Tomaso Duso - Academia.edu (original) (raw)
Papers by Tomaso Duso
The German statutory health insurance market was exposed to competition in 1996. To avoid adverse... more The German statutory health insurance market was exposed to competition in 1996. To avoid adverse selection, a prospective risk compensation scheme was introduced in 1994. Due to their low contribution rates, company-based sickness funds were able to attract a lot of new members. We analyze -using data from the German Socio-Economic Panel -the determinants of these transitions from 1995 to 2000. By estimating a simultaneous two equation system, we find that health status positively, and significantly, affects the probability of changing to a company-based sickness fund, especially after controlling for age. Thus the risk compensation scheme does not fully control for the health status of the changers. Consequently, the comparative advantages of company-based funds will increase over time. This observation provides evidence for the standard Rothschild-Stiglitz separating equilibrium.
Long Range Planning, 2016
The strategic management literature has found it difficult to differentiate between collusive and... more The strategic management literature has found it difficult to differentiate between collusive and efficiency-based synergies in horizontal merger activity. We propose a schematic to classify mergers that yields more information on merger types and merger effects, and that can, moreover, distinguish between mergers characterized largely by collusion-based synergies and mergers characterized largely by efficiency-based synergies. Crucial to the proposed measurement procedure is that it encompasses the impact of merger events not only on merging firms -as is custom -but also on non-merging competitor firms (the rivals). Employing the event-study methodology with stock-market data on samples of large horizontal mergers drawn from the US and UK (an Anglo-Saxon sub-sample) and from the European continent, we demonstrate how the proposed schematic can better clarify the nature of merger activity.
Journal of Industry Competition and Trade, 2012
by Astrid Jung and Tomaso Duso This paper empirically investigates market behavior and firms' lob... more by Astrid Jung and Tomaso Duso This paper empirically investigates market behavior and firms' lobbying in a unified structural setup. In a sequential game, where firms lobby for regulation before they compete in the product market, we derive a testable measure of lobbying coordination. Applying the setting to the early U.S. cellular services industry, we find that lobbying expenditures, as measured by campaign contributions, and market conduct were consistent with a one-shot Nash equilibrium and that price caps were binding on average. Furthermore, campaign contributions from cellular firms effectively lowered the burden of the price caps and reduced production costs.
Journal of Law and Economics, 2007
The objective of this paper is to investigate the determinants of EU merger control decisions. We... more The objective of this paper is to investigate the determinants of EU merger control decisions. We consider a sample of 164 EU merger control decisions and evaluate the anti-competitive consequences of these mergers from the reaction of the stock market price of competitors to the merging firms. We then account for the discrepancies between the actual decisions and what the stock market would have dictated in terms of the political economy surrounding the cases. With respect to type I errors (seemingly pro-compeitive mergers that have been prohibited), our data uncovers some systematic biases but finds no support for the common claim that the Commission is being influenced by the fate of competitors at the expense of consumer interests. We also find systematic biases towards type II errors (seemingly anticompetitive mergers that are cleared), which appear to be affected by a number of institutional and political features of EU decision making. We find support for the view that anticompetitive mergers are more likely to be cleared in phase I, when it involves firms from large member states but less likely to be cleared when the relevant market is national. We also find that the fequency of errors has increased during the tenure of Commissioner Monti.
Current Medical Research and Opinion, 2010
This paper tests whether upstream R&D cooperation leads to downstream collusion. We consider an o... more This paper tests whether upstream R&D cooperation leads to downstream collusion. We consider an oligopolistic setting where firms enter in research joint ventures (RJVs) to lower production costs or coordinate on collusion in the product market. We show that a sufficient condition for identifying collusive behavior is a decline in the market share of RJV-participating firms, which is also necessary
SSRN Electronic Journal, 2000
SSRN Electronic Journal, 2000
ABSTRACT We investigate the welfare impact of parallel imports using a large panel dataset contai... more ABSTRACT We investigate the welfare impact of parallel imports using a large panel dataset containing monthly information on sales, ex-factory prices, and further product characteristics for all 649 anti-diabetic drugs sold in Germany between 2004 and 2010. We estimate a two-stage nested logit model of demand, and on the basis of an oligopolistic model of multi-product firms, we then recover the marginal costs and markups. We finally evaluate the effect of the parallel imports' policy by calculating a counterfactual scenario without parallel trade. According to our estimates, parallel imports reduce the prices for patented drugs by 11% and do not have a significant effect on prices for generic drugs. This amounts to an increase in the demand-side surplus by €19 million per year (or €130 million in total), which is relatively small compared with the average annual market size of around €227 million based on ex-factory prices. The variable profits for the manufacturers of original drugs from the German market are reduced by €18 million (or 37%) per year when parallel trade is allowed, yet only one third of this difference is appropriated by the importers. Copyright © 2014 John Wiley & Sons, Ltd.
Journal of Competition Law and Economics, 2014
We study the effect of a merger in a dynamic high-technology industry-the videogame market-which ... more We study the effect of a merger in a dynamic high-technology industry-the videogame market-which is characterized by the frequent introduction of new products. To assess the impact of the merger between two large specialist retailers in the United Kingdom-Game Group PLC and Games Station Limited-we perform a difference-in-differences analysis comparing the price evolution of the merging parties with that of their 7 major competitors on an original sample of 196 videogames belonging to 6 different consoles. The results of our econometric analyses suggest that there has been a reduction in the general level of prices of both new and pre-owned games after the merger. This decline has been more marked for the merging parties, which suggests that the merger between Game Group PLC and Games Station Limited did not lead to a substantial lessening of competition; rather, it is consistent with the existence of efficiency gains.
SSRN Electronic Journal, 2000
ABSTRACT We study the effect of a merger in a dynamic high-technology industry -- the videogame m... more ABSTRACT We study the effect of a merger in a dynamic high-technology industry -- the videogame market -- which is characterized by frequent introduction of new products. To assess the impact of the merger between two large specialist retailers in the UK, we perform a difference-in-differences analysis comparing the price evolution of the merging parties to that of their 7 major competitors on an original sample of 196 videogames belonging to six different consoles. The results of our econometric analyses suggest that there has been a reduction in the general level of prices of both new and pre-owned games after the merger. This decline has been more marked for the merging parties, which suggests that the merger between Game and Gamestation did not lead to a substantial lessening of competition; rather it is consistent with the existence of efficiency gains.
SSRN Electronic Journal, 2000
The Journal of Law and Economics, 2007
The objective of this paper is to investigate the determinants of EU merger control decisions. We... more The objective of this paper is to investigate the determinants of EU merger control decisions. We consider a sample of 164 EU merger control decisions and evaluate the anti-competitive consequences of these mergers from the reaction of the stock market price of competitors to the merging firms. We then account for the discrepancies between the actual decisions and what the stock market would have dictated in terms of the political economy surrounding the cases. With respect to type I errors (seemingly pro-compeitive mergers that have been prohibited), our data uncovers some systematic biases but finds no support for the common claim that the Commission is being influenced by the fate of competitors at the expense of consumer interests. We also find systematic biases towards type II errors (seemingly anticompetitive mergers that are cleared), which appear to be affected by a number of institutional and political features of EU decision making. We find support for the view that anticompetitive mergers are more likely to be cleared in phase I, when it involves firms from large member states but less likely to be cleared when the relevant market is national. We also find that the fequency of errors has increased during the tenure of Commissioner Monti.
Discussion Paper Series of Sfb Tr 15 Governance and the Efficiency of Economic Systems, Oct 1, 2010
Based on a database of 326 merger cases scrutinized by the European Commission between 1990 and 2... more Based on a database of 326 merger cases scrutinized by the European Commission between 1990 and 2007, we evaluate the economic impact of the change in European merger legislation in 2004. We first propose a general framework to assess merger policy effectiveness, which is based on standard oligopoly theory and makes use of stock market reactions as an external assessment of the merger and the merger control decisions. We then focus on four different dimensions of effectiveness: 1) legal certainty; 2) frequency and determinants of type I and type II errors; 3) rent-reversion achieved by different merger policy tools; and 4) deterrence of anti-competitive mergers. To infer the economic impact of the merger policy reform, we compare the results of our four tests before and after its introduction. Our results suggest that the policy reform seems to have been only a modest improvement of European merger policy.
Strategic Organization, 2011
The strategic management literature has found it difficult to differentiate between collusive and... more The strategic management literature has found it difficult to differentiate between collusive and efficiency-based synergies in horizontal merger activity. We propose a schematic to classify mergers that yields more information on merger types and merger effects, and that can, moreover, distinguish between mergers characterized largely by collusion-based synergies and mergers characterized largely by efficiency-based synergies. Crucial to the proposed measurement procedure is that it encompasses the impact of merger events not only on merging firms -as is custom -but also on non-merging competitor firms (the rivals). Employing the event-study methodology with stock-market data on samples of large horizontal mergers drawn from the US and UK (an Anglo-Saxon sub-sample) and from the European continent, we demonstrate how the proposed schematic can better clarify the nature of merger activity.
The German statutory health insurance market was exposed to competition in 1996. To avoid adverse... more The German statutory health insurance market was exposed to competition in 1996. To avoid adverse selection, a prospective risk compensation scheme was introduced in 1994. Due to their low contribution rates, company-based sickness funds were able to attract a lot of new members. We analyze -using data from the German Socio-Economic Panel -the determinants of these transitions from 1995 to 2000. By estimating a simultaneous two equation system, we find that health status positively, and significantly, affects the probability of changing to a company-based sickness fund, especially after controlling for age. Thus the risk compensation scheme does not fully control for the health status of the changers. Consequently, the comparative advantages of company-based funds will increase over time. This observation provides evidence for the standard Rothschild-Stiglitz separating equilibrium.
Long Range Planning, 2016
The strategic management literature has found it difficult to differentiate between collusive and... more The strategic management literature has found it difficult to differentiate between collusive and efficiency-based synergies in horizontal merger activity. We propose a schematic to classify mergers that yields more information on merger types and merger effects, and that can, moreover, distinguish between mergers characterized largely by collusion-based synergies and mergers characterized largely by efficiency-based synergies. Crucial to the proposed measurement procedure is that it encompasses the impact of merger events not only on merging firms -as is custom -but also on non-merging competitor firms (the rivals). Employing the event-study methodology with stock-market data on samples of large horizontal mergers drawn from the US and UK (an Anglo-Saxon sub-sample) and from the European continent, we demonstrate how the proposed schematic can better clarify the nature of merger activity.
Journal of Industry Competition and Trade, 2012
by Astrid Jung and Tomaso Duso This paper empirically investigates market behavior and firms' lob... more by Astrid Jung and Tomaso Duso This paper empirically investigates market behavior and firms' lobbying in a unified structural setup. In a sequential game, where firms lobby for regulation before they compete in the product market, we derive a testable measure of lobbying coordination. Applying the setting to the early U.S. cellular services industry, we find that lobbying expenditures, as measured by campaign contributions, and market conduct were consistent with a one-shot Nash equilibrium and that price caps were binding on average. Furthermore, campaign contributions from cellular firms effectively lowered the burden of the price caps and reduced production costs.
Journal of Law and Economics, 2007
The objective of this paper is to investigate the determinants of EU merger control decisions. We... more The objective of this paper is to investigate the determinants of EU merger control decisions. We consider a sample of 164 EU merger control decisions and evaluate the anti-competitive consequences of these mergers from the reaction of the stock market price of competitors to the merging firms. We then account for the discrepancies between the actual decisions and what the stock market would have dictated in terms of the political economy surrounding the cases. With respect to type I errors (seemingly pro-compeitive mergers that have been prohibited), our data uncovers some systematic biases but finds no support for the common claim that the Commission is being influenced by the fate of competitors at the expense of consumer interests. We also find systematic biases towards type II errors (seemingly anticompetitive mergers that are cleared), which appear to be affected by a number of institutional and political features of EU decision making. We find support for the view that anticompetitive mergers are more likely to be cleared in phase I, when it involves firms from large member states but less likely to be cleared when the relevant market is national. We also find that the fequency of errors has increased during the tenure of Commissioner Monti.
Current Medical Research and Opinion, 2010
This paper tests whether upstream R&D cooperation leads to downstream collusion. We consider an o... more This paper tests whether upstream R&D cooperation leads to downstream collusion. We consider an oligopolistic setting where firms enter in research joint ventures (RJVs) to lower production costs or coordinate on collusion in the product market. We show that a sufficient condition for identifying collusive behavior is a decline in the market share of RJV-participating firms, which is also necessary
SSRN Electronic Journal, 2000
SSRN Electronic Journal, 2000
ABSTRACT We investigate the welfare impact of parallel imports using a large panel dataset contai... more ABSTRACT We investigate the welfare impact of parallel imports using a large panel dataset containing monthly information on sales, ex-factory prices, and further product characteristics for all 649 anti-diabetic drugs sold in Germany between 2004 and 2010. We estimate a two-stage nested logit model of demand, and on the basis of an oligopolistic model of multi-product firms, we then recover the marginal costs and markups. We finally evaluate the effect of the parallel imports' policy by calculating a counterfactual scenario without parallel trade. According to our estimates, parallel imports reduce the prices for patented drugs by 11% and do not have a significant effect on prices for generic drugs. This amounts to an increase in the demand-side surplus by €19 million per year (or €130 million in total), which is relatively small compared with the average annual market size of around €227 million based on ex-factory prices. The variable profits for the manufacturers of original drugs from the German market are reduced by €18 million (or 37%) per year when parallel trade is allowed, yet only one third of this difference is appropriated by the importers. Copyright © 2014 John Wiley & Sons, Ltd.
Journal of Competition Law and Economics, 2014
We study the effect of a merger in a dynamic high-technology industry-the videogame market-which ... more We study the effect of a merger in a dynamic high-technology industry-the videogame market-which is characterized by the frequent introduction of new products. To assess the impact of the merger between two large specialist retailers in the United Kingdom-Game Group PLC and Games Station Limited-we perform a difference-in-differences analysis comparing the price evolution of the merging parties with that of their 7 major competitors on an original sample of 196 videogames belonging to 6 different consoles. The results of our econometric analyses suggest that there has been a reduction in the general level of prices of both new and pre-owned games after the merger. This decline has been more marked for the merging parties, which suggests that the merger between Game Group PLC and Games Station Limited did not lead to a substantial lessening of competition; rather, it is consistent with the existence of efficiency gains.
SSRN Electronic Journal, 2000
ABSTRACT We study the effect of a merger in a dynamic high-technology industry -- the videogame m... more ABSTRACT We study the effect of a merger in a dynamic high-technology industry -- the videogame market -- which is characterized by frequent introduction of new products. To assess the impact of the merger between two large specialist retailers in the UK, we perform a difference-in-differences analysis comparing the price evolution of the merging parties to that of their 7 major competitors on an original sample of 196 videogames belonging to six different consoles. The results of our econometric analyses suggest that there has been a reduction in the general level of prices of both new and pre-owned games after the merger. This decline has been more marked for the merging parties, which suggests that the merger between Game and Gamestation did not lead to a substantial lessening of competition; rather it is consistent with the existence of efficiency gains.
SSRN Electronic Journal, 2000
The Journal of Law and Economics, 2007
The objective of this paper is to investigate the determinants of EU merger control decisions. We... more The objective of this paper is to investigate the determinants of EU merger control decisions. We consider a sample of 164 EU merger control decisions and evaluate the anti-competitive consequences of these mergers from the reaction of the stock market price of competitors to the merging firms. We then account for the discrepancies between the actual decisions and what the stock market would have dictated in terms of the political economy surrounding the cases. With respect to type I errors (seemingly pro-compeitive mergers that have been prohibited), our data uncovers some systematic biases but finds no support for the common claim that the Commission is being influenced by the fate of competitors at the expense of consumer interests. We also find systematic biases towards type II errors (seemingly anticompetitive mergers that are cleared), which appear to be affected by a number of institutional and political features of EU decision making. We find support for the view that anticompetitive mergers are more likely to be cleared in phase I, when it involves firms from large member states but less likely to be cleared when the relevant market is national. We also find that the fequency of errors has increased during the tenure of Commissioner Monti.
Discussion Paper Series of Sfb Tr 15 Governance and the Efficiency of Economic Systems, Oct 1, 2010
Based on a database of 326 merger cases scrutinized by the European Commission between 1990 and 2... more Based on a database of 326 merger cases scrutinized by the European Commission between 1990 and 2007, we evaluate the economic impact of the change in European merger legislation in 2004. We first propose a general framework to assess merger policy effectiveness, which is based on standard oligopoly theory and makes use of stock market reactions as an external assessment of the merger and the merger control decisions. We then focus on four different dimensions of effectiveness: 1) legal certainty; 2) frequency and determinants of type I and type II errors; 3) rent-reversion achieved by different merger policy tools; and 4) deterrence of anti-competitive mergers. To infer the economic impact of the merger policy reform, we compare the results of our four tests before and after its introduction. Our results suggest that the policy reform seems to have been only a modest improvement of European merger policy.
Strategic Organization, 2011
The strategic management literature has found it difficult to differentiate between collusive and... more The strategic management literature has found it difficult to differentiate between collusive and efficiency-based synergies in horizontal merger activity. We propose a schematic to classify mergers that yields more information on merger types and merger effects, and that can, moreover, distinguish between mergers characterized largely by collusion-based synergies and mergers characterized largely by efficiency-based synergies. Crucial to the proposed measurement procedure is that it encompasses the impact of merger events not only on merging firms -as is custom -but also on non-merging competitor firms (the rivals). Employing the event-study methodology with stock-market data on samples of large horizontal mergers drawn from the US and UK (an Anglo-Saxon sub-sample) and from the European continent, we demonstrate how the proposed schematic can better clarify the nature of merger activity.