcast advertising ban decreased market power.     

The Effect of Advertising on Pharmaceutical Innovation

Although there is much controversy in the economic literature about how advertising affects market competition, little is known about the effect of advertising on product innovation. We examined the relationship between advertising expenditures and the research and development activities of pharmaceutical firms using empirical data from eight therapy areas. This study finds that detailing advertising may have a significant positive effect on the number of new products entering into clinical development. Markets of chronic disease with high levels of detailing advertising were more attractive to pharmaceutical firms. However, the effect of advertising on new product novelty remains inconclusive.     

The U.S. Motion Pictures Industry: An Empirical Approach

We hypothesize that the U.S. motion pictures industry is structured so that star presence increases box office receipts and (less so) admissions, but places Ricardian limits on the output of blockbusters. The few dominant studios (majors) rely on a modified star system to generate supra-normal box office by stimulating admissions at exhibitors. Rising costs (from stars and their promotion) are required for rising revenues; that is, the majors gain revenue only at higher costs. Although the industry has unique features, the empirical results are surprisingly relevant to other industries.     

The value of knowledge spillovers in the U.S. semiconductor industry

This paper aims at quantifying the economic value of knowledge spillovers by exploring information contained in patent citations. We estimate a market valuation equation of the U.S. semiconductor firms during the 1980s and 1990s, and find an average value of $0.6 to 1.2 million “R&D-equivalent” dollars for knowledge spillovers embodied in one patent citation. For an average semiconductor firm, such an estimate implies that the total value of knowledge spillovers the firm received during the sample period can be as high as half of its actual total R&D expenditures in the same period. This provides a direct measure of the economic value of social returns or externalities of relevant technological innovations. We also find that the value of knowledge spillovers declines as the size of firm's patent portfolio increases, and that self citations are more valuable than external citations, indicating a significant amount of tacit knowledge or know-how spillovers that occur within the firm.     

国内烟草产业的供应链竞争战略

烟草作为特殊商品，在特殊的管理体制下，其供应链呈现与一般产品不同的特殊性。由于各个利益团体的冲突，导致供应链的断裂，从本质上削弱了供应链的竞争力。本文从烟草供应链的特征和结构分析出发，构建了烟草供应链的竞争力结构，提出在现有体制模式下，以核心企业为中心对烟草供应链进行集成，实施供应链竞争战略可以在一定程度上弥补断裂的供应链。     

美国纺织工业的兼并浪潮

1998年是美国纺织工业企业兼并重组活动创纪录的一年,并且兼并的步伐似乎不会停止。面对强大的竞争压力,越来越多的公司选择合并或购并其它公司以努力改善其命运。本文透过1998年企业兼并活动,探讨推动     

碳税的社会福利效应分析

碳税是减少碳排放的一种重要手段。碳税开征与否的一个主要争论在于：征收碳税是否会加大收入差距。在制定碳税政策时,需要考虑碳税实施后对收入分配产生负面影响的可能性,权衡公平目标与二氧化碳减排效果,在体现社会公平的前提下实现节能减排的目的。     

美国开放式基金产业发展现状及其对我国的启示

通过分析美国基金产业现状发现,美国开放式基金产业是美国普通居民首要的投资渠道。作为金融市场最重要的投资者,开放式基金对塑造现代美国金融结构和竞争环境发挥了重要作用。美国的基金产业发展得益于良好的法律法规和监管机制等基础制度建设,以及较低的准入门槛和金融市场的有序竞争。     

An Analysis of the Out-of-Market Gap for DVDs in the U.S.

We examine the out-of-market gap – the time between the end of a film’s theatrical run and its release on DVD – for a sample of U.S. films during 1988-2005. The average gap declined from 58.14 days in 1998 to 27.93 days in 2005; by 2005, 39% of the films were released on DVD prior to leaving the theaters. Probit and hazard models are estimated to explore the factors that influence a distributor’s decision to release a film on DVD before it exits the theaters, and the timing of the release for films that appear on DVD after they leave the theaters.      

Competition and Service Quality in the U.S. Airline Industry

The U.S. government, media, and flying public have expressedgreat concern in recent years over both airline market concentration and flightdelays. This study explores potential connections between the two by examining whetherthe lack of competition on a particular route results in worse on-time performance.Analysis of data from the U.S. Bureau of Transportation Statistics in 2000 indicatesthat both the prevalence and duration of flight delays are significantly greater onroutes where only one airline provides direct service. Additional competition iscorrelated with better on-time performance. Weather, congestion, and schedulingdecisions also contribute significantly to explaining flight delays.     

The Gradual Response of Market Power to Mergers in the U.S. Steel Industry

Studies of the impact of horizontal mergers on market power typically impose an immediate adjustment of market power following a merger. This paper adopts an alternative procedure to estimate the effect of four mergers on market power in the U.S. steel industry. Namely, by estimating a switching regression model that incorporates profit-maximizing behavior, the results show that mergers generally increased market power in the steel industry. However, it did take some time for market power to fully adjust after each merger.     

The Dynamics of Industry Concentration for U.S. Micro and Macro Brewers

In this update we document the changes in industry concentration of macro and micro brewers in the U.S. brewing industry since 1970. Technological change and the continued success of Anheuser–Busch forced the macro brewers into a war-of-attrition game and contributed to rising concentration in the macro sector of the industry. Homogenization of the beer produced by macro brewers, changes in local demand conditions, and a more favorable regulatory environment created profitable niches in many local markets for micro brewery beer, and entry into this sector occurred at a phenomenal rate from 1977 to 1998. Consistent with several models of industry dynamics, over-exuberance led to a shakeout as the number of micro breweries fell by over 16% from 1998 to 2002.     

Determinants of UK Box Office Success: The Impact of Quality Signals

This paper analyses the roles of various quality signals in the demand for cinema attendance in the United Kingdom. Estimation of a three-stage least squares model with data for 527 films released in the United Kingdom shows that the impacts of advertising and critical reviews on box office revenues vary both in channels and magnitudes of impact. Our model treats total advertising as endogenous, alongside the number of opening screens and total box office revenues, while critical reviews are considered exogenous. Our results show that total advertising affects total box office revenue while responding endogenously to critical reviews.     

Performance implications of delayed competitive responses: evidence from the U.S. retail industry

The timing of competitive actions and responses is a key management concern that has important performance consequences. This study focuses on the timing and consequences of competitive responses. Theory predicts a negative linear relationship between response delay and responder performance mirrored by an opposing positive linear relationship between response delay and first mover performance. In contrast, our study suggests that response delay has a curvilinear relationship with responder performance, and a linear relationship with first mover performance. We test our propositions using retail industry data and discuss the implications. Copyright © 2008 John Wiley & Sons, Ltd.     

The Effect of Industry Concentration on Free Riding

The conventional wisdom regarding industry concentration and cooperative behavior has not been fully supported by the empirical literature. This paper develops a game-theoretic model to explain these mixed results. In the context of an industry that lobbies the government for tariff protection, the model shows that the difficulty of enforcing a cooperative agreement is a function of not only the number of firms in the industry but also the rate of return to lobbying. Thus, when the rate of return to lobbying expenditures is high, the expected relationship may break down.