Publication database

This paper allows for endogenous costs in the estimation of price cost margins. In particular, we estimate price-cost margins when firms bargain over wages. We extent the standard two-equation set-up (demand and first-order condition in the product market) to include a third equation, which is derived from bargaining over wages. In this way, price-cost margins are determined by wages and vice versa. We implement the model using data for eight European airlines from 1976-1994, and show that the treatment of endogenous costs has important implications for the measurement of price-cost margins and the assessment of market power. Our main result is that observed prices in Europe are virtually identical to monopoly prices, even though observed margins are consistent with Nash behavior. Apparently, costs had been inflated to the point that the European consumers were faced with a de facto monopoly prices.

© Blackwell Publishing Ltd. 2006

Looking outside the confines of the usual business sphere, we find that Madonna is a born entrepreneur.Jamie Anderson and Martin Kupp reveal the business side of an entertainment legend.

© 2006 The Author Journal compilation © 2006 London Business School

Purpose - This article seeks to discuss LUZ, a Brazilian energy supplier that has decided to use their network for telecommunication. Design/methodology/approach - This case describes the acquisition-process from the perspective of the ESCRA sales manager, whose actions are analyzed, evaluated and discussed in class. Findings - LUZ, a Brazilian energy supplier, has decided to use their network for telecommunication. They found a subsidiary named LUZATEL for purchasing the required IT equipment. Four IT companies make it to the short list. One of them is ESCRA. ESCRA is a large Swedish producer of telecommunication equipment, who has recently started to additionally offer IT solutions. Originality/value - This paper uses a Brazilian energy supplier as a case study.

With permission of Emerald

This paper proposes a simultaneous-equation approach to the estimation of the contribution of transport infrastructure accumulation to regional growth. We model explicitly the political-economy process driving infrastructure investments; in doing so, we eliminate a potential source of bias in production-function estimates and generate testable hypotheses on the forces that shape infrastructure policy. Our empirical findings on a panel of France's regions over 1985-92 suggest that electoral concerns and influence activities were, indeed, significant determinants of the cross-regional allocation of transportation infrastructure investments. By contrast, we find little evidence of concern for the maximization of economic returns to infrastructure spending, even after controlling for pork-barrel.

With permission of Elsevier

Over the last decade, sector-specific regulation has been used to promote competition in European network industries. Given that competition is still rudimentary in some sectors, this process is still not finished. As a result, Member States have continued to remove regulatory barriers in network industries. This paper discusses the experiences from the energy, telecommunications and transport sectors by focussing on the role of European competition policy. We review a number of important case decisions in merger control, anti-trust and state aid control and discuss their implications for market opening. We conclude that a more holistic approach is needed in order to increase the effectiveness of competition policy instruments, i.e. a closer co-ordination of competition instruments, in particular state aid and anti-trust/merger policy.

© Verein für Socialpolitik und Blackwell Publishing Ltd. 2006