Complementary platforms.

We introduce an analytical framework close to the canonical model of platform competition investigated by Rochet and Tirole (2006) to study pricing decisions in two-sided markets when two or more platforms are needed simultaneously for the successful completion of a transaction. The model developed is a natural extension of the Cournot-Ellet theory of complementary monopoly featuring clear cut asymmetric single- and multihoming patterns across the market. The results indicate that the so-called anticommons problem generalizes to two-sided markets because individual platforms do not take into account the negative pricing externality they exert on the other platforms. As a result, mergers between such platforms may be welfare enhancing, but involve redistribution of surplus from one side of the market to the other. Moreover, the limit of an atomistic allocation of property rights however is not monopoly pricing, indicating that there also exist differences with the received theory of complementarity.Competition; Industries; Industry;

Complementary platforms

We introduce an analytical framework close to the canonical model of platform competition investigated by Rochet and Tirole (2006) to study pricing decisions in two-sided markets when two or more platforms are needed simultaneously for the successful completion of a transaction. The model developed is a natural extension of the Cournot-Ellet theory of complementary monopoly featuring clear cut asymmetric single- and multihoming patterns across the market. The results indicate that the so-called anticommons problem generalizes to two-sided markets because individual platforms do not take into account the negative pricing externality they exert on the other platforms. As a result, mergers between such platforms may be welfare enhancing, but involve redistribution of surplus from one side of the market to the other. Moreover, the limit of an atomistic allocation of property rights however is not monopoly pricing, indicating that there also exist differences with the received theory of complementarity.Two-Sided Markets · Complements · The Anticommons Problem

De omvang van het overheidsbeslag in België.

Deze studie gaat de omvang van het overheidsbeslag in België na voor de periode 1992-2009 op basis van zowel een macro- als een micro-economische benadering. Gemeten als de verhouding tussen de overheidsuitgaven en het Bruto Binnenlands Product (BBP) bedraagt het overheidsbeslag in België in 2009 via de macro-economische benadering 54.3%. Dit is nog beneden het recordniveau van 58% midden jaren ’80, maar benadert opnieuw het niveau van 1993 (55%) toen het uitvoeren van de Maastricht criteria om tot de euro te kunnen toetreden een prioriteit werd om het overheidsaandeel aanzienlijk te verminderen. De daaropvolgende sterke afname van de overheidsuitgaven in de jaren ‘90, werd de jongste jaren zo goed als volledig omgebogen (in 2006 bv. bedroeg het overheidsbeslag slechts 48%). Internationaal bevindt België zich bovenaan de ranglijst, enkel vooraf gegaan door Zweden, Finland, Frankrijk en Denemarken met respectievelijk 54.9, 56, 56 en 58.8%. Echter, deze landen hebben een veel lagere schuldgraad dan in België en recent onderzoek toont aan dat wanneer de schuldgraad boven de kritische waarde van 90% stijgt, de economische groei sterk vermindert. Onze analyse suggereert eveneens dat de overheidsuitgaven niet verder kunnen stijgen, eens er een schuldgraad van 90% is bereikt.

The Economics of State Fragmentation - Assessing the Economic Impact of Secession

This paper provides empirical evidence that declaring independence significantly lowers per capita GDP based on a large panel of countries covering the period 1950-2016. To do so, we rely on a semi-parametric identification strategy that controls for the confounding effects of past GDP dynamics, anticipation effects, unobserved heterogeneity, model uncertainty and effect heterogeneity. Our baseline results indicate that declaring independence reduces per capita GDP by around 20% in the long run. We subsequently propose a quadruple-difference procedure to demonstrate that the results are not driven by simulation and matching inaccuracies or spillover effects. A second methodological novelty consists of the development of a two-step estimator that relies on the control function approach to control for the potential endogeneity of the estimated independence payoffs and their potential determinants, to shed some light on the primary channels driving our results. We find tentative evidence that the adverse effects of independence decrease in territorial size, pointing to the presence of economies of scale, but that they are mitigated when newly independent states liberalize their trade regime or use their new-found political autonomy to democratize

The Economics of State Fragmentation - Assessing the Economic Impact of Secession

This paper provides empirical evidence that declaring independence significantly lowers per capita GDP based on a large panel of countries covering the period 1950-2013. To do so, we rely on a semi-parametric identification strategy that controls for the confounding effects of past GDP dynamics, anticipation effects, unobserved heterogeneity, model uncertainty and effect heterogeneity. Our baseline results indicate that declaring independence reduces per capita GDP by around 20% in the long run. We subsequently propose a novel quadruple-difference procedure to demonstrate the stability of these results. A second methodological novelty consists of the development of a two-step estimator to shed some light on the primary channels driving our results. We find robust evidence that the adverse effects of independence increase in the extent of surface area loss, pointing to the presence of economies of scale, but that they are mitigated when newly independent states liberalize their trade regime or use their new-found political autonomy to democratize

The Economics of State Fragmentation - Assessing the Economic Impact of Secession

This paper provides empirical evidence that declaring independence significantly lowers per capita GDP based on a large panel of countries covering the period 1950-2013. To do so, we rely on a semi-parametric identification strategy that controls for the confounding effects of past GDP dynamics, anticipation effects, unobserved heterogeneity, model uncertainty and effect heterogeneity. Our baseline results indicate that declaring independence reduces per capita GDP by around 20% in the long run. We subsequently propose a novel quadruple-difference procedure to demonstrate the stability of these results. A second methodological novelty consists of the development of a two-step estimator to shed some light on the primary channels driving our results. We find robust evidence that the adverse effects of independence increase in the extent of surface area loss, pointing to the presence of economies of scale, but that they are mitigated when newly independent states liberalize their trade regime or use their new-found political autonomy to democratize

The Economics of State Fragmentation - Assessing the Economic Impact of Secession

This paper provides empirical evidence that declaring independence significantly lowers per capita GDP based on a large panel of countries covering the period 1950-2016. To do so, we rely on a semi-parametric identification strategy that controls for the confounding effects of past GDP dynamics, anticipation effects, unobserved heterogeneity, model uncertainty and effect heterogeneity. In a difference-in-difference setting, we demonstrate that 30 years after newly formed states declared independence, their inhabitants typically experience per capita GDP levels which lie 23% below those of countries which in all relevant aspects most closely resembled their own country's economic situation just prior to independence. We subsequently propose a novel quadruple-difference bias correction procedure to demonstrate the robustness of these findings. Finally, we develop a two-step estimator to shed some light on the primary channels driving our results. We find tentative evidence that the adverse effects of independence decrease in population size, pointing to the presence of economies of scale, and that they are also mitigated when newly independent states avoid violent secession, liberalize their trade regime or use their new-found political autonomy to democratize. We fail to find clear-cut evidence of the relevance of macroeconomic uncertainty or the economic desirability of declaring independence by referendum

The Economics of State Fragmentation - Assessing the Economic Impact of Secession

This paper provides empirical evidence that declaring independence significantly lowers per capita GDP based on a large panel of countries covering the period 1950-2016. To do so, we rely on a semi-parametric identification strategy that controls for the confounding effects of past GDP dynamics, anticipation effects, unobserved heterogeneity, model uncertainty and effect heterogeneity. In a difference-in-difference setting, we demonstrate that 30 years after newly formed states declared independence, their inhabitants typically experience per capita GDP levels which lie 23% below those of countries which in all relevant aspects most closely resembled their own country's economic situation just prior to independence. We subsequently propose a novel quadruple-difference bias correction procedure to demonstrate the robustness of these findings. Finally, we develop a two-step estimator to shed some light on the primary channels driving our results. We find tentative evidence that the adverse effects of independence decrease in population size, pointing to the presence of economies of scale, and that they are also mitigated when newly independent states avoid violent secession, liberalize their trade regime or use their new-found political autonomy to democratize. We fail to find clear-cut evidence of the relevance of macroeconomic uncertainty or the economic desirability of declaring independence by referendum