Consolidation and Price Discrimination in the Cable Television Industry

This paper measures the impact of consolidation on cable television prices, product quality,profits and consumer welfare. I estimate a multi-product monopoly model using panel data on cable menus and costs in Canada from 1990 to 1996. Using counterfactual simulations, I find mean consumer welfare rises with acquisitions, as does welfare inequality across consumers. Scale economies are the primary driver of consolidation effects quantitatively, with firm heterogeneity in demand and costs having a smaller impact. Regional consolidation yields non-negligible welfare gains, particularly in rural markets where potential cable quality improvements and cost reductions are the largest.Consolidation; Price Discrimination; Economies of Scale; Firm Heterogeneity;

Price Cycles and Price Leadership in Gasoline Markets: New Evidence from Canada

This paper studies the determinants of Edgeworth Cycles, price leadership and coordination in retail gasoline markets using daily station-level price data for 110 markets in Ontario, Canada for 2007-2008. We find an “inverse-U” relationship between markets’ propensity to exhibit price cycles and their size. More concentrated markets are less likely to exhibits cycles and we highlight regional clustering among cycling and non-cycling markets. Within cycling markets, we find brands’ stations (Esso, Shell,Petro-Canada, Sunoco) lead price jumps and coordinate market prices, while independents (Ultramar, Pioneer, Olco, MacEwen) aggressively undercut prices over the cycle.Retail gasoline prices; Edgeworth Cycles; Price leadership; Coordination