#industrialorganization — Public Fediverse posts

Zombie firms and the growth of the living: the labor market channel https://d.repec.org/n?u=RePEc:bdi:opques:qef_1058_26&r=&r=lma
"By hoarding workers in unproductive employment relationships, zombie firms reduce the effective local labor supply available to healthy competitors, thereby limiting productive firms’ ability to expand employment when faced with favorable demand conditions
… Effects are strongest for white-collar workers and for micro and small firms, consistent with tighter constraints on scarce skills and greater reliance on local hiring
… suggesting that labor-market tightness induced by zombies may be particularly binding where hiring margins and recruitment networks are thinner.
… results caution against industrial policies that prioritize the preservation of non-viable incumbents"
#LaborMarkets #IndustrialOrganization

#PersonalizedPricing Isn’t All Bad for Consumers https://www.cato.org/blog/personalized-pricing-isnt-all-bad-consumers
"Both individualized and dynamic pricing have existed in our daily lives for years. But the combination of the two using modern technology has led to fears… that “corporations are collecting our personal data to extract every cent they can to pad their pockets.”
… the best protection for consumers is a competitive market. In #competitiveMarkets with no supply constraints, individualized dynamic pricing has proven to largely benefit consumers. Any time a firm uses #IDP to raise prices for a given consumer, that automatically allows a competing firm to undercut those prices and take that consumer away"
#economics #IndustrialOrganization

#AI and the Quantity and Quality of Creative Products: Have LLMs Boosted Creation of Valuable Books? https://d.repec.org/n?u=RePEc:nbr:nberwo:34777&r=&r=ind
"While the average quality of new #books has fallen with the LLM-induced influxand while much of the new work appears to be of little value to consumers– the #LLM influx has delivered a large number of works near the top of the usage/quality distribution. The LLM-era entry process delivers a quarter to a half more consumer surplus from books than the pre-LLM process. Moreover, the arrival of LLMs does not appear to have displaced activity by incumbent authors
… Authors entering since the LLM influx produce predominantly low-quality work; and the higher-quality output of pre-LLM authors entrants has risen"
#writing #IndustrialOrganization

The Labor Market Consequences of Acquisitions https://d.repec.org/n?u=RePEc:ces:ceswps:_12162&r=&r=ind
"… the consequences of corporate acquisitions for workers and find that they are far from neutral: earnings decline through both job displacement and wage cuts among stayers from target firms. These wage cuts do not reflect increased monopsony power. Instead, they are concentrated in acquisitions where the acquirer’s CEO sat on the target’s board prior to the transaction, suggesting insider knowledge of pay policies.
… such CEOs disproportionately acquire high-paying firms and subsequently reduce wages. The result is rent redistribution from workers to shareholders and managers, as seen in higher profits and CEO pay. These findings imply that the labor-market risks of acquisitions arise not only from greater market concentration, as documented in previous work, but also from managerial incentives that conventional antitrust policies are ill-equipped to address."
#LaborEcon #wages #IndustrialOrganization

Bird transmitter packing pr0n. So neatly arranged. ❤️
#edc #IndustrialOrganization #knolling

Bird transmitter packing pr0n. So neatly arranged. ❤️
#edc #IndustrialOrganization #knolling

More regulations might cause more concentration https://freemarketalternative.blogspot.com/2025/03/more-regulations-might-cause-more.html
"Complicated regulations create a fixed cost for established companies that they handle with divisions of specialists. But for startups with few employees and little capital, these #regulations act as direct #barriersToEntry

… provide some evidence that the increase in concentration can be explained by increasing regulations."
#economics #IndustrialOrganization

Labor share and market power in European firms https://d.repec.org/n?u=RePEc:pra:mprapa:123442&r=&r=lma
"firms’ product and labor market power, as reflected in product markups and labor markdowns, enable firms to capture a larger share of economic output at the expense of workers.
… empirical analysis shows that markdowns are negative correlated with labor share, as firms reduce employment and suppress #wages below the marginal revenue of labor.
Product markups exhibit a dual effect: they can positively influence the labor share by increasing wages and employment when firms reinvest additional profits into production expansion. … markups indirectly reduce the labor share due to their positive link with labor markdowns. Firms with significant pricing power often suppress wages and limit hiring, diminishing the labor share.
… empirical results reveal the presence of a hump-shaped relationship between product markups and labor share. Initially, as product markups increase, the labor share rises, but this trend reverses when markups reach high levels. This nonlinearity underscores the dual nature of markups: while moderate markups have a direct positive effect on labor share, mitigating labor markdowns, high markups enable firms to exert substantial #monopsony power, diminishing the labor share.
The analysis reveals significant cross-country #heterogeneity in the effects of markups and markdowns on the labor share."
#IndustrialOrganization #LaborMarkets

Deep Q-learning of prices in oligopolies: the number of competitors matters
https://www.sfb1283.uni-bielefeld.de/preprints/sfb24074.pdf
"…whereas in a duopoly setting DQNs might lead to prices very close to the monopoly level, the supra-competitive #pricing resulting from the interaction of these algorithms quickly vanishes as the number of firms increases. In particular, markets with at least five competitors robustly yield prices close to the Nash equilibrium level. These findings are robust concerning changes in the key parameters of the algorithm."

The result reminded me very much of this 20+ year-old #experimentalEconomics paper:
"Two are few and four are many: number effects in experimental oligopolies"
https://doi.org/10.1016/j.jebo.2002.10.002 or https://www.econstor.eu/bitstream/10419/78422/1/bgse12_2001.pdf
…and they cited it, too!

#ML #IndustrialOrganization #GameTheory

Why Don’t EU Firms Innovate? The Hidden Costs of Failure https://conversableeconomist.com/2024/12/18/why-dont-eu-firms-innovate-the-hidden-costs-of-failure/
"… high firing costs tend to direct R&D investment towards mature products rather than new ones. In an open economy, countries with high levels of employment protection tend to specialize in well established industries and leave #innovation of new products to countries with less employment protection.
… restructuring costs (that include much more than severance packages) are approximately 10 times higher in countries with high labor protection, such as in Western Europe, than in countries with low labor protection such as in the United States"
#LaborMarkets #IndustrialOrganization

Tuition too high? Blame competition https://arxiv.org/pdf/2405.17762
"… #competition between academic institutions for resources & #reputation leads to #tuition escalation that negatively affects students.
… rankings, a capital campaign, facilities improvements, and an excellence campaign increase college tuition, institutional debt, and expenditures per student; only the scenario of ignoring the #rankings decreases these measures"
#IndustrialOrganization

Technological Shocks & Algorithmic Decision Aids in #CredenceGoods Markets http://d.repec.org/n?u=RePEc:arx:papers:2401.17929&r=ain
"…high-ability experts may forego decision aid in order to differentiate themselves from low-ability experts
…experiment supports hypothesis: high-ability experts are less likely than low-ability experts to invest into an algorithmic decision aid
…pervasive under-investments, & no effect on expert #honesty"
#ExperimentalEcon #ai #IndustrialOrganization

Acquihiring for Monopsony Power http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_500&r=lma
"… the goal of such acquihires might be to shut down the most relevant labor market competitor. This grants the acquirer #monopsony power over specialized talent. As a consequence, acquihiring may harm employees and be socially inefficient."
#LaborMarkets #IndustrialOrganization #wages

Sharing the Tech Wealth https://www.project-syndicate.org/commentary/digital-public-infrastructure-holds-key-to-shared-prosperity-by-diane-coyle-2024-02
"The time has come to establish effective and necessary institutional mechanisms to ensure that potentially transformative technologies benefit everyone, not just a privileged few."
#economics #IndustrialOrganization

Rebuilding #Trust in Expertise — @DianeCoyle1859
https://www.project-syndicate.org/commentary/experts-must-learn-how-to-listen-to-public-by-diane-coyle-2023-11

Social media has played a significant role in the growing public distrust of experts. However, this backlash against #expertise is not driven solely by economic distress or conspiracy theories. Technological and economic shifts have created a need for value judgments, challenging the traditional role of experts.

#IndustrialOrganization
#ScienceCommunication
#DecisionMaking

Price dispersion across online platforms: Evidence from hotel room prices in London https://arxiv.org/abs/2310.12341
"…in the presence of aggregate demand uncertainty and capacity constraints, #priceDispersion could exist even when products are homogeneous, consumers are homogeneous, all agents have perfect information about the market structure, and consumers face no search costs to acquire information about the products"
#IndustrialOrganization

The Effective Competitive Constraint Standard:
The European #Competition Council (ECC) has proposed a new standard for assessing anticompetitive behavior that incorporates modern microeconomic theory and takes a broader view of #ConsumerWelfare. The ECC standard considers #collusion, systemic exclusionary effects, and significant curtailment of rivals' opportunities to compete as #anticompetitive conduct.
https://www.promarket.org/2023/04/12/the-effective-competitive-constraint-standard/
#regulation #IndustrialOrganization

More hashtags for better discovery:
#LaborEcon #LaborEconomics #IndustrialRelations #Wages #work #ExperimentalEcon #ExperimentalEconomics #BehavioralEcononomics #CognitiveEconomics #EconomicPsychology #IndustrialOrganization #GameTheory #Microeconomics #Econometrics #SocialNorms #SocialPreferences #Reciprocity #BoundedRationality #heterogeneity

#Erdős4

#Typography #PlainText #Linux #cli #Accessibility #MultipleSclerosis

I've updated my list of interesting #economics #conferences for 2023. The purpose is to have all submission deadlines, conference dates, locations and websites in one place.

It's focused on general interest, #IndustrialOrganization and #theory conferences.

Link: https://www.igorletina.com/conferences.html

@industrialorganization
@mechanismdesign
@contests
@gametheory

#Econjobmarket alert: The UK Competition and Markets Authority is hiring for several full-time research roles in the new research-focused Microeconomics Unit.

These would be great for early-career researchers looking to do research with great policy impact!

#IndustrialOrganization and related fields: #innovation #OrganizationalEcon, #PersonnelEcon and anyone interested in macro market power, productivity, etc.

If you have any questions, I would be happy to chat.

https://www.civilservicejobs.service.gov.uk/csr/index.cgi?SID=b3duZXJ0eXBlPWZhaXImcGFnZWNsYXNzPUpvYnMmc2VhcmNocGFnZT0xJm93bmVyPTUwNzAwMDAmam9ibGlzdF92aWV3X3ZhYz0xODIyMDI4JnNlYXJjaHNvcnQ9c2NvcmUmcGFnZWFjdGlvbj12aWV3dmFjYnlqb2JsaXN0JnVzZXJzZWFyY2hjb250ZXh0PTE1MTQyNDkwJnJlcXNpZz0xNjY3NTc2OTAzLTA1MTdiZDhjMTg5MTFkN2EyYjQ4MzFkMTY2OGFhZjg4MTRiMmY4Njg=

Market power amplifies the price effects of demand shocks

New paper in Economics Letters with Flavio Menezes, showing (contra Larry Summers and others) that market power can exacerbate demand inflation

#IndustrialOrganization Group
@industrialorganization #Macroeconomics @macroeconomics

Just a reminder that the target deadline of our #jobposting for a (long) postdoc at DICE in #BehavioralEconomics, or Empirical #IndustrialOrganization, or #CompetitionPolicy is tomorrow:
https://inomics.com/job/postdoctoral-researcher-mfd-100-pay-grade-13-tv-l-1528991 #econtwitter