RECENT DEVELOPMENTS IN THE THEORY OF NATURAL MONOPOLY

Abstract. This paper examines two important recent developments in the theory of natural monopoly, or more generally the theory of market structure. The first is a series of papers, involving Baumol with various co-authors, investigating the theory of industry structure, whilst the second is particularly associated with the names of Shaked and Sutton, and the relationship they develop between product differentiation and industry structure. The paper surveys and to some extent contrasts these two new approaches.
Baumol et al. 's contribution is seen to be in the area of clarifying the concept of natural monopoly, refining the definitions of multiproduct costs, and developing a notion of social efficiency applicable to industries where economies of scale are important. Shaked and Sutton employ a new definition of natural monopoly unrelated to market size and utilize information about consumers'income distributions to develop their notion of vertical product differentiation and natural oligopoly.     

Advertising Expenditure in the UK: 1982 Survey

This paper sets out the method of compilation of the UK official advertising statistics.     

Advertising Expenditure in the UK: 1981 Survey

This paper sets out the method of compilation of the UK official advertising statistics.     

Shut the fridge door! HRM alignment,job redesign and energy performance

Anchored within the strategic HRM and alignment literature, and drawing on efficiency and legitimacy perspectives of organisational behaviour, we investigated a HRM intervention targeted at energy reduction goals in a large multinational retailer. The HRM intervention was focused on embedding the environmental and economic performance goals of the firm within the workplace through redesigning the job so that energy tasks were aligned with training and performance management systems, as well as organisational performance goals. Using a randomised control trial design, we tracked changes in energy behaviours and energy consumption in 769 retail stores (685 in the intervention condition, 84 in the control condition). The findings provide evidence that changing the alignment of HRM practices can influence both worker behaviour and organisational outcomes, including environmental outcomes. This work contributes to debates concerning the impact of HRM alignment on both the work and organisational performance context.     

Retailer power: recent developments and policy implications

It is common, but incorrect, to view retailing as a highly competitive activity. Unlike manufacturing, retailing has displayed a trend towards much higher concentration, reinforced by actions of retailers themselves, such as emphasis on own-label brands. This may introduce distortions arising from exercise of market power or may create countervailing power to that already enjoyed by manufacturers. Acknowledging increased market power within retailing raises new issues for competition authorities. We develop a consistent framework of analysis and use it to examine two issues: attitudes to retail mergers and exclusivity arrangements between retailers and their suppliers.     

Identifying and characterising price leadership in British supermarkets

Price leadership is a concept that lacks precision. We propose a deliberately narrow, falsifiable, definition then develop it, illustrate its feasibility and test it using the two leading British supermarket chains. We find both firms engaging in leading prices upward over a range of products, with the larger being initially more dominant but the smaller increasing leadership activity to take overall leadership over time. However, more price leadership events are price reductions than price increases, consistently led by the smaller firm. Nevertheless, the increases are of larger monetary amounts than the falls, so average basket price increases over time.     

Your Call: eBay and Demand for the iPhone 4☆

The iPhone 4 was introduced into the UK market on 24^th June 2010 to significant consumer interest. Demand revealed itself exceeding supply through conventional channels, since there was very extensive activity in terms of bidding on eBay auctions for the product. We monitored all UK eBay transactions on the iPhone 4 for six weeks from introduction, with total transactions amounting to around £1.5m. We analyse determinants of winning bids in terms of characteristics of the phone, the seller, and the buyer. Our most notable and novel finding relative to previous studies is a very significant premium over list price being paid in almost all cases, with positive uplift factors including whether the phone was unlocked and whether it could be sold overseas. Demand fell over time, as evidenced by lower achieved prices, but the fall in price was relatively modest. A significant premium of 32GB over 16GB versions is revealed.