Monday, November 10, 2014

Media Merger Wave

In class, I mention that using the Stackelberg leader model that there is an incentive for leaders to keep merging, which helps explain merger waves.  Here The New York Times gives us an example of a merger wave in the media industry, and if the merged firms can keep their market share then this fits with the Stackelberg leader solution to the horizontal merger paradox.

Monday, November 3, 2014

Food Distribution Merger

The Wall Street Journal reports that the two largest US food distribution firms (Sysco and US Foods) are merging.  In economics when firms in the same industry merge, we refer to this as a horizontal merger, and there are specific criteria that the US government antitrust authorities look at with horizontal mergers.  The big question to be answered is whether the merger will increase or decrease consumer welfare.  In this case the consumer is a firm such as a restaurant or hotel.  Thus what is the economic impact of the merger on the prices that restaurant's or hotel's have to pay for the food they purchase from this merged firm (or other competitors).

Monday, October 13, 2014

Jean Tirole Nobel Laurautte

Jean Tirole is the newest Noble Laureate in Economics.  Much of his work revolves around Industry Analysis and there are a number of articles from the Economist you can read at the end of the link above.

Tuesday, September 30, 2014

State Taxes and Competitive Balance

As we learn in Sports Economics, some of the usual suspects as to why sports leagues are competitively imbalanced do not hold up to theoretical or empirical analysis.  While this article is not that strong on empirical analysis, it does conclude that differences in US State Income taxes do not affect competitive balance.