Platform Economy and Internet Platform Monopoly

With the development of computer technology and network technology, the era of digital economy has arrived, the Internet platform economy has flourished, and a number of Internet enterprises with certain influence have emerged at home and abroad. Among them, the large Internet enterprises use their own platform's advantageous position in data, traffic and algorithms to interdepend on and influence each other, thus leading to the price of commodities not only determined by market supply and demand but more influenced by the oligarchs through some tangible or intangible ways of price leadership. Internet platform vendors take a cut from both the supply and demand side, capturing excess profits in the hands of the platform to the detriment of the majority. Internet platforms are not a place outside the law and the platform economy should operate under good market rules and market competition, while the state should also amend its anti-monopoly laws in due course to meet the needs of the market at this stage.

Oligopolistic Price Leadership and Mergers: The United States Beer Industry

We study a repeated game of price leadership in which a firm proposes supermarkups over Bertrand prices to a coalition of rivals. Supermarkups and marginal costs are recoverable from data on prices and quantities using the model’s structure. In an application to the beer industry, we find that price leadership increases profit relative to Bertrand competition by 17 percent in fiscal years 2006 and 2007, and by 22 percent in 2010 and 2011, with the change mostly due to consolidation. We simulate two mergers, which relax binding incentive compatibility constraints and increase supermarkups. These coordinated effects arise even with efficiencies that offset price increases under Bertrand competition. (JEL G34, K21, L13, L14, L41, L66)

Self-Enforcing Price Leadership

A dynamic Bertrand-duopoly model where price leadership emerges in equilibrium is developed. In the price leadership equilibrium, a firm leads price changes and its competitor always matches in the next period. The firms produce a homogeneous product and are identical except for the information they possess about demand. The market size follows a two-state Markov process. Market size realizations are observed by one of the firms but not the other. Without explicit communication, price leadership allows firms to jointly approximate monopolistic profits in equilibrium as the market size becomes more persistent provided that firms are patient. In the presence of persistent market dynamics, the informed firm’s price serves as a signal of current and therefore future market conditions. In the proposed price leadership equilibrium, the informed firm could cut prices without being detected, but it does not do so because it would lead the uninformed to also lower their price in the following period.

Strategic Pricing of Bee Products from the Ruse Region

The study reveals that in the context of global competition in supply, limited demand, and product parity in the B2B and B2C markets for bee products, there are significant limitations on the applicability of cost pricing methods (cost and desired profit) and partly of demand-based methods. In addition, the study shows that the most applicable pricing methods are the ones based on competition. Regional honey, the main product of beekeeping in the Ruse region, has a negligible differentiated value (monetary and psychological) in the B2B and B2C markets compared to its competing counterparts, due to which its price fluctuates around its market price. The lack of product differentiation, as well as established regional image and brand nowadays, do not allow producers to achieve prices higher than the market ones. Beekeeping farms in the Ruse region should build horizontal and vertical strategic relationships to gain price leadership through low costs and high quality. Value communication is necessary to protect the value and importance of regional bee products from competitors. This should be done by increasing the willingness of customers to pay a higher price for them. The pricing policy of beekeeping farms defines the general price behaviour based on the achieved differentiated value of the regional bee products and its continuous increase. The formation of regional bee products with high added value has a decisive role in the positive perception of the price by the different segments, due to which they reach higher price levels.

Price Leadership and Volatility Linkages between Oil and Renewable Energy Firms during the COVID-19 Pandemic

The COVID-19 pandemic is having a strong influence in all areas of society, like wealth, economy, travel, lifestyle habits, and, amongst many others, financial and energy markets. The influence in standard energies, like crude oil, and renewable energies markets has been twofold: from one side, the predictability of volatility has strongly decreased; secondly, the linkages of the price time series have been modified. In this paper, by using DCC-GARCH and Price Leadership Share methodology, we can investigate the changes in the influences between standard energies and renewable energies markets by analyzing one-minute time series of West Texas Intermediate crude oil futures contract (WTI), the Brent crude oil futures contract (BRENT), the STOXX Europe 600 oil & gas index (SXEV), and the European renewable energy index (ERIX). Our results confirm volatility spillover between the time series. However, when assessing the accuracy of the predictability of the DCC-GARCH model, the results show that the model fails its prediction in the period of higher instability. Besides, we found that price leadership has been strongly influenced by the virus spreading stages. These results have been obtained by dividing the period between September 2019 and January 2021 into 6 subperiods according to the pandemic stages.

Price Competition and Setup Cost

Few studies analyze the endogenous emergence of price competition in a new product market. This paper analyzes two differentiated products, an existing product and a newly introduced substitutable product, and investigates conditions under which a price competition endogenously emerges in a new product market in the context of a choice between engaging in price competition and holding price leadership. We demonstrate that Bertrand price competition emerges when the setup cost for the new product is high enough. This result implies that government policies reducing setup costs such as subsidies could change the type of competition to price leadership in a new product market.