Tag: Bureau of Economics

Displaying 161 - 180 of 330 results.

Can price and advertising be used by vertically differentiated duopolists to signal qualities to consumers? We show that pure price separation is impossible if the vertical differentiation is small, while adding dissipative advertising ensures existence of separating equilibria. Two...
With perfect information about relevant strategic variables, economic theory predicts that firms engaged in competition across several markets sometimes can use their multimarket contact to blunt competitive forces. In practice, perfect information likely is not available, and it is...
Our paper examines the behavior of prices in a large number of highly-disaggregated industries around the trough of the business cycle. We conclude that the degree to which prices are pro- or counter- cyclical differs between business cycle peaks and business cycle troughs, and that...
The attached memorandum presents the results of a large scale advertising copy test project that was conducted jointly by the Division of Advertising Practices and the Bureau of Economics of the Federal Trade Commission. This research explored several issues related to the Commission...
The 1992 Horizontal Merger Guidelines suggest that the merger of two relatively weak competitors may result in a strong competitor and may lead to lower prices, despite the resulting increase in concentration. This paper introduces incomplete information into a simple model of...
This paper develops and tests implications of an oligopoly pricing model. The model involves capacity investments that are made before demand is revealed and pricing decisions that are made after demand is known. The model predicts that during a demand expansion the short run...
The creation of physician networks has been an important part of the managed care revolution. while the anticompetitive dangers of physician-controlled networks are clear, there has been little theoretical or empirical work on why physician control might be efficient relative to...
We examine the abnormal returns of rival firms to determine whether four retailing mergers that occurred during the late 1980s reduced competition. We use the stock returns of retailers in geographic markets unaffected by the merger to control for the efficiency-signaling effect of...
A merger that permits the combined company to reduce the marginal cost of producing a product creates an incentive for it to lower price. Accordingly, the rate at which cost changes are passed through to prices matters to the evaluation of the likely competitive effects of an...
The report analyzes the potential impact of the proposed tobacco industry settlement on cigarette prices, industry profits, and government revenues. The main conclusions of the report are that (1) the antitrust exemption may reduce competition in the industry and allow the industry...
Concern over regulated monopolies entering unregulated vertically-related markets is grounded in the incentives for such firms to cross-subsidize their unregulated enterprises or discriminate against competitors in the unregulated market. However, a prohibition against regulated...
There is an ongoing public policy debate regarding vertical integration and its concomitant information flows. Of particular concern is that the information derived by an auctioneer (such as a distributor) will be shared with its integrated bidder (such as a manufacturer), leading to...
Several theories of nonprofit hospital behavior predict that nonprofit hospitals behave in the consumer interest and thus do not exercise market power. If these theories are correct, then antitrust enforcement of hospital mergers should be restricted only to those markets in which a...
The study examines changes in the consumption of fat, saturated fat, and cholesterol from 1977 to 1990, a period when federal policy governing diet-disease claims changed. The study finds that dietary improvements occurred more rapidly in the post-1985 years, when the rules were...
This paper provides a theory that explains why government allow free entry and selectively promote entry under certain conditions and deter entry under other conditions. The analysis also identifies conditions under which optimal policy requires that large-scale entry is freely...
Since Milgrom and Roberts (1986) game theorists studying advertising have generally assumed that aggregate advertising expenditures are perfectly observed by consumers. In the real world, however, consumers see only a small fraction of the commercials aired by a given firm and...
This study analyzes whether ocean shipping rates are affected by the presence and practices of ocean liner conferences. The study provides some support for the conclusion that some aspects of the conference system may contribute to higher shipping rates, particularly when the...
This study estimates the relationship between intrastate trucking rates and three different types of state-level regulations: 1) the strictness with which rates are regulated; 2) the requirements placed on motor carriers seeking to enter the market; and 3) whether the state provides...
Firms seeking to merge face antitrust scrutiny from either the Department of Justice (DOJ) or the Federal Trade Commission (FTC). Unlike the DOJ, the FTC litigates its cases in front of its own administrative law judges (ALJ), and then hears the appeal itself, rather than using the...
This study describes the pricing and distribution of salt during the National Industrial Recovery Act period and beyond (1930-1945). Two FTC cases brought to enforce the Robinson-Patman anti- discrimination law during this period are examined in some detail. Also included is a...

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