This paper considers the incentives of oligopolistic firms to diversify into technologically related markets when there are diseconomies of scope.There is a rent extraction incentive for firms to adopt flexible technologies which enable them to enter technologically related markets, thereby increasing competition.However, this strategic motive leads to inefficiency in production owing to diseconomies of scope.This paper shows that the welfare gain arising from increased competition is offset by the inefficiency in production, which may lead to lower welfare than in the case of pure monopoly.This is a counter-example to the contention that the diversification increases social welfare.
This paper delivers a significantly different empirical perspective on micro pricing behaviour
and its impact on macroeconomic processes than previous studies, largely resulting from the
fact that our weekly price data for the three major British supermarkets spans a seven year
period including the crisis years 2008-2010. We find that there is a large and significant
change in the behaviour of prices from 2008 onwards: prices change more frequently and the
average duration of price spells declines significantly. Several of our findings run strongly
counter to established empirical regularities, in particular the high overall frequency of
regular or reference price changes we uncover, the greater intensity of change in more
turbulent times and the numerical dominance of price falls over rises. The pricing behaviour
revealed also significantly challenges the implicit assumption that prices are tracking cost
changes.
The importance of imperfect competition has long been recognized in many areas of economics, perhaps most obviously in industrial economics and in the labour economics of trade unions. Despite the clear divergence of output and labour markets from the competitive paradigm in most countries, macroeconomics where it has used microfoundations has tended to stick to the Walrasian market-clearing approach. However, over the last decade a shift has begun away from a concentration on the Walrasian price-taker towards a world where firms, unions and governments may be strategic agents. This chapter takes stock of this burgeoning literature, focusing on the macroeconomic policy and welfare implications of imperfect competition, and contrasting them with those of Walrasian models.
n this paper we develop the Generalize Taylor Economy (GTE) in which there are many sectors with overlapping contracts of different lengths. We are able to show that even in economies with the same average contract length, monetary shocks will be more persistent when there are longer contracts. In particular we are able to solve the puzzle of why Calvo contracts appear to be more persistent than simple Taylor contracts: it is because the standard calibration of Calvo contracts is not correct
This paper argues that firm entry causes endogenous fluctuations in macroeconomic productivity through its effect on incumbent firms’ capacity utilization. The analysis shows that imperfect competition causes long-run excess entry leading to many small firms each with excess capacity. Since entry occurs slowly, macroeconomic shocks are initially borne by these incumbents who respond by altering their capacity utilization. As they vary utilization efficiency changes because of non-constant returns to scale and this aggregates to affect the economy’s productivity. In the long run, entry occurs and new firms dissipate the shock, which alleviates incumbents’ alteration in capacity. Therefore the endogenous productivity effect is temporary.
In this paper we develop a general model of an imperfectly competitive small open economy. There is a traded and non-traded sector, whose outputs are combined in order to produce a single final good that can be either consumed or invested. We make general assumptions about preferences and technology, and analyze the impact of fiscal policy on the economy. We find that the fiscal multiplier is between zero and one, and provide sufficient conditions for it to be increasing in the degree of imperfect competition. We also are able to compare the multiplier under free-entry and with a fixed number of firms and welfare. A simple graphical representation of the model is developed.
The measurement of waiting times varies widely across OECD countries. This chapter gives an overview of different measures of patients’ experience of waiting using examples from several countries. Common measures are the in-patient waiting time (from specialist addition to the list to treatment), the out-patient waiting time (from general practitioner referral to specialist visit) and the referral-to-treatment (from GP referral to treatment). Reported figures include the mean waiting times, the waiting time at different percentiles of the distribution (at the 50th percentile, i.e. the median, the 80th, 90th or 95th percentile), and the number of patients waiting more than a threshold waiting time, for example, three, six or nine months. Waiting times are reported in most countries by procedure (e.g. hip and knee replacement, cataract surgery) or by specialty (e.g. ophthalmology, orthopedics). They refer mainly to two distributions: i) the distribution of waiting times of patients treated in a given period (for example, a financial year); ii) the distribution of waiting times of the patients on the list at a point in time (a census date). Most information on waiting times is available from administrative databases from countries where waiting times are a significant policy issue, and less so from survey data.
'%3e%3cpath fill='%23012169' d='M0 0v30h60V0z'/%3e%3cpath stroke='%23fff' stroke-width='6' d='m0 0 60 30m0-30L0 30'/%3e%3cpath stroke='%23C8102E' stroke-width='4' d='m0 0 60 30m0-30L0 30' clip-path='url(%23b)'/%3e%3cpath stroke='%23fff' stroke-width='10' d='M30 0v30M0 15h60'/%3e%3cpath stroke='%23C8102E' stroke-width='6' d='M30 0v30M0 15h60'/%3e%3c/g%3e%3c/svg%3e)
