A mechanism design perspective on firms and market power
Abstract/Contents
- Abstract
- Each chapter of this PhD dissertation develops new mechanism design techniques to study the following three economic problems relating to firms with market power: (i) optimal pricing and product design (Loertscher and Muir, 2021), (ii) optimal wage-setting and employment decisions (Loertscher and Muir, 2022), and (iii) optimal contracting by an input supplier and the decision of whether or not to offer a competing downstream product (Kang and Muir, 2022). The first chapter (Loertscher and Muir, 2021) considers the welfare implications of underpricing and rationing by a monopoly seller. These practices are considered something of a puzzle among economists. They are frequently observed in markets for perishable goods and often give rise to resale markets. This chapter develops a coherent model of these phenomena and deepens our understanding of the likely impact of policies such as the BOTS (Better Online Ticket Sales) Act, which reduces the efficiency of resale markets without banning them entirely. The second chapter of this dissertation (Loertscher and Muir, 2022) studies the implications of minimum wage policies when employers have market power. While the textbook model of a perfectly competitive market suggests that introducing a minimum wage can only reduce employment, it is well-known that imposing a minimum wage on a monopsony employer can increase employment. This chapter seeks to provide regulators with clearer guidance by showing how measures such as wage dispersion, efficiency wages and involuntary unemployment can be used to predict the implications of an increase in the minimum wage for employment. The third chapter (Kang and Muir, 2022) of this dissertation focuses on the antitrust implications of platforms that use their own marketplaces to sell in-house products. A natural example of such a platform is Amazon, which sells e-commerce and distribution services upstream, as well as its own private-label products downstream. In this chapter we adopt a mechanism design approach to characterize the optimal menu of contracts that dominant platform offer in upstream markets. Our main result then shows that consumers always benefit from the platform's decision to offer a competing product downstream. Consequently, antitrust laws prohibiting platforms from selling their own private-label products, such as those recently implemented in India, can harm consumers.
Description
| Type of resource | text |
|---|---|
| Form | electronic resource; remote; computer; online resource |
| Extent | 1 online resource. |
| Place | California |
| Place | [Stanford, California] |
| Publisher | [Stanford University] |
| Copyright date | 2022; ©2022 |
| Publication date | 2022; 2022 |
| Issuance | monographic |
| Language | English |
Creators/Contributors
| Author | Muir, Ellen Victoria |
|---|---|
| Degree supervisor | Milgrom, Paul R. (Paul Robert), 1948- |
| Thesis advisor | Milgrom, Paul R. (Paul Robert), 1948- |
| Thesis advisor | Akbarpour, Mohammad |
| Thesis advisor | Segal, Ilya |
| Degree committee member | Akbarpour, Mohammad |
| Degree committee member | Segal, Ilya |
| Associated with | Stanford University, Department of Economics |
Subjects
| Genre | Theses |
|---|---|
| Genre | Text |
Bibliographic information
| Statement of responsibility | Ellen Victoria Muir. |
|---|---|
| Note | Submitted to the Department of Economics. |
| Thesis | Thesis Ph.D. Stanford University 2022. |
| Location | https://purl.stanford.edu/dn710zh2264 |
Access conditions
- Copyright
- © 2022 by Ellen Victoria Muir
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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