Competition and Distortion: A Theory of Information Bias on the Peer-to-Peer Lending Market

Despite the popular emergence of peer-to-peer (P2P) lending platforms, relevant research investigating the role of these platforms on P2P markets still lags. In this paper, we present a model to study the market incentives of P2P lending platforms' optimal information-reporting strategies when the following exist: (i) uncertainty on the return of loans and (ii) competition from entrants. We focus on the information bias of platforms driven by demand-side actors—investors’ optimism/pessimism about risk—while we keep the platforms being rational. We characterize platforms' equilibrium reporting strategies under different market conditions. Surprisingly, we find that when uncertainty is significant, and the threat of entry is strong but not detrimental, the platform has incentives to bias information toward investors' biased beliefs. This result demonstrates a case where competition and uncertainty may jointly lead to information bias. However, a properly designed uncertainty-resolution mechanism could reduce the incentive. Our findings contribute to the literature on the P2P lending market by analyzing platform decisions and offer policy implications for regulating P2P lending market.

Horizontal Shareholdings and Paragraph IV Generic Entry in the U.S. Pharmaceutical Industry

The Federal Trade Commission frequently files complaints against “pay-for-delay” settlements between brand-name pharmaceutical companies and generic-drug manufacturers, the latter of which challenge the monopoly status of patent-protected drugs. I document than when the top 20 generic shareholders have more substantial financial interests in the brand, then the likelihood that the brand enters into a settlement agreement with the first generic to challenge the brand goes up. The result of such a settlement is a payment from brand to generic, in exchange for the generic’s delayed entry. Only after the first generic’s entry, a 180-day period of marketing exclusivity for that particular generic starts. Other generics can only market their drugs after that period expires. As such, the settlement between brand and the first generic extends the brand’s monopoly position. I conclude that horizontal shareholdings facilitate coordination between brand-name patent holders and generic challengers in response to the threat of entry.

Strategic determinants of development in the energy services industry

The subject of the study is a theoretical provisions and practical recommendations for the development of the energy services industry on the basis of strategic determinants. The task of the study is to analyze the determinants of the energy services industry and identify the most influential of them, which are crucial in terms of strategy formation. The methodological basis of the study was a systematic analysis, which was used to assess the energy services industry and determine its development potential. The article reveals the functions of enterprises in the energy services industry. The relationship between the development of ESCO-enterprises and the state energy efficiency policy has been established. The main stages of development of ESCO-enterprises have been identified. The dynamics of the number of ESCO-contracts and the rating of the ESCO-mechanism by regions of Ukraine are analyzed. The structure of the energy services industry from the point of view of its strategic determinants is considered: the threat of substitution, the influence of suppliers, the influence of buyers, the threat of entry of new firms and competition between existing competitors. The segments in which the energy services industry is developing have been identified and characterized: the budget sphere, the housing sphere and industry. The potential of each segment in terms of industry development has been identified. The factors restraining the development of the energy services industry are systematized. Using the market concentration ratio and the Herfindahl-Hirschman index, it was found that the energy service market is moderately concentrated. Based on the model of the main types of the market, the conformity of the quantitative and qualitative characteristics of the energy service market to the signs of monopolistic competition has been determined. According to the results of the analysis, the greatest influence of the strategic determinant «rivalry between existing competitors» was determined. Recommendations for the formation of competitive strategies of energy service enterprises are given.

Threat of Entry and Organizational-Form Choice: The Case of Franchising in Retailing

Retail expansion is led by multistore firms, which often mix two organizational forms: franchised and company-owned outlets (“franchising decisions”). The authors examine whether strategic considerations in entry and expansion play a role in organizational-form decisions (e.g., franchising) in retailing. The authors utilize store count and revenues for franchised and company-owned outlets of nationwide convenience store chains in 47 geographical markets in Japan between 1984 and 2010. The empirical analyses show that strategic considerations in entry and expansion, ignored in the literature on franchising, appear to influence an organizational-form decision: firms rely more on company-owned outlets for expansion when the threat of entry from competitor firms in adjacent markets increases. The authors examine two interpretations: the convenience of quick deployment and a credible signal. Numerical analyses of a simple dynamic model of entry and franchising confirm that company-owned-outlet-based expansion arises under heightened entry threat. The simulation analysis highlights how franchising decisions in response to an elevated threat of entry may be beneficial (or harmful) for an incumbent firm, which yields key implications for firms, consumers, and policy makers.

Analisis Struktur, Perilaku, Dan Kinerja Industri Popok Bayi Sekali Pakai Di Indonesia

The purpose of this research is to is to determine how is the structure, conduct, and performance of baby diaper industry in Indonesia. The paradigm known as Structure - Conduct - Performance (SCP) shown those three aspects are integrally related.The type of data at this research is secondary data which is collection from Badan Pusat Statistik (BPS), annual report of baby diaper industry published by Nielsen from 2012 to 2016 and literature related to this study. The research methodology applies descriptive analytical method in describing SCP of baby diaper industry in Indonesia systematically and accurately. The analysis on structure refer to elucidation on products, industry concentration ratio (CR), Herfindahl-Hirschman Index (HHI), technology, demands and market condition and ease of entry and exit (Porter Five Forces Model). The conduct analysis refer to pricing, product, distribution and promotion strategies. The performance analysis refers to industrial growth and corporate social responsibility (CSR). The result shows that the market structure is quite stable. CR4 calculation indicating oligopoly market. HHI calculation is over 2.500 representing highly concentrated exposed to high technology. Five Porter Forces showed fives strength analysis from threat of entry, power of suppliers, power of buyers, threat of substitutes and rivalry among existing competitor. Price determination, product development, strengthen distribution line, and aggressive advertising and promotion are part of the strategies. Moreover, there is high tendency of merger and supported by managerial implication. From financial perspective, mamy poko remains on top.