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Essays on Regulation and Public Policy in Imperfectly Competitive Markets.

Record Type:	Language materials, manuscript : Monograph/item
Title/Author:	Essays on Regulation and Public Policy in Imperfectly Competitive Markets./
Author:	Pareschi, Francisco.
Description:	1 online resource (253 pages)
Notes:	Source: Dissertations Abstracts International, Volume: 85-11, Section: A.
Contained By:	Dissertations Abstracts International85-11A.
Subject:	Public policy. -
Online resource:	click for full text (PQDT)
ISBN:	9798382762586

Essays on Regulation and Public Policy in Imperfectly Competitive Markets.
Pareschi, Francisco.

Essays on Regulation and Public Policy in Imperfectly Competitive Markets. - 1 online resource (253 pages)

Source: Dissertations Abstracts International, Volume: 85-11, Section: A.

Thesis (Ph.D.)--Northwestern University, 2024.

Includes bibliographical references

Chapter 1: Curbing Habit Formation: The Effects of Tobacco Control Policies in a Dynamic Equilibrium(with Gaston Lopez)We study the equilibrium effects of tobacco control policies. To accurately assess the impact of tobacco regulation on consumption, it is essential to anticipate firm responses. We highlight that consumers' dependence on cigarettes, which we refer to as consumer inertia, introduces dynamic incentives for firms. Thus, we develop a dynamic oligopoly model and estimate it using product-level data and a panel of smokers. Leveraging large tax fluctuations and a policy that forced approximately 40% of products out of the market, we show that smokers have significant addiction and brand loyalty. We then propose a tractable equilibrium notion to compute market outcomes and show that dynamic competition models under inertia capture firm behavior well. We use this framework to examine the counterfactual effect of caps on nicotine concentration and uniform packaging, which are expected to decrease smokers' addictiveness and brand loyalty, respectively. We highlight that firms' price and portfolio responses account for a substantial part of the policies' impact. Moreover, more simplistic models of static competition would have led to significantly different conclusions about expected companies' responses.Chapter 2: Dynamic Equilibrium Effects of Sin Taxes for Addictive ProductsI study the effects of addiction in the design of sin taxes. I highlight that the addictive properties of sin goods make the intensive margin of consumption more salient, which modifies the curvature with respect to traditional unit demand models. Moreover, I show that the relationship between curvature and pass-through is also affected by addiction because firms consider the long-term implications of their pricing decisions. In this context, the pass-through is determined by the relative change in the incentives to harvest current consumers and invest in future sales as taxes increase. Finally, I show how the demand and supply dynamics introduced by addiction significantly affect optimal taxes and incidence in the tobacco industry.Chapter 3: How Do Governments Engage in Price Discrimination? Evidence from a Large-Scale Nationalization(with Gaston Lopez)State-owned enterprises (SOEs) have the potential to correct market failures, but they are also subject to the influence of politics and interest groups. We examine how this trade-off affects pricing decisions in the context of the nationalization of the leading gasoline company in Argentina. Descriptive analysis suggests that pricing patterns changed after the nationalization. First, the government exerted less market power, charging lower prices on average. Second, it engaged in less economic price discrimination, reducing the correlation between prices and consumers' willingness to pay. Third, it engaged in political price discrimination, charging lower prices in provinces with political connections with the state-owned firm. We develop and estimate a model of gasoline supply and demand under market power and recover the government's objective function. We find that the nationalization is associated with lower markups, but also with politically motivated redistribution. Compared to a benevolent planner--that internalizes the welfare of all consumers and firms equally--the government sets prices as if it targets specific groups: middle-income households and households in provinces with political connections. Lastly, we study the company's response to policy alternatives, including pricing rules that are in place in SOEs worldwide. Our findings show that these rules effectively reduce the influence of politics in pricing but are associated with higher costs: they reduce overall welfare by 3% and increase the taxpayers' burden, reducing the SOE's profit by 4%. These findings emphasize the importance of politics in shaping governments' decisions and the role of SOEs as instruments for redistribution.

Electronic reproduction.
Ann Arbor, Mich. :
ProQuest,
2024

Mode of access: World Wide Web

ISBN: 9798382762586Subjects--Topical Terms:

1002398
Public policy.
Subjects--Index Terms:

Competitive marketsIndex Terms--Genre/Form:

554714
Electronic books.

Essays on Regulation and Public Policy in Imperfectly Competitive Markets.
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502 $a Thesis (Ph.D.)--Northwestern University, 2024.
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