An earnings-return model for strategic market planning / BEBR No. 869

Includes bibliographical references (p. 38-39).Few models currently exist which aid managers in their strategic market planning. The models or frameworks which do exist have a variety of shortcomings, a major one being an inadequate linkage to a business organization's dominant goals for existence -- earnings and return on investment. This paper develops a planning model based on a firm's present levels of earnings and return designed to provide a partial foundation on which its managers can base their strategic market planning. Depending upon the firm's placement in the model, different organizational objectives and strategies exist for improving future performance

Modern markets : competition in the 21st century

Defence date: 25 September 2023Examining board: Prof. Giacomo Calzolari (Eurooean University Institute, supervisor); Prof. David Levine (Eurooean University Institute, co-supervisor); Dr. Justus Haucap (Düsseldorf Institute for Competition Economics (DICE)); Dr. Pierre Regibeau (European Commission)This thesis is composed of three independent chapters, the third of which consists of two separate but thematically related papers. In Chapter 1, I introduce a theoretical model of vertical integration with a novel demand structure to investigate the effect of vertical integration into Internet infrastructure on competition in digital markets. I find that pure infrastructure providers have an incentive to accommodate vertically integrated firms by becoming “commoditized” suppliers of infrastructure. My model explains new trends in digital markets and has implications for competition policy, industrial policy and political economy. In Chapter 2, I estimate the effects of crisis intensity and deregulation on home bias in procurement. Using a novel data set on the award of procurement contracts for medical supplies during the first wave of the Covid-19 pandemic in Europe, I study the propensity to award contracts internationally. I document a unique shift towards international procurement, driven by local spikes in infection rates and deregulation. In Chapter 3, I study the role of pricing algorithms in online marketplaces. Its first part is a joint article with Giacomo Calzolari that describes the algorithmic repricing industry. Based on a novel sample of 130 repricing companies, we study the prices and claimed attributes of pricing algorithms. We find that turn-key algorithmic pricing services are widely available, and discuss product features, fees, and associated services. The second part of Chapter 3 is a literature review on algorithmic pricing. I summarize findings from the economics literature covering computational, experimental, and empirical methods as well as adjacent fields. I argue that a lack of understanding of buyer responses to algorithmic pricing cycles and endogenous adoption of algorithmic pricing are the main gaps in the literature.-- 1. Internet infrastructure and competition in digital markets -- 2. Does buyer discretion facilitate home bias in procurement? Cross-border procurement of medical supplies under Covid-19 -- 3. Pricing algorithms out of the box: a study of the repricing industry -- 4. Algorithmic pricing - a literature review -- A. Appendix to chapter 1 -- B. Appendix to chapter 2 -- C. Appendix to chapter

Concertation and Automation: Article 101(1) of the Treaty on the Functioning of the European Union and Automated Pricing Algorithms

The legal questions raised by the interplay between Automated Pricing Algorithms (APAs) and the prohibition on anticompetitive collusion within Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) present an opportunity to assess, critique, and clarify our understanding of EU competition law. The significant changes in business practice heralded by APAs require us to reassess the jurisprudence, to consider why the answers to the questions they raise are so unclear, and to provide some semblance of clarity to the legal lacunas which they throw into sharp relief. The competition law has always had to consist of rules which seek to articulate prohibited business practices in the context of undertakings consisting of human decision-makers. With the advent of increasingly sophisticated automated decision-makers, they must also be reconsidered and reconfigured such that they are capable of providing undertakings with legal standards governing the design, implementation, and monitoring of artificial agents. This thesis contributes to this process by undertaking a comprehensive analysis of the concepts of agreements and concerted practices within Article 101(1), how these concepts apply in the context of APAs and, where they raise unanswered questions, how they should apply in the future. This dissertation argues that the existing prohibition within Article 101(1) can be interpreted and adapted, with minimal legal engineering, to address many of the competition problems posed by APAs as they are currently understood within the both the legal and experimental literature, capturing related behaviours as forms of horizontal concertation. The major issues are divided into two main parts: questions concerning mediums through which information flows between undertakings, and questions regarding the mental states of undertakings releasing and receiving that information. By examining these two elements, the dissertation argues that greater flesh can be provided to the mooted problems observed in the literature relating to direct and indirect information exchanges and tacit collusion. In particular, the dissertation provides a legal framework from which to consider when information which passes between competitors should, and should not, be considered a feature of normal conditions on the market for the purposes of Article 101(1), and how the mental states of the undertakings involved are established in order to determine when such contacts constitute an agreement or concerted practice. While significant scope for additional research remains, in particular regarding the exact ways in which the technologies at issue may be leveraged, this research addresses several points of inevitable intersection between the existing law and automated decision-makers as they develop and proliferate, laying detailed groundwork for whatever comes next. It thereby strikes a balance between ‘legal sci-fi’ and sticking one’s head in the sand in the face of forthcoming change

The Salience Theory of Consumer Financial Regulation

Prior to the financial crisis, banks’ fee income was their fastest-growing source of revenue. This revenue was often generated through nefarious bank practices (e.g., ordering overdraft transactions for maximal fees). The crisis focused popular attention on the extent to which current regulatory tools failed consumers in these markets, and policymakers responded: A new Consumer Financial Protection Bureau was tasked with monitoring consumer finance products, and some of the earliest post-crisis financial reforms sought to lower consumer costs. This Article is the first to empirically evaluate the success of the consumer finance reform agenda by considering three recent price regulations: a decrease in merchant interchange costs, a cap on credit card penalty fees and interest-rate hikes, and a change to the policy default rule that limited banks’ overdraft revenue. The varied efficacies of these interventions suggest several insights for policymakers. First, price regulation of non-salient prices (such as late fees or overdraft charges) is desirable. This is true even in a perfectly competitive world, because the existence of shrouded prices can lead to excessive demand for consumer financial products; cause consumers to expend tremendous energy to avoid hidden fees; and result in cross-subsidy of sophisticated consumers, who incorporate these prices into their decision-making, by unsophisticated customers, who do not. In an imperfectly competitive world, regulations that target non-salient prices can also decrease overall consumer costs. A substitute for price regulation is the use of behavioral tools, such as shocks to consumer attention, to encourage consumers to take non-salient prices into account. Such simple, timely disclosure is a choice-preserving alternative to banning expensive consumer finance products

E-business industry developments - 2000/01; Audit risk alerts

https://egrove.olemiss.edu/aicpa_indev/1058/thumbnail.jp

Private Interests, Public Law, and Reconfigured Inequality in Modern Payment Card Networks

This Article examines two phenomena contributing to the racial stratification of consumers in credit card markets. The first phenomenon pertains to the longstanding conflict between card issuers and merchants over payment processing cost allocation. If successful, First Amendment challenges to existing statutory surcharge bans will allow merchants to impose an additional fee when consumers use credit cards as a form of payment. The Article relies on the interplay between socioeconomic class and behavioral theory to suggest subsistence borrowers would be more likely to pay surcharge fees than wealthier consumers. This arrangement disfavors the poor to support a hierarchy of borrowers, to the extent that income inequality continues to cleave along racial lines. The second phenomenon concerns algorithmic lending practices. Algorithmic lending practices use technology to effectively extend structural racism’s cumulative effects into the underwriting process. This Article argues that the algorithmic lending in modern credit card enrollment practices supports new and complex iterations of racial bias. Structural racism’s legacy married to modern data mining practices capture and compare the broad sweep of spending patterns among consumers with racially disparate spending power. Public law’s relationship to each of these two phenomena illustrates the government’s limited capacity to protect marginalized consumers from the racialized effects of cardholder stratification. The Article concludes by encouraging experts to refine underwriting practices to disentangle racism’s moral hazards from the legitimate business practice of equitable underwriting that determines a prospective borrower’s creditworthiness