Monopolistic Market Research Articles

Technological catch-up, nonmonotonicity, and convergence: Parametric evidence from the BRICS and European banking systems

IT-driven productivity growth offers banks an intriguing opportunity to differentiate their offerings in a monopolistic market, introduce attractive products, enhance customer service, streamline back-office processes, and ultimately achieve the twin goals of cost minimization and profit maximization. However, there has been no convincing explanation for the observed divergence in the IT-productivity literature, raising doubts about whether IT can significantly improve performance in contemporary banking markets. The article examines the role of IT-led productivity growth in governing the direction and magnitude of intra-industry and inter-country convergence by investigating the potential nonmonotonicity of IT in influencing frontier-based efficiency of the BRICS and European banking markets. Findings reveal U-shaped associations between IT and cost (profit) efficiency, suggesting that excessive investment in IT may explain the productivity conundrum for BRICS nations. IT capital is not a significant driver of cost efficiency for European nations. Nevertheless, R&D spending significantly influences frontier efficiency, reinforcing that European banks can achieve frontier-level performance by investing in innovative solutions. Inter-regional comparisons reveal that BRICS banks are converging with their European counterparts by leveraging IT solutions, while diminishing marginal benefits for the latter reinforces the presence of a catch-up effect. Intra-industry comparisons reveal that size, age, and R&D intensity drive technological catch-up and convergence.

Preemptive patenting, secondary patents, and the persistence of monopoly

AbstractWe develop a theoretical economic model that establishes the link between fragmented patenting systems in an industry already characterized as a monopoly resulting in continuous/steady monopolistic market structure. We demonstrated that preemptive patenting strategy, by using secondary patenting scheme, may lead to an increase in the number of patents without changing actual number of products on the market. Moreover, when such a strategy is employed by a monopoly, it only serves to sustain and further monopolistic and therefore socially suboptimal market structure. Institutional/legal framework must exist to promote this kind of socially suboptimal behavior and resulting outcomes.

한·튀르키예 경제협력 확대 방안에 관한 연구

Purpose - Despite friendly diplomatic relations between Korea and Turkey, relatively little attention has been paid to economic cooperation. This research aims to find ways to expand future-oriented economic cooperation between the two countries based on the demand for cooperation in each industry.
 Design/Methodology/Approach - In order to examine the possibility of cooperation with Turkey, the industrial structure of Turkey and related policies of were analyzed. In addition, the current status and direction of each industry in Turkey, along with foreign economic cooperation in Turkey, including Korea, were examined.
 Findings - First, technology compatibility and standardization can be realized by participating as a collaboration partner from the infrastructure establishment stage of the industry fostered by the Turkish government. Second, it is necessary to expand cooperation targets to state-owned enterprises and local conglomerates with monopolistic market power. Third, it is necessary to diversify cooperation methods by industry and growth stage because there is a large difference in the degree of development of each industry in Turkey.
 Research Implications - In order to deepen Korea-Turkey economic cooperation, it is essential to respond promptly to the actual demands for cooperation in each industry. However, since it is difficult to identify such demands at the level of individual companies, a cooperation system involving government departments, relevant public organizations, and major companies in each industry of the two countries needs to be built.

The role of the actors in the trade network structure of fishing products: The case of the shark market

In this paper we study the influence of the structure of relationships in the commercial network of fishery products in the economic performance and profits distribution among actors, taking the shark market in Mexico as a case study. For this, fishermen, permit holders and traders were interviewed in the local, regional and main markets for shark products in Mexico. With the information obtained, a weighted network of the shark market was built, the main centrality indices and the monetary contribution of each actor to the commercial system in terms of economic profits were calculated. Through a stepwise multiple regression analysis, the variables that positively affect economic profits were identified. Our results show that shark fin exporters obtain the highest net unitary profits, while traders of shark meat and fillet presented the highest net profits. The organization of the actors (type), the quantity traded (Kg), the out-degree and out-closeness are the variables that positively affect the economic performance of the shark market. These findings agree with standard economic networks theory about the consequences of competitive and monopolistic market structure on the distribution of the economic returns of the food commercialization. The quantitative analysis of weighted networks in the trade of shark products gives rise to new insights to understand how economic profits are generated and distributed in a commercial system and how the actors involved are favored by said activity.

Global Digital Lords and Privatisation of Media Policy: The Australian Media Bargaining Code

After two decades of regulatory vacuum, powerful digital platforms such as Google and Meta/Facebook, also known as the “Digital Lords” (Brevini 2020), have faced growing criticism worldwide. They are accused of possessing excessive economic, political, and ideological influence while evading public accountability. Although there have been calls to address their monopolistic market dominance, such as antitrust measures to break their stranglehold on data, the most tangible interventions have focused on policy tools to make the Digital Lords contribute to journalism. With governments hesitant to allocate public funds for public interest journalism, policymakers in various countries are exploring avenues to make these wealthy and tax-avoiding Digital Lords pay for the news they distribute. The “Journalism Competition and Preservation Act” is presently being deliberated in Congress in the United States, with the objective of aiding small and mid-sized news organizations in their negotiations with digital platforms for fair compensation for the utilization of their content. The European Union has implemented a copyright reform granting press publishers the right to be remunerated by Digital Lords for the use of newspapers and magazines. One widely discussed policy tool in this regard is the Australian “News Media Bargaining Code.” This article examines the successes and failures of the code, adopted a year and a half ago, in addressing Australia's journalism crisis and its pressing issues of media diversity and news scarcity. Ultimately, it argues that the Australian Media Bargaining Code exemplifies the progressive privatization of media policy.

How does market competition affect supplier-induced demand? An experimental study.

This study investigated the impact of competition on supplier-induced demand in medical markets theoretically and experimentally. We employed the framework of credence goods to describe the information asymmetry between physicians and patients, and theoretically derives predictions of physicians' behaviors in monopolistic and competitive markets. Then we conducted behavioral experiments to empirically test the hypotheses. The theoretical analysis revealed that an honest equilibrium would not exist in a monopolistic market, whereas price competition could induce physicians to reveal their types of treatment cost and provide honest treatments; thus, a competitive equilibrium is superior to that of a monopolistic market. The experimental results only partially supported the theoretical predictions, which showed that the cure rate of patients in a competitive environment was higher than that in a monopolistic market, although supplier-induced demand occurred more frequently. In the experiment, the main channel through which competition improved market efficiency was increased patient consultations through low pricing, as opposed to the theory, which stated that competition would lead to physicians' honest treatment of patients through fair prices. We discovered that the divergence between the theory and the experiment stemmed from the theory's reliance on the assumption that humans are rational and self-interested, which means that they are not as price-sensitive as predicted by theory.

Supply chain operations with online platform: Impacts of online reviews and manufacturer competition

In an e-commerce market dominated by online platforms, as an important means of disseminating product information, online reviews play a significant role in influencing consumer-purchasing behavior. To study the influence of online reviews on supply chain decisions, this paper establishes a supply chain game composed of manufacturers and online platforms in a monopolistic market of manufacturers and a competitive market of manufacturers, respectively. In the monopolistic market of manufacturers, online reviews correct consumer-perceived quality. In the competitive market of manufacturers, online reviews correct consumer-perceived quality and then increase the level of competition between manufacturers. The results show that: (1) The influence of online reviews depends on the size of the value of online reviews. In the monopolistic market of manufacturers, the value of online reviews, if high enough, increases the profit and demand of the supply chain. On the other hand, a sufficiently small value of online reviews reduces the profit and demand of the supply chain. Whereas in the competitive market of manufacturers, online reviews change the level of competition. The manufacturer makes a profit only if the value of his online review is sufficiently higher than that of his competitor. For the online platform, online reviews will always increase her profit as long as the values of online reviews of both products are not too small at the same time. (2) Without online reviews, competition between manufacturers reduces the profit of the incumbent manufacturer. With online reviews, competition between manufacturers reduces the profit of the incumbent manufacturer while increasing the supply chain’s total profit and the online platform’s profit.

Fossil resource market power and capital markets

Supplying a crucial exhaustible resource to the world market induces profound repercussions in the capital markets. Employing a two-country model with international trade, we examine how a resource-rich country with monopolistic market power accounts for this interplay with the capital market in its extraction decision over time. We investigate new supply motives resulting from the general-equilibrium feedbacks and from capital asset holdings of the resource-rich country. Recognizing the influence of resource supply on capital returns can lead the resource monopolist to accelerate or postpone extraction while the influence on capital accumulation poses an incentive to accelerate extraction and to exploit the importers’ increased future resource dependence. Overall, in the reference calibration, the conventional conservationist bias of resource market power is reversed. The general-equilibrium supply motives substantially alter the resource monopolist’s reaction to more competitive capital-intensive resource substitutes, demonstrating the relevance of our observations for future technological change. Similarly, these supply motives may reverse the effects of a future tax on the exporting countries’ asset holdings.

APPLICATION OF MULTI-AGENT SYSTEMS IN ELECTRICITY MARKET SIMULATORS

Since the liberalization and deregulation of the electricity markets throughout the world are in full swing, the number of market participants, as well as their diversity, is sharply increasing. In the traditional monopolistic market model, all the processes that occur in a power system have been supervised by vertically integrated companies. Since market logic is changing from that oriented toward minimizing generation costs for electrical energy to the trend of maximizing profit, the risk is being distributed among all the market participants uniformly and is no longer entirely borne by the final consumers. Under such uncertain conditions, in which the prices of electrical energy change from hour to hour, each market participant wants a reliable tool to facilitate optimal and quality decisions and strategic performance.

Transition from a monopolistic market to natural gas competition: The Balancing Rules

Transition from a monopolistic market to natural gas competition: The Balancing Rules

Is Education Beneficial to Environmentally Friendly Behaviors? Evidence from CEOs.

Corporate environmental investment decisions play a crucial role in the protection of the public environment. As the decision-maker and executor, the environmental consciousness and social responsibility of the chief executive officer (CEO) has a long-term impact on the company’s environmental protection strategy, and the CEO’s level of education is a significant factor influencing the CEO’s environmental protection decisions. In this paper, we investigate the extent to which CEO education influences environmental protection investment decisions. A CEO education index is constructed as a proxy for CEO education based on the CEO’s educational background, using a panel sample of Chinese listed firms from 2010 to 2019 and providing robust evidence supporting the notioin that firms with highly educated CEOs are likely to engage in environmental protection spending activities. However, the positive relationship between CEO education and corporate environmental protection investment is reduced when the CEO also holds the position of chairman. The heterogeneity analysis shows that the positive relationship between CEO education and corporate environmental investment behavior is stronger in non-manufacturing and highly monopolistic market competitive industries. Our study contributes to the sustainability literature by providing a new impetus for corporate environmental activities from the perspective of CEO education and sheds light on the impact of the internal and external factors of firms on the investment in environmental protection. It may also help decision makers to decide whether to hire highly educated CEOs and use a dual structure of CEOs in markets with different levels of competition.

The leverage effect of bundling on monopoly power and product quality

AbstractThis paper re‐examines the leverage effect of bundling under vertical quality differentiation. That is, it studies whether or not the firm can still extend its monopoly power from the monopolist product market to the competing product market by bundling under vertical product quality differentiation. There is an intangible product (such as cloud storage, after sale service, etc.) in a bundled package with vertical quality differentiation. The model herein enables us to further analyze the effects of bundling on a competitor's profit, consumer surplus, and social welfare when the bundler is a high‐ or low‐quality firm and is facing a single‐product competitor. When the bundling product is a high quality product, bundling reinforces the monopolist's market power toward the monopoly good, which runs opposite from the traditional leverage effect. If bundling enhances (shortens) the quality difference in competing goods, then bundling increases (reduces) both the competitor's profit and social welfare, whereas it decreases (increases) consumer surplus. Contrary to traditional literature, we find that mixed bundling may not be superior to pure bundling and the price discrimination via mixed bundling by the multi‐product firm may enhance the consumer surplus.

The Efficiency of Indonesian Commercial Banks: Does the Banking Industry Competition Matter?

This study examines the effect of banking industry competition on the efficiency of commercial banks in Indonesia from 2010 to 2019. First, using data envelopment analysis (DEA), the results showed that the commercial banks in Indonesia are moderately efficient. Second, this study uses H-statistics, obtained through the Panzar–Rosse model, to measure the level of competition. The results showed that the banking industry competition in Indonesia is a monopolistic market. In addition, this study also analysed other factors affecting bank efficiency, namely non-performing loans (NPL), loan to deposit ratio (LDR), capital adequacy ratio (CAR), bank size, and economic growth. This study used the Tobit estimation method to analyse the effect of competition and other variables. The results showed that tighter competition in the banking industry reduces the commercial banks’ efficiency. The results of this study support the competition-inefficiency hypothesis. Other variables such as CAR, LDR, and economic growth had a significant effect on bank efficiency. Meanwhile, the NPL variable and bank size had no significant effect.

Heuristic pricing rules not requiring knowledge of the price response function

Heuristic rules are appropriate, if a decision maker wants to set the price of a new product or of a product, whose past price variation is low, and budget limitations prevent the use of marketing experiments or customer surveys. Whereas such rules are not guaranteed to provide the optimal price, generated profits should be as close as possible to their optimal values. We investigate eleven pricing rules that do not require that a decision maker knows the price response function and its parameters. We consider monopolistic market situations, in which sales depend on the price of the respective product only. A Monte Carlo simulation that is more comprehensive than extant attempts found in the literature, serves to evaluate these rules. The best performing rules either hold price changes between periods constant or make them dependent on the previous absolute price difference. These rules also outperform purely random price setting, which we use as benchmark. On the other hand, rules based on arc elasticities or on a loglinear approximation to sales and prices, turn out to be even worse than random price setting. In the conclusion, we discuss how heuristic pricing rules may be extended to deal with product line pricing, additional marketing variables (e.g., advertising, sales promotion, and sales force) and a duopolistic market situation.

Industry Market Structure and Banking Performance in Indonesia

After the economic crisis, Indonesian banks began to compile the Indonesian Banking Architecture to design the Indonesian banking system. Banks mostly have a motive to increase their market share by increasing the amount of third-party funds and the amount of credit extended, thus changing the character of the banking market structure in Indonesia. This research measures the effect of performance as reflected in the level of bank profitability in relation to the market structure by assuming that these conditions are influenced by internal (Asset Liability Management) and market factors. Bank market concentration is measured by the Herfindahl-Hirschman Index. This research concludes that the Indonesian banking industry has a monopolistic market structure. The effect of bank market concentration, capital ratio, and liquidity ratio are positive and significant on bank performance. Conversely, the credit risk ratio has a negative effect on banking performance. Received: 31 August 2021 / Accepted: 11 February 2022 / Published: 5 March 2022

Competition and Market Contestability in Ghanaian banking industry: A Panzar-Rosse Approach

The present study evaluates the market structure of Ghana’s banking industry and estimates the nature and degree of competition. This study uses non-structural methodology proposed by Panzar-Rosse Model known as “H-statistic” to empirically assess competitiveness in the Ghanaian banking market. The study uses 23 banks in Ghana from 2000 to 2019, compiled and reported by Ghana Association of Bankers (GAB). The study results show that banks in Ghana derive their revenue in conditions of monopolistic competition. Thus, Contestable markets theory and Chamberlainian competition theory are validated by the study results. Furthermore, the study results revealed that from 2000 to 2019, after various structural reforms including the implementation of the FINSAP, competition in the Ghanaian banking sector increased. Finally, when the dataset was decomposed into local and foreign banks, the results indicate that monopolistic competition market conditions are found for both local and foreign banks. Managerially, the presence of a monopolistic market condition adds to the call for managers of the banks to consider factor input prices in an attempt to generate more revenues. Second, to avoid negative consequences of competition, managers of these banks should not rely on a single income source but also indulge in non-intermediation activities. In terms of policy, pro-structural shift policies that have helped with the transition from a monopoly structure to a monopolistic competition free entry or contestable market structure should be rigorously pursued by the policymakers. Besides, policy directives that enhance greater consolidation in the banking sector shouldbe pursued rigorously. Finally, the results from this study could help policy-makers to fashion an appropriate optimal intervention and stability policies geared towards enhancing banking stability at different levels of bank competition.

ANALISIS SRATEGI PEMASARAN GUNA PENGEMBANGAN USAHA UMKM KERUPUK MERAH JATI DENGAN MENGGUNAKAN SWOT

AbstractRed Jati crackers UMKM as a producer that produces red crackers. Reliable strength. Red Jati crackers have an advantage in terms of price, but need improvements in terms of packaging made as attractive as possible so that consumers are more interested and add to the selling value. The weaknesses that are owned by Red Jati Crackers are: first, they do not have a typical company so that the company will experience a financial crisis (decline) if the company is affected by the dropping or falling world economy and secondly does not use promotional or advertising services, both visual and non-visual. The biggest opportunity that Red Jati Crackers can get is to dominate the monopolistic market. The biggest threat faced by Red Jati Crackers is the purchasing power of consumers. SWOT analysis of IFAS (Intermal Factors Analysis Summary) material factors Total score of 2.32 Strength (Strength) while Weakness (Weakness) total score of 0.76. The total score is all 3.08. EFAS External Factors (External Factors Analysis Summary) Opportunities total score of 2.14 while Threat (Threat) total score of 0.45. The total score is 2.59 in all. Red Jati crackers are in a development position (Growth) with the SO (S) Strategy to increase Strength (O) to achieve the goal.
 Keywords: SWOT, Strengths, Weaknesses, Opportunities, Threats, Marketing Strategy, SWOT Matrik.

Modeling the Behavior of Banks in Instability Conditions

The analysis of models of activity of banking structures in the conditions of perfect and imperfect competition is carried out. Production functions for financial companies are considered. Models of the bank's work as an institution of delegated monitoring are described. Models of dynamics of financial resources are analyzed, allow to describe processes of evolution of own capital of bank depending on dynamics of the involved resources and the policy of accumulation realized by it. The considered models and methods are based on the definition of a bank (a financial company) as some abstract object, which is characterized by input and output parameters, as well as the function that connects them. This approach to some extent allows adapting traditional models of research of industrial enterprises and organizations to the analysis of the activities of banking structures. Therefore, one of the main tasks is to optimize internal functioning. Under such conditions, it is especially important to consider the bank as a holistic complex dynamic system operating in an unstable transition economy and the use of economic and mathematical methods and models to study the processes taking place in the bank, assess its effectiveness, identify areas and ways to improve management banking activities. Based on the analysis of the main economic and mathematical models of behavior of financial companies in a monopolistic market, we can conclude that each model characterizes a certain aspect of financial market development by the situation. Production functions for a bank (financial firm) are built, where the problem of classification of these factors into input and output is significant. A wide class of economic and mathematical models is considered, in which the activity of financial and banking institutions is treated as financial intermediaries. The theory of delegated monitoring is generalized, which in the general case assumes that in conditions when there is an effect of the growth of income from scale, individual lenders prefer to delegate functions of control (monitoring) of the behavior of entrepreneurs in whose projects they have invested to special intermediary firms. banks. The analysis of the development of the banking sector of Ukraine showed that a further gradual slowdown in its pace is expected due to changes in conditions in global financial markets and market saturation.

Patients' free choice of physicians is not always good.

We present a model of learning in healthcare markets. Hospitals have junior physicians with low and senior physicians with high ability. Junior physicians turn senior if they treat enough patients. Patients face heterogeneous costs for waiting if a physician's capacity is utilized. Hospitals choose to either allocate patients to physicians randomly or let patients choose their physicians. In a monopolistic market, the hospital always chooses the welfare‐maximizing allocation system. In a competitive market, inefficiencies may arise due to two externalities. If patients are free to choose their physician, the marginal patient neither internalizes her impact on other patients' waiting costs nor the learning of junior physicians.

Measurement of Competitiveness and Market Concentration of Indonesian Banking Sharia

This study aims: (1) The extent of competitiveness of sharia banking in Indonesia's current economic development; (2) How far the strength of the sharia banking market in Indonesia today. The research conducted to measure the competitiveness of sharia banking in Indonesia and market forces encountered, using the observation period 2010-2016, and the data used is time series and cross section data. The research design used in research is quantitative research, by using model Lerner Index, PR-H Statistics Model, and multiple regression. Based on the results of the study, 1. Using the Lerner index model, for 10 Indonesian sharia banks, especially murabahah products with observation period 2010 - 2016, shows that the competitiveness of Indonesian sharia banks is still very low. The Lerner index for each sharia banks with competitiveness of murabahah products is Bank Mega Sharia, Bank BRI Sharia, Maybank and BSM. As for other sharia banks is still very low; 2. The measurement of market forces using the PR-H Statistics model, murabahah products of Indonesian sharia banks during 2010-2016 fall into the category of the monopolistic competition market. This indicates that, the murabahah product of each sharia banks is basically almost the same, only slightly differentiated by the deficited products in such a way between one bank and another bank; 3. Regression result model of factors affecting competitiveness, only ROA variable that influence to competitiveness, it shows that ROE variable, capitalization and efficiency not become determinant of competitiveness of a bank, especially for murabahah product.