Merge or Concentrate? Some Insights for Antitrust Policy

Why do some firm acquisitions give rise to a single brand name, and why, following others, all brands subsist? What are the welfare consequences of each option upon joining firms, rivals, and consumers from each of these groups? How do the choice of the strategigc variable (price or quantity) and the demand cross effects influence the results? This paper addresses these issues.

Financing in the Eurosystem: Fixed Versus Variable Rate Tenders

In a three-stage game in which banks can obtain liquidity through open market operations, interbank transactions or standing facilities we compare the equilibrium outcomes of fixed and variable rate tenders in the primary market. We focus on bidding behavior, induced allotment ratios, functioning of the secondary market and resorting to standing facilities, under several scenarios, among which collateral shortage and credit rationing. It is shown that overbidding is inherent to the fixed rate auction, but can be very mitigated under a variable rate procedure. Due to the existence of a finite number of equilibria, variable rate tenders allow keeping the informational content of quantity bids, as opposed to fixed rate tenders.

Stable Mergers and Cartels Involving Asymmetric Firms

The endogenous formation of coalitions involving asymmetric firms and their stability are analyzed as a function of differences in efficiency and of the fixed cost of production. Results are derived for cartels as well as for mergers. Players have constant but different marginal costs of production and no rule of product sharing is fixed. The analysis is illustrated for a specific path of collusion. Finally welfare effects are studied and some conclusions are drawn for antitrust policy.N/

Economies of Scope, Entry Deterrence and Welfare

This paper develops a model where the incumbent may expand to a related market to signal economies of scope and deter entry in the former market. We show that the incumbent only expands when scope economies are large enough. Thus expansion is a signal of larger economies of scope and, for certain parameter values, leads to entry deterrence. Although our game is twoperiod, the expansion strategy creates a long-term advantage. We further investigate the implications of prohibiting an entry-deterrent expansion. A major finding is that, in our model, this prohibition always decreases consumer surplus. In terms of global welfare, the impact is ambiguous but negative for many parameter values

Does it change during recessions?

Funding Information: Margarida Catalão‐Lopes and Inês Carrilho‐Nunes gratefully acknowledge financial support from Fundação para a Ciência e a Tecnologia (FCT) under the project 2022.08870.PTDC and through UIDB/00097/2020. Joaquim P. Pina gratefully acknowledges financial support from FCT under the project LA/P/0069/2020 granted to the Associate Laboratory ARNET, and the strategic project UIDB/04292/2020 granted to MARE—Marine and Environmental Sciences Centre. Publisher Copyright: © 2023 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd.This paper assesses how environmental, social, and governance (ESG) news influence Portuguese stock market volatility depending on the business cycle. Given the lack of an adequate index to capture the effects of ESG media on the Portuguese stock market, a News Sentiment Index is developed. This index, which captures positive and negative ESG news on companies listed in the Portuguese Stock Index (PSI-20), is then used as an external regressor in symmetric and asymmetric GARCH-type models employed to model the stock market volatility. Results show that during non-crisis periods ESG news reduce returns' volatility, and that when considering the period preceding the financial crisis the disclosure content (positive or negative) of the news matter. However, during economic downturns, neither the amount nor the content disclosure of ESG news affect volatility; thus, ESG preoccupations might no longer be paramount.publishersversionepub_ahead_of_prin

Disentangling Housing Supply to Shift towards Smart Cities: Analysing Theoretical and Empirical Studies

The search for a pleasant home has concerned people ever since. Paradoxically, people are facing strong difficulties in finding a decent place to settle their lives in cities. As such, the housing market regained momentum in connection with the development of Smart Cities, where life quality of residents is strongly emphasized. Well-being in the metropolis is affected by a wide variety of factors with housing supply being among the most important, hence stirred by financing costs, construction costs, vacancy rate, sales delay, inflation rate, housing stock, price of agricultural land, and regulation. The present article reviews empirical studies on housing supply for a better understanding of the dynamics in this market, shedding some light on the expectable outcomes of policy actions in the promotion of sustainable housing towards the smart city transition. Our review shows that the long-run price elasticity of housing supply is larger than the short-run, as well as the existence of substantial differences in the price elasticity across countries and regions. As such, overall, the hypothesis of a perfectly elastic supply is rejected. In addition, our review highlights that housing supply is negatively related to financial costs, inflation, sales delay, and the existence of regulatory or physical constraints. Also, the elasticity is lower when there are regulatory constraints. Newfangled strategic interaction models, though overlooked in the literature, reinforce that housingdoes not fit the perfect competition frame. The review proves that we are in face of a non-competitive market in which policy intervention is required to maximize social welfare; policy packages to grant people access to the housing market may be required. However, policy interventions should be carefully designed and clear, to mitigate their potentially negative impact on the housing supply as adverse results may be harmful to the transition towards a smart city

Pretending to be Socially Responsible? The Role of Consumers’ Rewarding Behaviour

Extant evidence on corporate social responsibility (CSR) shows that consumers are willing to pay a premium if they infer that the firm is truly "prosocial" (i.e if it is altruistic), but their valuation of the product will not increase as much (and may even decrease) if they believe the company has an ulterior motive for CSR (i.e. if the firm is opportunistic). We pose that the CSR level of investment can be strategically used as a signalling tool to help consumers identify the true nature of the firm and solve this incomplete information problem. Using a signalling game, where altruistic firms want to express their nature and opportunistic ones want to conceal it, we explore the relative effectiveness of consumers’ premiums and penalties (expressed as demand increases or decreases, respectively) in the promotion of corporate truth-revealing behaviour. We also characterize the conditions for market equilibria in which altruistic firms are distinguished from opportunistic ones, allowing consumers to solve the information asymmetry and, with that, influence firms’ profits. Contrary to what might be expected, we show that rewards for altruistic CSR and penalties for opportunistic CSR are not symmetrically effective. Our results help companies to improve their CSR decisions, by understanding how consumers solve the information asymmetry regarding the true nature of the CSR investments. Especially for altruistic firms, this may be important to guarantee that CSR effort and expenses are not just a cost but turn into higher revenues and profits

Quality signaling through advertising and brand extension in multiproduct firms

We consider the use of advertising expenses as a signal of product quality in a model where quality is exogenously given and a priori unobservable by consumers. Our focus is on multiproduct firms, who may benefit from spillover effects from quality signaling. Quality is known to be positively correlated across the various products that the firm sells. Signaling the quality of a product may help in solving the information problems in markets where the firm does not separate. As a result of this informational leverage effect advertising levels per market are at least as high in multiproduct firms as in single product firms, and net profits may be high, too. We also derive some conclusions on the optimal timing for a multiproduct firm (and for the society, as well) for signaling quality. Extending a brand may be used as a signal of quality correlation between two distinct products of the same firm; we find equilibria in which a firm with a good reputation for quality uses the same name for all products if and only if it knows of a high quality correlation between them (products within the same class), and in which this firm uses different names if and only if quality correlation is low (products of different classes) .info:eu-repo/semantics/publishedVersio

Poder de mercado: com uma aplicação ao mercado de crédito português

A presente dissertação em economia industrial tem como tema central a avaliação do poder de mercado no sector bancário português, concretamente nas operações activas, De tal se ocupa o capítulo quarto da mesma. Os segundo e terceiro capítulos contituem matrial introductório procedendo-se no capítulo dois a uma revisão da literatura mais representativa sobre poder de mercado e no capítulo três a uma caracterização breve do sector bancário em Portugal nas úçtimas décadas, com especial incidência sobre os anos mais recentes. O capítulo quinto conclui...

Barreiras Dinâmicas e a Estratégia de Preço Limite: Uma Revisão da Literatura com Controlo Óptimo

N/