Universität zu Köln

The Impact of Market Characteristics on Price Setting and Market Outcomes: Four Essays

Rasch, Alexander (2009) The Impact of Market Characteristics on Price Setting and Market Outcomes: Four Essays. PhD thesis, Universität zu Köln.

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    Abstract

    The thesis deals with the question how market characteristics and the change thereof affect market players� price-setting decisions and market outcomes. The market characteristics which are analyzed are the possibility to multihome, market transparency, differentiation, and inequity aversion. The first three models use the concept of horizontal product differentiation. The fourth model looks at bilateral bargaining in a double-auction framework with inequity-averse sellers and buyers. The first model on two-sided markets with one singlehoming and one multihoming side shows that due to product differentiation, platforms are no longer local monopolists on the multihoming side which benefits the latter as it may end up paying a lower price than the singlehoming side. The second model shows that with elastic demand, an increase in market transparency on the customer side may have a stabilizing effect for a collusive agreement: Depending on the degree of differentiation and on the level of transparency already achieved, a more transparent market may be bad news for customers as collusion may be facilitated. The third model looks at the implications of different internal decision-making structures for collusive stability. It is shown that when transportation costs are high, collusion is more stable under the delegation of decision-making powers. Furthermore, collusion with maximum prices is more profitable if price setting is delegated to the local units. The opposite is true for low discount factors. The fourth model shows that if compassion is sufficiently strong in a double-auction environment, an efficient equilibrium exists such that all gains of trade are realized. The opposite holds in a situation where compassion is weak and in the limit of infinitely strong envy as trade then breaks down completely. The analysis also shows that bids in a separating equilibrium are further away from (closer to) truth-telling, the greater the importance of envy (compassion). Moreover, pooling equilibria are shown to be always more inefficient compared to the case without inequity aversion.

    Item Type: Thesis (PhD thesis)
    Creators:
    CreatorsEmail
    Rasch, Alexanderrasch@wiso.uni-koeln.de
    URN: urn:nbn:de:hbz:38-27542
    Subjects: Economics
    Uncontrolled Keywords:
    KeywordsLanguage
    collusion , horizontal product differentiation , inequity aversion , double auction , two-sided marketEnglish
    Faculty: Wirtschafts- u. Sozialwissenschaftliche Fakultät
    Divisions: Wirtschafts- u. Sozialwissenschaftliche Fakultät > Staatswissenschaftliches (Volkswirtschaftliches) Seminar
    Language: English
    Date: 2009
    Date Type: Completion
    Date of oral exam: 19 May 2009
    Full Text Status: Public
    Date Deposited: 08 Jul 2009 10:05:31
    Referee
    NameAcademic Title
    Wambach, AchimProf., PhD
    URI: http://kups.ub.uni-koeln.de/id/eprint/2754

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