APPLICATIONS BARRIER TO ENTRY AND EXCLUSIVE VERTICAL CONTRACTS IN PLATFORM MARKETS

Our study extends the empirical literature on whether vertical restraints are anticompetitive. We focus on exclusive contracting in platform markets, which feature indirect network effects and thus are susceptible to an applications barrier to entry. Exclusive contracts in vertical relationships between the platform provider and software supplier can heighten entry barriers. We test these theories in the home video game market. We find that indirect network effects from software on hardware demand are present, and that exclusivity takes market share from rivals, but only when most games are nonexclusive. The marginal exclusive game contributes virtually nothing to console demand. Thus, allowing exclusive vertical contracts in platform markets need not lead to domination by one system protected by a hedge of complementary software. Our investigation suggests that bargaining power enjoyed by the best software providers and the skewed distribution of game revenue prevents the foreclosure of rivals through exclusive contracting. (JEL L42, L63, D12)     

SOME EMPIRICAL EVIDENCE ON THE EFFECTIVENESS OF ANTIMERGER RELIEF IN THE UNITED STATES

The extent of structural relief obtained by the government in a Section 7 settlement is modeled as an outcome of a bargaining game between the antitrust agency and parties to the merger. This framework is applied to data from 73 Section 7 cases settled during 1990–2000. The fraction of competitive overlap subject to divestiture is shown to depend on the extent of merger-specific efficiencies, the anticompetitive potential of the merger, and the hostage effect facing the merging firms, as well as the degree of media coverage of the case, the workload of the agency, and the partisan composition of Congress.(JEL L44 , C24 )     

PRODUCT BUNDLING AND INCENTIVES FOR MERGERS AND STRATEGIC ALLIANCES

This paper analyzes firms' choice of a merger or a strategic alliance in bundling their products with other complementary products. Tying two products of unequal value makes them equally valuable as they become inseparable for purchase. Consequently, firms can charge a higher price for the bundled products than before. If foreclosure is not the main purpose of bundling, firms would prefer strategic alliances to mergers because mergers only intensify competition by internalizing the complementarities of two products. In equilibrium, bundling occurs only through strategic alliances. (JEL L4, L11, L13, L23)     

Splitting the Marital Home: Gendered Property Division and Postdivorce Foreclosure

Divorce proceedings often involve splitting the marital home and contested claims over property and other assets. This case study examines the divorce–foreclosure nexus through key informant interviews, analysis of divorce files and foreclosure notices, and a review of court records on debt, remarriage, and criminal offending. We found that property disposition is a gendered process, with men receiving the marital home 1.7 times more often than women, even though they had more court debt, job instability, and criminal offending than their wives. Male defendants who hired an attorney received the house 85% of the time (52% for women defendants with an attorney). In postdivorce, men were more likely than women to remarry, have second mortgages, and to reoffend. We conclude that “equal” rather than “equitable” property division would reduce women’s structural disadvantage in divorce settlements and postdivorce home ownership.     

Narrative foreclosure in later life: Preliminary considerations for a new sensitizing concept

The objective of the paper is to explore narrative foreclosure as a sensitizing concept for studying the ways in which narrative identity development falters in later life. Two main characters in famous movies are contrasted to provide a better understanding of narrative foreclosure. The concept is further clarified by discussing similarities and differences with other theories about lifespan identity development. Last, the concept is related to theories in social gerontology to provide a better understanding of narrative foreclosure in later life.It is concluded that narrative foreclosure can be defined as the conviction that no new interpretations of one's past nor new commitments and experiences in one's future are possible that can substantially change one's life-story. In terms of the metaphor of a book, one is not only convinced about its ending and does not add new chapters anymore, but also refrains from enjoying, rewriting, and editing earlier chapters. Several interpersonal–social and structural–ideological factors are identified that promote narrative foreclosure in later life.Finally it is discussed that the narrative study of later life and of narrative foreclosure in particular, should be conducted in an interdisciplinary framework. Narrative foreclosure only exists within a certain constellation of personal, social, and societal characteristics, drawn together in a mutually dependent system.     

EMPIRICAL EVIDENCE ON FTC ENFORCEMENT OF THE MERGER GUIDELINES

The Justice Department's 1982/1984: merger guidelines identify various factors – concentration, entry barriers, ease of collusion, efficiency –that would thereafter determine whether the government will challenge a merger. Analysts have criticized enforcement agencies, however, for not following the guidelines, and criticize the guidelines themselves for not identifying the weights attached to the factors. Using a 1982-86 sample of seventy horizontal mergers, we examine which factors influenced Federal Trade Commission decisions to challenge mergers. The relative importance of the guidelines and other factors in merger challenges is measured, and related empirical issues are also explored.     

RENT CREATION AND RENT SHARING: NEW MEASURES AND IMPACTS ON TOTAL FACTOR PRODUCTIVITY

This analysis proposes new measures of rent creation and rent sharing and assesses their impact on productivity on cross‐country‐industry panel data. We find first that: (1) anticompetitive product market regulations positively affect rent creation and (2) employment protection legislation boosts hourly wages, particularly for low‐skill workers. However, we find no significant impact of this employment legislation on rent sharing, as the hourly wage increases are offset by a negative impact on hours worked. Second, using regulation indicators as instruments, we find that rent creation and rent sharing both have a substantial negative impact on total factor productivity. (JEL E22, E24, O30, L50, O43, O47, C23)     

Comfort and Burden: The Changing Meaning of Home for Owners At‐Risk of Foreclosure

The home is a meaningful site of security, control, and comfort. On the basis of ethnographic data, this paper examines how the meaning of home changes for people at‐risk of foreclosure and how their subsequent actions are shaped by these meanings. I explore shifts in the meaning of home, with particular attention to the interaction of race, family structure, and immigrant status in these constructions. As owners respond to foreclosure threat, interactions with lenders further leave owners with a sense that the process is beyond their control, threatening ontological security and a sense of being at home in the world.     

Foreclosure,Inequality, and the Difference That Place Makes

While the Great Recession and the associated rise in foreclosures significantly impacted households across the United States, default rates in rural areas and rural‐urban foreclosure differences have failed to attract substantial research attention. To expand the scale and scope of the foreclosure literature, this article examines place‐based differences in estimated foreclosure rates across U.S. counties, which are classified as urban, suburban, micropolitan, or rural. Defaults are considered both overall and for each county classification, and are related to income distribution and inequality, homeownership, adjudication of default, place‐based factors including amenity scores and proximity to urban areas, and geographic region. The article finds a complex relationship among these variables, with inequality itself negatively associated with default rates and lower‐middle?income households positively related to foreclosure. Further, while proximity to urban areas is positively related to foreclosure rates among nonurban counties, natural amenities are related to lower default rates in these areas. The article concludes by considering policy implications, and recommends expanding foreclosure mitigation and prevention strategies to nonurban places.     

Inter-group contact and out-group altruism after violence

Altruism among humans is common. It is especially prominent among in-group members. However, we are struck by results from laboratory-in-the-field experiments with out-group members of different ethnic or religious backgrounds. In all instances, the groups were rivals in civil wars. While we find almost no altruistic behavior among groups that were engaged in fighting, out-group altruism emerges with the passage of time. To address the underlying mechanism that might explain this puzzling result, we use a laboratory experiment that sorts between a norms revision explanation and a contact hypothesis explanation. Our findings show that contact with out-group members, in a mutually beneficial task, results in a reversion to prior levels of out-group altruism following conflict. Our findings reinforce the idea that deeply held attitudes toward a stigmatized out-group change following productive interactions with those out-group members. It is clear that hostility between groups need not persist over time.     

Merger activity and wage levels in U.S. manufacturing

This study uses micro data from the 1981 March Current Population Survey and incorporates industry merger information from the 1979 FTC Large Mergers and Acquisitions Series to examine the relationship between merger activity and wage levels in U.S. manufacturing. These data sources provide the opportunity to control the wage effect of workers’ differing personal qualities and to allow the investigation of wage levels in five merger categories. The findings suggest that in 1980, employees that work in industries composed of firms formed by horizontal, vertical, and product extension mergers received significantly higher wages than other workers. These results indicate that workers should benefit financially from the recent increase in the number of mergers, other than pure conglomerates. The author thanks William Jones, Peter Loeb, and Leo Troy for their valuable suggestions. The author is also grateful to the Rutgers University Research Council for support of this project.     

HORIZONTAL MERGERS IN THE PRESENCE OF CAPACITY CONSTRAINTS

We examine a merger between two competitors in a Bertrand‐Edgeworth model. We find that the effects of merger depend on the tightness of capacity constraints. The combination of two firms has no price effect if and only if the capacity constraints of all firms are binding both before and after the merger. However, a merger may turn a binding capacity constraint into a slack one, which results in higher prices. In an industry where excess capacity drives the premerger prices of all firms to the marginal cost, a merger may cause prices to rise even though aggregate capacity remains constant. (JEL L13, L40)     

Competing for love: Applying sexual economics theory to mating contests

Sexual economics theory analyzes the onset of heterosexual sex as a marketplace deal in which the woman is the seller and the man is the buyer, with the price paid in nonsexual resources. We extend that theory to analyze same-gender contests in that marketplace, and to elaborate the idea that what the woman sells is not just sex but exclusive access to her sexual charms. Women compete on sex appeal and on the promise of exclusiveness (faithfulness), with the goal of getting a man who will provide material resources. Men compete to amass material resources, with the goal of getting a good sex partner. Female competition includes showing off her sexual charms, offering sex at a lower price than rivals, seeking to improve her physical assets (e.g., by dieting), and use of informational warfare to sully rivals’ reputations while defending her own reputation against malicious gossip. We review evidence of these patterns, including evidence that female body dissatisfaction and pathological eating patterns increase when women perceive an unfavorable sex ratio (i.e., shortage of eligible men). Men compete in groups to amass resources, so men see other men not just as sexual rivals but also as coalition partners. Male homophobia is often not about sex but rather invokes the stereotype that a homosexual man will not be an effective coalition partner. Misunderstandings about whether sex or exclusivity is the central commitment can complicate marital adjustment for couples.     

IMPACT OF SEAT BELT USE ON DRIVING BEHAVIOR

Previous research has indicated that individual compensating behavior, specifically, more risky driving may reduce the effectiveness of seat belt laws. We test the compensating-behavior hypothesis using individual-specific survey data. The analysis also incorporates individual risk tastes. Our results indicate that the compensating-behavior hypothesis applies only to those that are not strongly risk averse. Other risk-differentiated groups do not exhibit compensating behavior. Finally, it seems that individuals learn to reduce compensating behavior over time.     

THE IMPACT OF MERGERS ON FARES STRUCTURE: EVIDENCE FROM EUROPEAN LOW‐COST AIRLINES

This paper examines mergers that lead to an almost immediate replacement of the target firm's business model in favor of that of the acquiring firm. We examine the post‐merger behavior of the two leading European dedicated low‐cost airlines, EasyJet and Ryanair, each acquiring another low‐cost airline, Go Fly and Buzz, respectively. We find that both takeovers had an immediate and sustained impact on both the pricing structures and the extent of intertemporal price schedules used on the acquired routes, with early booking fares noticeably reduced and only very late booking fares increased. The analysis suggests that the takeovers had a net beneficial effect for consumers, at least in price terms, as a consequence of the introduction of the acquiring firms' business models and associated yield management pricing systems. (JEL L11, L13, L93)     

A Comparative Study of Relational Interconnectedness,Merger, and Ego Development in Lesbian,Gay Male,and Heterosexual Couples

Abstract

One hundred ninety participants, including 34 lesbian couples, 31 gay male couples, and 30 heterosexual couples, were administered a series of questionnaires which assessed each partner's perceptions of relational interconnectedness and merger. The Washington University Sentence Completion Test of Ego Development (SCT: Loevinger& Wessler, 1970) was also administered to assess participants' level of ego development. We predicted that lesbian couples would be most inclined to relational interconnection as well as merger when compared to heterosexual and gay male couples, and that merger, postulated as a healthy process, would be positively correlated with ego development across all couples. Couples revealed occasionally experiencing merger and rated this experience as moderately important to their overall sense of relationship satisfaction. Ego development was not significantly correlated with relational interconnectedness or merger. Findings provided partial support for recent reformulations of merger as a healthy versus a regressive or pathological experience and did not suggest strong differences among lesbian, heterosexual, and gay male patterns of emotional connectedness.     

DO MERGERS REALLY REDUCE COSTS? EVIDENCE FROM HOSPITALS

In this paper, we compare potential and realized cost savings from hospital mergers. Our approach isolates changes in realized cost savings due to different output mixes from systematic changes due to time and also provides a measure of the potential cost savings due to scale economies. Our findings suggest that economies of scale are present for merging hospitals and they realize these cost savings immediately following a merger. However, we also show that over time, cost savings from the merger decrease and the proportion of hospitals experiencing positive cost savings declines.     

Scaling up to Increase Community-Based Organization Voice

This is a collaborative, community-based study of the merger of two Chicago community-organizing groups seeking to expand their geographic base and political power. Although the merger enabled the new organization to increase and use its power, this case also illustrates the various ways the merger presented opportunities for the new organization to maintain effectiveness at multiple scales while sustaining strong internal democracy and connections to local residents. By consolidating and leveraging new and old political relationships, and by maintaining or increasing the civic benefits of organizing, this merger provides important lessons for organizing in diverse community settings.     

Integrated or Disconnected? Examining Formal and Informal Networks in a Merged Nonprofit Organization

This article introduces nonprofit researchers and practitioners to a social network analytical technique for assessing internal staff relationships after a merger. We studied a case of a nonprofit merger, investigating its formal and informal intraorganizational networks to see which parts integrated and which remained separate operationally. We discovered a prior‐organizational‐affiliation‐based homophily within the merged organization: most interpersonal relationships existing within these networks remained among the employees who worked together prior to the merger. However, the informal and expressive networks of mentoring, friendship, and socioemotional support were even more disconnected than the formal and instrumental networks of work relationships and problem solving. We highlight the role of a mentoring network in bridging formal and informal networks in a merged organization.