Private banks often blame state guarantees to distort competition by giving public banks the advantage of lower funding costs. In this paper I show that if borrowers perceive the public bank as supporting economic development, private banks may be able to separate firms by self selection, enter the market, and obtain profits in equilibrium despite their cost disadvantage. The public bank’s comp...

Foreign direct investment (FDI) brings host countries capital, productive facilities, and technology transfers, as well as new jobs and management expertise. Thus, it is important to understand the basic reasons for FDI inflow and make clear what gains from FDI are. In the present paper, based on theoretical findings we formulate clear message stating that inflow of FDI does not need to be expl...

We develop spatial competition a la Bertrand for barge shipping along a waterway. Equilibrium prices are derived for two variations. For each case, we …rst give the perfectly competitive benchmark (when all modes are priced at marginal cost) before introducing market power on the modes. The paper emphasizes strategic rivalry (and market power) in two dimensions, and, for tractability, we consid...

The imposed commission ban to Finnish insurance intermediaries has generated some controversy and the intermediary market has experienced consolidation in the few last years. The thesis examines the relationship between market structure and profitability among Finnish life insurance intermediaries and tests for the applicability of two market power hypotheses. The panel data analysis shows that...

We use agent-based simulation in a coordination game to analyse the possibility of market power abuse in a competitive electricity market. The context of this was a real application to the England and Wales electricity market as part of a Competition Commission Inquiry into whether two particular generators could profitably influence wholesale prices. The research contributions of this paper ar...

The paper concentrates on four aspects of mitigating market power in European electricity networks: capacity divestiture, entry, promoting interconnection, and the capacity to regulate competition in generation, drawing on lessons from Britain, California and the Continent. Each of these actions can improve the intensity of competition in electricity wholesale markets, but attractive strategies...

The rise to prominence of Wal-Mart and other big-box retailers has given new life to the debate about whether “buyer power” at intermediate links in a vertically related chain of industries is good or bad for consumers and hence whether it requires the attention of competition authorities. The term is rarely precisely defined, but as used by most commentators “buyer power” refers to the circums...

The deregulation of the electric industry in the United States opens the power market to competition. Buyers and sellers of electric power will be competing for limited resources. Although regulators will attempt to limit such activity, when large amounts of money are at stake, the participants have incentives to engage in destabilizing behavior. The goal of this study is to model agent driven ...