Political Competition in Economic Perspective

It is sometimes argued that political competition yields benefits to the citizens just as competition in economic markets yields benefits to consumers. We consider the economic costs and benefits of political competition and find that the story is somewhat more complicated. We first review the limited existing literature on this topic, and in the process, identify a number of distinct interpretations of what constitutes political competition. We then turn our attention to two forms of political competition based on what we refer to as accountability for incumbents and electoral politics. We find that, while political competition can yield allocative benefits for the public, it can also generate aggregate welfare costs by constricting the set of politically feasible public investments.

Competing for Consumer Inattention

Consumers purchase multiple types of goods and services, but may be able to examine only a limited number of markets for the best price. We propose a simple model which captures these features, conveying some new insights. A firm’s price can deflect or draw attention to its market, and consequently, limited attention introduces a new dimension of competition across markets. We fully characterize the resulting equilibrium, and show that the presence of partially attentive consumers improves consumer welfare as a whole. When consumers are less attentive, they are more likely to miss the best offer in each market; but the enhanced cross-market competition decreases average price paid, as leading firms try to stay under the consumers’ radar

Maximizing Welfare in Social Networks under a Utility Driven Influence Diffusion Model

Motivated by applications such as viral marketing, the problem of influence maximization (IM) has been extensively studied in the literature. The goal is to select a small number of users to adopt an item such that it results in a large cascade of adoptions by others. Existing works have three key limitations. (1) They do not account for economic considerations of a user in buying/adopting items. (2) Most studies on multiple items focus on competition, with complementary items receiving limited attention. (3) For the network owner, maximizing social welfare is important to ensure customer loyalty, which is not addressed in prior work in the IM literature. In this paper, we address all three limitations and propose a novel model called UIC that combines utility-driven item adoption with influence propagation over networks. Focusing on the mutually complementary setting, we formulate the problem of social welfare maximization in this novel setting. We show that while the objective function is neither submodular nor supermodular, surprisingly a simple greedy allocation algorithm achieves a factor of $(1-1/e-\epsilon)$ of the optimum expected social welfare. We develop \textsf{bundleGRD}, a scalable version of this approximation algorithm, and demonstrate, with comprehensive experiments on real and synthetic datasets, that it significantly outperforms all baselines.Comment: 33 page

THE RECESSION, BUDGETS, COMPETITION, AND REGULATION: SHOULD THE STATE SUPPLY BESPOKE PROTECTION? RESEARCH SERIES NUMBER 12 OCTOBER 2009

Recessions are harsh. Demand declines. Firms shed labour, reduce output or file for bankruptcy. Pressure mounts to reduce prices and increase productivity. Returns decline; margins are squeezed; dividends are suspended. Unemployment increases. Firms seek to delay payments to suppliers, while simultaneously demanding suppliers reduce input prices and extend credit. Carefully assembled workforce teams are broken up. New products and innovations are put on hold. Competition is characterised as cut-throat, destructive and excessive. Faith in markets begins to be questioned

Impact of the introduction of machine gaming in Queensland on minor and major bingo

Material for this paper comes from as report commissioned by the Department of Family Services, Aboriginal and Islander Affairs. The report is the result of a multi strategy research project designed to assess the impact of gaming machines on the fundraising capacity of charitable and community organisations in Queensland. The study was conducted during the 1993 calendar year. The first Queensland gaming machine was commissioned on the 11 February, 1992 at 11.30 am in Brisbane at the Kedron Wavell Services Club. Eighteen more clubs followed that week. Six months later there were gaming machines in 335 clubs, and 250 hotels and taverns, representing a state wide total of 7,974 machines in operation. The 10,000 gaming machine was commissioned on the 18 March, 1993 and the 1,000 operational gaming machine site was opened on 18th February, 1994

Is Google the next Microsoft? Competition, Welfare and Regulation in Internet Search

Internet search (or perhaps more accurately `web-search') has grown exponentially over the last decade at an even more rapid rate than the Internet itself. Starting from nothing in the 1990s, today search is a multi-billion dollar business. Search engine providers such as Google and Yahoo! have become household names, and the use of a search engine, like use of the Web, is now a part of everyday life. The rapid growth of online search and its growing centrality to the ecology of the Internet raise a variety of questions for economists to answer. Why is the search engine market so concentrated and will it evolve towards monopoly? What are the implications of this concentration for different `participants' (consumers, search engines, advertisers)? Does the fact that search engines act as `information gatekeepers', determining, in effect, what can be found on the web, mean that search deserves particularly close attention from policy-makers? This paper supplies empirical and theoretical material with which to examine many of these questions. In particular, we (a) show that the already large levels of concentration are likely to continue (b) identify the consequences, negative and positive, of this outcome (c) discuss the possible regulatory interventions that policy-makers could utilize to address these

Changing the Numbers: UK Directory Enquiries Deregulation and the Failure of Choice

Abstract. In 2003, the UK ‘liberalised ’ its telephone directory enquiries service with the aim of introducing competition so as to improve quality and lower costs. Unfortu-nately the results did not match expectations. Proliferation of numbers led to consumer confusion and high price firms with no discernible quality advantages but which employed heavy advertising came to dominate the market. Consumer and total welfare appear to have declined. This example raises important questions for regulators. In particular, with limits on information and rationality, it may sometimes be better to limit choice but increase competition to supply that choice

\u3ci\u3eAmerican Express\u3c/i\u3e, the Rule of Reason, and the Goals of Antitrust

I. Introduction II. The Debate over the Consumer Welfare Standard III. Applying the Rule of Reason ... A. The General Framework ... B. Step One ... C. Muddying the Waters ... D. The Bottom Line: An Analytical Mess IV. The Rule of Reason and Multi-Sided Platforms V. Missing in Action: The Consumer Welfare Standard VI. Conclusio

The political economy of Baltic States’ accession into the EU: The impact on the role of the state. Jean Monnet/Robert Schuman Paper Series Vol. 5 No. 21, July 2005

[From the introduction]. This paper aims at providing a broad analysis of the EU’s impact on the CEECs which is not sector or policy specific by focusing on the changing role of the state in these countries as a result of direct and indirect impact of the EU. It draws on the concepts developed by the Europeanization studies, debates on the regulation in EU and in particular studies of transition reforms. The studies of the two processes of transition and EU accession, in particular the character and outcomes of their interaction, have for a long time been fragmented and divided into two separate fields. Some analysts go as far as to claim that, “the two not only pass each other as ships in the night, but rarely even sail in the same sea.” (6) This paper starts with the premise that integrating the results of studies from the transition reforms and EU accession policies can provide new insights about the changing role of the state, boundaries between private and public, and potential implications for the success of public policies in the CEECs and growth of their economies. In addition, the paper also critically examines the prevailing arguments concerning the character of EU’s impact on CEECs and provides a different perspective on the issue. Although the literature on the impact of the EU on the redrawing of boundaries between market and the state so far has been rather limited, there have been several arguments which are made explicitly by the authors or are tacitly accepted as the conventional wisdom in policy specific analysis