Three essays in industrial economics and public policy

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Show simple item record Bunchai, Cheawanet 2015-11-12T13:55:18Z 2015-11-12T13:55:18Z 2015-12-01 en_US
dc.description.abstract This dissertation comprises of three essays in industrial economics. My first essay analyzes social efficiency of entry into a downstream oligopoly of a vertical market structure, where an upstream supplier sells an essential input to all firms producing downstream. In the downstream markets, a multiproduct firm is both a monopoly in its own product and a leader in a different product market with free entry of followers. We show that in the presence of scale economies, entry is socially insufficient. The insufficiency of entry is due to the fact that entry generates a business-creating effect significantly large enough to dominate a business-stealing effect, regardless of whether the upstream supplier's input pricing strategy is discriminatory or uniform. This suggests that entry regulation as a public policy is socially undesirable in the downstream oligopoly of a vertical market structure. My second essay examines differences in welfare implications between discriminatory and uniform input price regimes in vertically related markets where a multiproduct firm operates downstream in two separate markets: one is a monopoly and the other is an oligopoly with entry of new firms. In the analysis, we analyze how the downstream entry into the oligopolistic market affects social efficiency. In an open economy, whether the input price regime is discriminatory or uniform, entry is always socially excessive in the presence of scale economies. This contrasts with the existing studies in the literature that entry is always socially insufficient in an open economy with the presence of scale economies. Focusing on the scenario where vertically integrated producer (VIP) adopts a non-foreclosure strategy, my third essay shows that downstream entry is socially insufficient despite scale economies and the marginal cost difference between the VIP and its retail competitors. The non-foreclosure equilibrium arises when the VIP's wholesale profit from the sales of an essential input is sufficiently large and the VIP shares the profit with its downstream competitors. For the case of an open economy where the VIP is a foreign firm, downstream entry continues to be socially insufficient. Entry regulation is therefore socially undesirable, but a production subsidy encouraging downstream entry is shown to be a welfare-improving policy. en_US
dc.description.sponsorship the National Broadcasting and Telecommunications Commission of Thailand en_US
dc.language.iso en_US en_US
dc.publisher Kansas State University en
dc.subject Downstream entry en_US
dc.subject Vertically related markets en_US
dc.subject Input pricing regimes en_US
dc.subject Non-foreclosure strategy en_US
dc.subject Social efficiency en_US
dc.subject Open economy en_US
dc.title Three essays in industrial economics and public policy en_US
dc.type Dissertation en_US Doctor of Philosophy en_US
dc.description.level Doctoral en_US
dc.description.department Economics en_US
dc.description.advisor Yang M. Chang en_US
dc.subject.umi Economics (0501) en_US 2015 en_US December en_US

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