Michael Waterson - Academia.edu (original) (raw)
Papers by Michael Waterson
There are continued complaints on matters of event ticketing, particularly in music, despite rece... more There are continued complaints on matters of event ticketing, particularly in music, despite recent changes in legislation and in practice. This report, a development of ideas following from Waterson (2016), sets out a personal view on the market, focusing on the UK and in particular the music sector, as it now exists. In it, I ask and respond to a self-imposed question- what might an improved ticketing system set out to achieve? In my view, a desirable ticketing system would be one that puts consumers first, both in terms of ease, fairness and choice. Hence the title. Currently, many of the participants in the market do not have consumers foremost in mind, and the lesson from various other markets where technology has shown significant potential is that ultimately, a framework that provides what (most) consumers want wins out.
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SSRN Electronic Journal, 2015
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New Perspectives on Industrial Policy for a Modern Britain, 2015
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The Journal of Industrial Economics, 1991
... Page 2. 446 JOHN VICKERS AND MICHAEL WATERSON to restraints involving price is generally grea... more ... Page 2. 446 JOHN VICKERS AND MICHAEL WATERSON to restraints involving price is generally greater than to non-price restraints. ... between vertical integration (including merger) and vertical restraints (including exclusive dealing, refusal to supply, resale price maintenance ...
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Journal of Agricultural Economics, 2003
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The Bloomsbury Handbook of Popular Music Policy, 2022
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International Journal of Industrial Organization, 1992
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SSRN Electronic Journal, 2016
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International Journal of Industrial Organization, 1994
© 1993 Massachusetts Institute of Technology All rights reserved. No part of this book may be rep... more © 1993 Massachusetts Institute of Technology All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the ...
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This paper studies consumer search and pricing behaviour in the British domestic electricity mark... more This paper studies consumer search and pricing behaviour in the British domestic electricity market following its opening to competition in 1999. We develop a sequential search model in which an incumbent and an entrant group compete for consumers who find it costly to obtain information on prices other than from their current supplier. We use a large data set on prices and input costs to structurally estimate the model. Our estimates indicate that consumer search costs must be relatively high in order to rationalize observed pricing patterns. We confront our estimates with observed switching behaviour and find they match well.
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Revised version This paper studies consumer search and pricing behavior in the British domestic e... more Revised version This paper studies consumer search and pricing behavior in the British domestic electricity market following its opening to competition in 1999. We develop a sequential search model in which an incumbent and an entrant group compete for consumers who find it costly to obtain information on prices other than from their current supplier. We use a large data set on prices and input costs to structurally estimate the model. Our estimates indicate that consumer search costs must be relatively high in order to rationalize observed pricing patterns. We confront our estimates with observed switching behavior and find they match well.
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The RAND Journal of Economics, 2001
We study the effects of market structure on entry using data from the U.K. fast food (counter-ser... more We study the effects of market structure on entry using data from the U.K. fast food (counter-service burger) industry over the years 1991--1995, for which the market can be characterized as a duopoly. We use both reduced-form estimations and a structural model, controlling for market-specific time-invariant unobservables. For both firms, we find that market structure matters greatly. Specifically, rival presence increases the probability of entry by increasing expected market size, whereas variable profits per customer are increasing in the number of own outlets. Our results suggest the presence of product differentiation, firm learning, and market power.
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This paper examines how the frequency and magnitude of micro price rises and falls relate to macr... more This paper examines how the frequency and magnitude of micro price rises and falls relate to macroeconomic crisis, as well as moderation. Weekly micro pricing behaviour in groceries, Britain's most important consumer market, is investigated for 370 precisely defined products matched across the leading three retailers over the moderation period 2004-7 and the crisis period 2008-10. We find significant price flexibility of a form sharply distinguished from behaviour observed in most previous work. Downward price flexibility increases markedly in 2008. Overall basket prices rise, but significantly more individual prices fall than rise in the latter period. This is consistent with retailers obscuring the fact of rising basket prices in order to push cost increases through into price rises. Tests of obfuscation in price setting suggest the large numbers of small price falls were used to disguise price rises. Thank you very much for your very positive response to us on our revised pap...
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We investigate the London bus market, a large market with regular procurement of bus services, fo... more We investigate the London bus market, a large market with regular procurement of bus services, for possible collusion using a wide variety of techniques, making use of the data at our disposal. There is little evidence of collusion in bidding for contracts apparent from our data, despite some features of the market that might lead to collusive behaviour.
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In this paper we study whether learning from rivals affects within-market location decisions betw... more In this paper we study whether learning from rivals affects within-market location decisions between competing firms. We show it does, using detailed locational data from two leading hamburger chains in the UK. Using four different tests, we demonstrate that alternative explanations – pre-emption and product differentiation – have less bite than between firm learning. * Sault and WatersonDepartment of Economics, University of Warwick, Coventry CV4 7AL, UK; ToivanenHelsinki School of Economics, PO Box 1210, 00101 Helsinki, Finland, and department of economics, University of California, Berkeley. Email correspondence should be addressed to michael.waterson@warwick.ac.uk. We are grateful for the very helpful comments received during presentations at various stages in the paper’s construction, including seminars at Essex, LSE and Warwick, at the AEA annual meeting in Washington, 2003, and EARIE in Helsinki, 2003. In particular, we thank Michael Mazzeo, Peter Davis, Tobias Kretzmer, Paul...
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We start the survey by reviewing the implications of horizontal and vertical product differentiat... more We start the survey by reviewing the implications of horizontal and vertical product differentiation on market structure under the assumption of single-product firms. Then, we analyse the main results of the multi-product firm models, both when variants are assumed differentiated in vertical attributes only and when variants are assumed differentiated in two dimensions (vertical and horizontal). Finally, we review the empirical literature about discrete-choice models of product differentiation.
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Chain-stores now dominate most areas of retailing. While retailers may operate nationally or even... more Chain-stores now dominate most areas of retailing. While retailers may operate nationally or even internationally, the markets they compete in are largely local. How should they best operate pricing policy in respect of the different markets served - price uniformly across the local markets or on a local basis according to market conditions? We model this by allowing local market differences, with entry being inevitable in certain markets while being naturally or institutionally blockaded in others. We show that practising price discrimination is not always best for the chain-store. Competitive conditions exist under which uniform pricing can raise profits.
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This paper takes a case study approach to analyse the evolution of competition in the market for ... more This paper takes a case study approach to analyse the evolution of competition in the market for local bus services in London. With the aid of a public dataset made available by Transport for London, the paper makes a preliminary assessment of whether competition is being maintained over time and what factors are determining its alleged success.
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Developments in information gathering and processing have led to considerable interest in microma... more Developments in information gathering and processing have led to considerable interest in micromarketing. In the quest for increased profits, managers of retail chains may be attracted to the idea of customizing prices to the store level according to local demand and competitive conditions. For example, if chain stores face lower demand and/or more competition in some locations than others, it may be tempting to price lower in those areas. However, we show generally and illustrate through means of a specific model that there is a strategic incentive to soften competition by committing not to customize prices at the store level and instead adopt uniform pricing across the store network. Moreover, for a range of parameter values that we characterize, this incentive is sufficiently strong to allow for higher profits to be achieved under uniform pricing rather than local pricing. We also show that the strategic incentive is enhanced when all firms in the industry agree (or are obliged b...
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One of the phenomena of the twentieth century, chainstores, are remarkably little studied by econ... more One of the phenomena of the twentieth century, chainstores, are remarkably little studied by economists. Amongst open questions are the following: What factors influence the pattern of their openings? Does the spread of one constrain others having broadly the same retail offer? Do they locate close to competitors? To answer such questions, one must examine a time path of development- put simply one must observe actual entry. This is precisely what is done in a series of papers (Toivanen and Waterson, 2000; 2001; Sault, Toivanen and Waterson -hereafter STW, 2002; forthcoming) we are working on concerning the spread of restaurant outlets in the UK. This paper sketches the main elements of our program, then examines a particular issue, the micro-geography of location, in detail.
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There are continued complaints on matters of event ticketing, particularly in music, despite rece... more There are continued complaints on matters of event ticketing, particularly in music, despite recent changes in legislation and in practice. This report, a development of ideas following from Waterson (2016), sets out a personal view on the market, focusing on the UK and in particular the music sector, as it now exists. In it, I ask and respond to a self-imposed question- what might an improved ticketing system set out to achieve? In my view, a desirable ticketing system would be one that puts consumers first, both in terms of ease, fairness and choice. Hence the title. Currently, many of the participants in the market do not have consumers foremost in mind, and the lesson from various other markets where technology has shown significant potential is that ultimately, a framework that provides what (most) consumers want wins out.
Bookmarks Related papers MentionsView impact
SSRN Electronic Journal, 2015
Bookmarks Related papers MentionsView impact
New Perspectives on Industrial Policy for a Modern Britain, 2015
Bookmarks Related papers MentionsView impact
The Journal of Industrial Economics, 1991
... Page 2. 446 JOHN VICKERS AND MICHAEL WATERSON to restraints involving price is generally grea... more ... Page 2. 446 JOHN VICKERS AND MICHAEL WATERSON to restraints involving price is generally greater than to non-price restraints. ... between vertical integration (including merger) and vertical restraints (including exclusive dealing, refusal to supply, resale price maintenance ...
Bookmarks Related papers MentionsView impact
Journal of Agricultural Economics, 2003
Bookmarks Related papers MentionsView impact
The Bloomsbury Handbook of Popular Music Policy, 2022
Bookmarks Related papers MentionsView impact
International Journal of Industrial Organization, 1992
Bookmarks Related papers MentionsView impact
SSRN Electronic Journal, 2016
Bookmarks Related papers MentionsView impact
International Journal of Industrial Organization, 1994
© 1993 Massachusetts Institute of Technology All rights reserved. No part of this book may be rep... more © 1993 Massachusetts Institute of Technology All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the ...
Bookmarks Related papers MentionsView impact
This paper studies consumer search and pricing behaviour in the British domestic electricity mark... more This paper studies consumer search and pricing behaviour in the British domestic electricity market following its opening to competition in 1999. We develop a sequential search model in which an incumbent and an entrant group compete for consumers who find it costly to obtain information on prices other than from their current supplier. We use a large data set on prices and input costs to structurally estimate the model. Our estimates indicate that consumer search costs must be relatively high in order to rationalize observed pricing patterns. We confront our estimates with observed switching behaviour and find they match well.
Bookmarks Related papers MentionsView impact
Revised version This paper studies consumer search and pricing behavior in the British domestic e... more Revised version This paper studies consumer search and pricing behavior in the British domestic electricity market following its opening to competition in 1999. We develop a sequential search model in which an incumbent and an entrant group compete for consumers who find it costly to obtain information on prices other than from their current supplier. We use a large data set on prices and input costs to structurally estimate the model. Our estimates indicate that consumer search costs must be relatively high in order to rationalize observed pricing patterns. We confront our estimates with observed switching behavior and find they match well.
Bookmarks Related papers MentionsView impact
The RAND Journal of Economics, 2001
We study the effects of market structure on entry using data from the U.K. fast food (counter-ser... more We study the effects of market structure on entry using data from the U.K. fast food (counter-service burger) industry over the years 1991--1995, for which the market can be characterized as a duopoly. We use both reduced-form estimations and a structural model, controlling for market-specific time-invariant unobservables. For both firms, we find that market structure matters greatly. Specifically, rival presence increases the probability of entry by increasing expected market size, whereas variable profits per customer are increasing in the number of own outlets. Our results suggest the presence of product differentiation, firm learning, and market power.
Bookmarks Related papers MentionsView impact
This paper examines how the frequency and magnitude of micro price rises and falls relate to macr... more This paper examines how the frequency and magnitude of micro price rises and falls relate to macroeconomic crisis, as well as moderation. Weekly micro pricing behaviour in groceries, Britain's most important consumer market, is investigated for 370 precisely defined products matched across the leading three retailers over the moderation period 2004-7 and the crisis period 2008-10. We find significant price flexibility of a form sharply distinguished from behaviour observed in most previous work. Downward price flexibility increases markedly in 2008. Overall basket prices rise, but significantly more individual prices fall than rise in the latter period. This is consistent with retailers obscuring the fact of rising basket prices in order to push cost increases through into price rises. Tests of obfuscation in price setting suggest the large numbers of small price falls were used to disguise price rises. Thank you very much for your very positive response to us on our revised pap...
Bookmarks Related papers MentionsView impact
We investigate the London bus market, a large market with regular procurement of bus services, fo... more We investigate the London bus market, a large market with regular procurement of bus services, for possible collusion using a wide variety of techniques, making use of the data at our disposal. There is little evidence of collusion in bidding for contracts apparent from our data, despite some features of the market that might lead to collusive behaviour.
Bookmarks Related papers MentionsView impact
In this paper we study whether learning from rivals affects within-market location decisions betw... more In this paper we study whether learning from rivals affects within-market location decisions between competing firms. We show it does, using detailed locational data from two leading hamburger chains in the UK. Using four different tests, we demonstrate that alternative explanations – pre-emption and product differentiation – have less bite than between firm learning. * Sault and WatersonDepartment of Economics, University of Warwick, Coventry CV4 7AL, UK; ToivanenHelsinki School of Economics, PO Box 1210, 00101 Helsinki, Finland, and department of economics, University of California, Berkeley. Email correspondence should be addressed to michael.waterson@warwick.ac.uk. We are grateful for the very helpful comments received during presentations at various stages in the paper’s construction, including seminars at Essex, LSE and Warwick, at the AEA annual meeting in Washington, 2003, and EARIE in Helsinki, 2003. In particular, we thank Michael Mazzeo, Peter Davis, Tobias Kretzmer, Paul...
Bookmarks Related papers MentionsView impact
We start the survey by reviewing the implications of horizontal and vertical product differentiat... more We start the survey by reviewing the implications of horizontal and vertical product differentiation on market structure under the assumption of single-product firms. Then, we analyse the main results of the multi-product firm models, both when variants are assumed differentiated in vertical attributes only and when variants are assumed differentiated in two dimensions (vertical and horizontal). Finally, we review the empirical literature about discrete-choice models of product differentiation.
Bookmarks Related papers MentionsView impact
Chain-stores now dominate most areas of retailing. While retailers may operate nationally or even... more Chain-stores now dominate most areas of retailing. While retailers may operate nationally or even internationally, the markets they compete in are largely local. How should they best operate pricing policy in respect of the different markets served - price uniformly across the local markets or on a local basis according to market conditions? We model this by allowing local market differences, with entry being inevitable in certain markets while being naturally or institutionally blockaded in others. We show that practising price discrimination is not always best for the chain-store. Competitive conditions exist under which uniform pricing can raise profits.
Bookmarks Related papers MentionsView impact
This paper takes a case study approach to analyse the evolution of competition in the market for ... more This paper takes a case study approach to analyse the evolution of competition in the market for local bus services in London. With the aid of a public dataset made available by Transport for London, the paper makes a preliminary assessment of whether competition is being maintained over time and what factors are determining its alleged success.
Bookmarks Related papers MentionsView impact
Developments in information gathering and processing have led to considerable interest in microma... more Developments in information gathering and processing have led to considerable interest in micromarketing. In the quest for increased profits, managers of retail chains may be attracted to the idea of customizing prices to the store level according to local demand and competitive conditions. For example, if chain stores face lower demand and/or more competition in some locations than others, it may be tempting to price lower in those areas. However, we show generally and illustrate through means of a specific model that there is a strategic incentive to soften competition by committing not to customize prices at the store level and instead adopt uniform pricing across the store network. Moreover, for a range of parameter values that we characterize, this incentive is sufficiently strong to allow for higher profits to be achieved under uniform pricing rather than local pricing. We also show that the strategic incentive is enhanced when all firms in the industry agree (or are obliged b...
Bookmarks Related papers MentionsView impact
One of the phenomena of the twentieth century, chainstores, are remarkably little studied by econ... more One of the phenomena of the twentieth century, chainstores, are remarkably little studied by economists. Amongst open questions are the following: What factors influence the pattern of their openings? Does the spread of one constrain others having broadly the same retail offer? Do they locate close to competitors? To answer such questions, one must examine a time path of development- put simply one must observe actual entry. This is precisely what is done in a series of papers (Toivanen and Waterson, 2000; 2001; Sault, Toivanen and Waterson -hereafter STW, 2002; forthcoming) we are working on concerning the spread of restaurant outlets in the UK. This paper sketches the main elements of our program, then examines a particular issue, the micro-geography of location, in detail.
Bookmarks Related papers MentionsView impact