D43 - Oligopoly and Other Forms of Market Imperfection

• Consumer Credit Regulation and Lender Market Power

  Staff Working Paper 2024-36 Zachary Bethune, Joaquín Saldain, Eric R. Young

  We investigate the welfare consequences of consumer credit regulation in a dynamic, heterogeneous-agent model with endogenous lender market power. Lenders post credit offers and borrowers—some informed and others uninformed—apply for credit. We calibrate the model to match characteristics of the unsecured consumer credit market and use the calibrated model to evaluate interest rate ceilings.

  Content Type(s): Staff research, Staff working papers Topic(s): Credit and credit aggregates, Financial markets, Interest rates JEL Code(s): D, D1, D15, D4, D43, D6, D60, D8, D83, E, E2, E21, G, G5, G51

• Markups and Inflation in Oligopolistic Markets: Evidence from Wholesale Price Data

  Staff Working Paper 2024-20 Patrick Alexander, Lu Han, Oleksiy Kryvtsov, Ben Tomlin

  We study how the interaction of market power and nominal price rigidity influences inflation dynamics. We find that pass-through declines with price stickiness when markets are concentrated, which implies a lower slope of the New Keynesian Phillips curve.

  Content Type(s): Staff research, Staff working papers Topic(s): Firm dynamics, Inflation and prices, Market structure and pricing, Monetary policy transmission JEL Code(s): D, D4, D43, E, E3, E31, L, L1, L13, L8, L81

• Trade and Market Power in Product and Labor Markets

  Staff Working Paper 2021-17 Gaelan MacKenzie

  Trade liberalizations increase the sales and input purchases of productive firms relative to their less productive domestic competitors. This reallocation affects firms’ market power in their product and input markets. I quantify how the labour market power of employers affects the distribution and size of the gains from trade.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Labour markets, Market structure and pricing, Productivity, Trade integration JEL Code(s): D, D4, D43, F, F1, F12, F6, J, L, L1, L13

• Non-competing Data Intermediaries

  Staff Working Paper 2020-28 Shota Ichihashi

  I study a model of competing data intermediaries (e.g., online platforms and data brokers) that collect personal data from consumers and sell it to downstream firms.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models JEL Code(s): D, D4, D42, D43, D8, D80, L, L1, L12

• Information Sharing and Bargaining in Buyer-Seller Networks

  Staff Working Paper 2016-63 Sofia Priazhkina, Frank H. Page

  This paper presents a model of strategic buyer-seller networks with information exchange between sellers. Prior to engaging in bargaining with buyers, sellers can share access to buyers for a negotiated transfer. We study how this information exchange affects overall market prices, volumes and welfare, given different initial market conditions and information sharing rules.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Firm dynamics, Market structure and pricing JEL Code(s): C, C7, C71, C78, D, D2, D21, D4, D43, D8, D85, L, L1, L13

• Uncertain Costs and Vertical Differentiation in an Insurance Duopoly

  Staff Working Paper 2014-14 Radoslav Raykov

  Classical oligopoly models predict that firms differentiate vertically as a way of softening price competition, but some metrics suggest very little quality differentiation in the U.S. auto insurance market.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Market structure and pricing JEL Code(s): D, D4, D43, D8, D81, G, G2, G22, L, L2, L22

• Cross-border Mergers and Hollowing-out

  Staff Working Paper 2009-30 Oana Secrieru, Marianne Vigneault

  The purpose of our paper is to examine the profitability and social desirability of both domestic and foreign mergers in a location-quantity competition model, where we allow for the possibility of hollowing-out of the target firm. We refer to hollowing-out as the situation where the target firm is shut down following a merger with a domestic or foreign acquirer.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, International topics, Market structure and pricing JEL Code(s): D, D4, D43, G, G3, G34, L, L1, L13, L4, L41