scholarly journals Airline Networks, Mergers, and Consumer Welfare

2013 ◽  
Author(s):  
Kai Hüschelrath ◽  
Kathrin Mueller
Keyword(s):  
Consumer Welfare ◽  
Airline Networks

The Micro and Macro of Managerial Beliefs

2020 ◽  
Author(s):  
Jose Maria Barrero
Keyword(s):  
Rational Expectations ◽  
Asset Price ◽  
Heterogeneous Firms ◽  
Adjustment Costs ◽  
Consumer Welfare ◽  
Sales Growth ◽  
Firm Level ◽  
Managerial Decisions ◽  
Managerial Beliefs ◽  
Growth Volatility

This paper studies how biases in managerial beliefs affect managerial decisions, firm performance, and the macroeconomy. Using a new survey of US managers I establish three facts. (1) Managers are not over-optimistic: sales growth forecasts on average do not exceed realizations. (2) Managers are overprecise (overconfident): they underestimate future sales growth volatility. (3) Managers overextrapolate: their forecasts are too optimistic after positive shocks and too pessimistic after negative shocks. To quantify the implications of these facts, I estimate a dynamic general equilibrium model in which managers of heterogeneous firms use a subjective beliefs process to make forward-looking hiring decisions. Overprecision and overextrapolation lead managers to overreact to firm-level shocks and overspend on adjustment costs, destroying 2.1 percent of the typical firm’s value. Pervasive overreaction leads to excess volatility and reallocation, lowering consumer welfare by 0.5 to 2.3 percent relative to the rational expectations equilibrium. These findings suggest overreaction may amplify asset-price and business cycle fluctuations.

Mergers, Entry, and Consumer Welfare

2020 ◽  
Author(s):  
Peter Caradonna ◽  
Nathan Miller ◽  
Gloria Sheu
Keyword(s):  
Consumer Welfare

The Consumer Welfare Cost of Cable 'Build-out' Rules

2005 ◽  
Author(s):  
George S. Ford ◽  
Thomas M. Koutsky ◽  
Lawrence J. Spiwak
Keyword(s):  
Consumer Welfare ◽  
Welfare Cost

Models of network formation

2018 ◽  
Author(s):  
Mark Newman
Keyword(s):  
Degree Distribution ◽  
Network Formation ◽  
Preferential Attachment ◽  
Network Size ◽  
Large Network ◽  
Citation Networks ◽  
Airline Networks ◽  
Attachment Model ◽  
Delivery Networks

This chapter describes models of the growth or formation of networks, with a particular focus on preferential attachment models. It starts with a discussion of the classic preferential attachment model for citation networks introduced by Price, including a complete derivation of the degree distribution in the limit of large network size. Subsequent sections introduce the Barabasi-Albert model and various generalized preferential attachment models, including models with addition or removal of extra nodes or edges and models with nonlinear preferential attachment. Also discussed are node copying models and models in which networks are formed by optimization processes, such as delivery networks or airline networks.

scholarly journals Optimal Incentives for Patent Challenges in the Pharmaceutical Industry

2021 ◽  
Author(s):  
Enrico Böhme ◽  
Jonas Severin Frank ◽  
Wolfgang Kerber
Keyword(s):  
Pharmaceutical Industry ◽  
Market Entry ◽  
Consumer Welfare ◽  
Antitrust Law ◽  
Patent Litigation ◽  
Weak Patents ◽  
Optimal Incentives

AbstractIn this paper, we show that a provision in antitrust law to allow patent settlements with a later market entry of generics than the date that is expected under patent litigation can increase consumer welfare. We introduce a policy parameter for determining the optimal additional period for collusion that would incentivize the challenging of weak patents and maximize consumer welfare. While in principle, later market entry leads to higher profits and lower consumer welfare, this can be more than compensated for if more patents are challenged as a result.

Interrelationship Among Competition, Diversification and Liquidity Creation: Evidence from Indian Banks

2021 ◽  
Vol 15 (2) ◽  
pp. 183-204
Author(s):  
Pankaj Sinha ◽  
Naina Grover
Keyword(s):  
Inverse Relationship ◽  
Consumer Welfare ◽  
Adverse Impact ◽  
Public And Private ◽  
Jel Codes ◽  
Trade Off ◽  
Private Banks ◽  
Indian Banks ◽  
The Impact

This study analyses the impact of competition on liquidity creation by banks and investigates the dynamics between diversification, liquidity creation and competition for banks operating in India during the period from 2005 to 2018. Using the broad and narrow measures of liquidity creation, an inverse relationship is determined between liquidity creation and competition. The study also indicates a trade-off between pro-competitive policies to improve consumer welfare and the liquidity-destroying effects of competition, and it highlights how diversification affects liquidity creation. Highly diversified banks in India create less liquidity compared with less-diversified banks, both public and private. The liquidity-destroying effects of competition is intensified among highly diversified private banks, which suggest that diversification has not moderated the adverse impact of competition. JEL Codes: G01, G18, G21, G28

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