Liberalizing a distribution system: The European car market.

We quantify the competitive effects of removing vertical restraints, based on the recent proposals to liberalize the selective and exclusive distribution system in the European car market. We estimate a differentiated products demand system for new cars and specify a model of oligopoly pricing under the current distribution regime. We then perform several policy experiments: the creation of international intrabrand competition (cross-border trade) and a possible strenghtening of national intrabrand competition. Our approach may also be useful to assess the competitive effects of vertical restraints in other applications.Distribution; Market; Effects; Proposals; Oligopoly; Applications;

Policy reform in a market with differentiated products: applications to the car market.

The central issue in this dissertation is to understand the effects of policies in the European car market and to improve them. We take a closer look at three different aspects of policy decisions.In the first essay we propose an econometric method to define the relevant markets that is easier in use and interpretation than the currently used methods. With this method we find for most cars a relevant market that is smaller than with the standard industry classifications, except for the Italian domestic cars and the minivans. Based on these results weare able to identify the firms that violate the market share thresholdsstipulated in the block exemption regulation.In the second essay we focus on competition improving policies for the car market put forward by the European Commission. We quantify the effects of a policy that removes the vertical restraints in order to improve the degree of competition in the market. We find that a policy that reduces the international price differentials has on average only a modest positive effect on the welfare but rearranges its distribution across countries. The effects of a policy that reduces the double marginalization are higher.The third paper tackles some of the environmental issues in the car market. The effects of imposing a restriction on polluting emissions of newcars is evaluated and compared with the efficiency of other possible policies. We find that the policy chosen by the European Commission outperforms several other policies in terms of welfare costs.p001 1. Introduction p002 1.1. Structural models p011 1.2. The relevant market and its use in competition policy p016 1.3. Overview of the three essays p019 2. Market definition with differentiated products - lessons from the car market p020 2.1. Introduction p022 2.2. Vertical restraints, safe harbours and market share thresholds p024 2.3. Methodology for market definition p034 2.4. Results on market definition p042 2.5. Policy implications p045 2.6. Conclusions p046 2.7. Tables p053 3. Liberalizing a distribution system: the European car market p054 3.1. Introduction p058 3.2. The distribution system and reform proposals p059 3.3. The model p072 3.4. Data and estimation p081 3.5. The effects of liberalization p087 3.6. Conclusions and extenstions p088 3.7. Appendix p095 3.8. Tables p101 4. Introducing an emission reducing policy in the European car market p102 4.1. Introduction p103 4.2. The model p118 4.3. Data and estimation p122 4.4. Effects of environmental policies p129 4.5. Conclusions and future research p138 4.6. Tables and figures p147 5. Doctoral dissertations from the faculty of economics and applied economicsstatus: publishe

Market definition with differentiated products: lessons from the car market

status: publishe

Liberalizing a distribution system: The European car market

We quantify the competitive effects of removing vertical restraints, based on the recent proposals to liberalize the selective and exclusive distribution system in the European car market. We estimate a differentiated products demand system for new cars and specify a model of oligopoly pricing under the current distribution regime. We then perform several policy experiments: the creation of international intrabrand competition (cross-border trade) and a possible strenghtening of national intrabrand competition. Our approach may also be useful to assess the competitive effects of vertical restraints in other applications.status: publishe

Liberalizing a Distribution System: the European Car Market

We quantify the competitive effects of removing vertical restraints, based on the recent proposals to liberalize the selective and exclusive distribution system in the European car market. We estimate a differentiated products demand system for new cars and specify a model of oligopoly pricing under the current distribution regime. We then perform several policy experiments: the creation of international intrabrand competition (cross-border trade) and a possible strengthening of national intrabrand competition. Our approach may also be useful to assess the competitive effects of vertical restraints in other applications.car market; competition policy; selective and exclusive distribution; vertical restraints

Market Definition with Differentiated Products - Lessons from the Car Market

For a variety of reasons, it is likely that the market definition approach will remain an important tool in competition policy analysis for some time, despite the increased importance of other tools such as the simulation approach. Against the background of the new block exemption regulation for cars in Europe, we explore an econometric approach to define the relevant markets with differentiated products. On the one hand, the approach is directly consistent with the SSNIP-test, and it is in fact more satisfactory than previous approaches, such as critical elasticity analysis or the simple use of standard industry classifications. On the other hand, the approach shares a lot of features with the simulation approach (similar data requirements, and similar assumptions about current market power). We find that the relevant market for minivan cars is defined at the widest level, i.e. at the aggregate country level. Furthermore, in Italy the relevant markets for domestic cars are defined at an intermediate level, i.e. at the segment level. In all other cases, the relevant markets for cars may be defined at the narrowest level, i.e. at the subsegment level. Based on these results, we identify the firms that may violate the market share thresholds stipulated in the block exemption regulation. We find that, if we would have used an approach based on standard industry classifications instead of our econometric approach, our conclusions would have been different and, in fact, inconclusive. We also draw attention to other issues in market definition that may be of use to practitioners.competition policy; market definition

Liberalizing a distribution system The European car market

Includes bibliographical references. Title from cover. Also available via the InternetAvailable from British Library Document Supply Centre- DSC:3597. 9512(no 3622) / BLDSC - British Library Document Supply CentreSIGLEGBUnited Kingdo