Browsing by Author "Cunha, Mariana"
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- Coordinated Effects of Corporate Social ResponsibilityPublication . Cunha, Mariana; Mota, FilipaThis paper analyzes the coordinated effects of corporate social responsibility (CSR) in a setting where firms take into account in their objective function the consumer’s welfare in addition to their profits, produce differentiated products, and compete in quantities. We consider a symmetric case, where firms have the same level of CSR and an asymmetric case, where firms have different levels of CSR. Our results confirm that assigning a positive weight to consumer surplus makes collusion harder to sustain, as shown in the literature. However, for a sufficiently high level of CSR, collusion sustainability is actually increasing in the degree of product substitutability when firms are CSR-symmetric. When firms are CSR-asymmetric, collusion sustainability is increasing in the degree of product differentiation if products are complements. Furthermore, we show that collusion may be welfare-improving when firms adopt a socially responsible behavior, which provides an interesting background to competition authorities when analysing cartel cases.
- Coordination effects of Corporate Social ResponsibilityPublication . Cunha, Mariana; Mota, Filipa
- Endogenous product design and quality with rationally inattentive consumersPublication . Cunha, Mariana; Osório, António; Ribeiro, Ricardon some markets, consumers do not know the attributes of all the products that are available in the market, or the prices at which they are offered. To overcome this uncertainty, consumers may gather and process information about those attributes and prices. In this paper, we examine the consequences of consumer costs of doing so on firms product attribute and pricing decisions. To do so, we follow the rational inattention literature in assuming that, before entering the choice situation, consumers are in contact with all products, but may have an incomplete or imprecise prior idea about their attributes and prices. Further, we also assume that consumers can, at a cost, gather and process information in a non-random fashion about any (sub)set of products, with any precision about their attributes and prices. Furthermore, we assume that products are characterized by both horizontal and vertically differentiated attributes, which we address as design and quality, respectively. We find a number of interesting results. First, if the unit costs of gathering and processing information are homogeneous among consumers, firm' should differentiate their products as those costs fall, so to relax the otherwise increasing price competition. This implies that equilibrium prices may increase as these costs decrease, because product differentiation countervails the otherwise negative impact on prices. Second, if the unit costs of gathering and processing information are heterogeneous among consumers, with a sizeable proportion of "informed" consumers, firms should always seek to differentiate their products as maximum as possible, independently of the level of information costs of the "uninformed" consumers. This implies that equilibrium price levels do not increase (and, in fact, tend to decrease) as the unit costs of those consumers decrease and that "informed" consumers serve as a "market competition guardian". Finally, in all the above cases, firms do not need to differentiate themselves along all attribute dimensions. Differentiation along one attribute dimension is more than enough to relax price competition.
- Sequential mergers and Antitrust Authority's decisions in stackelberg marketsPublication . Cunha, Mariana; Vasconcelos, HélderThis paper analyses a sequential merger formation game in a setting where: (i) firms compete à la Stackelberg; (ii) mergers may give rise to endogenous efficiency gains; and (iii) every merger has to be submitted for approval to the Antitrust Authority (AA). Two different types of AA are studied: first, we assume a myopic AA, which accepts or rejects a given merger without considering that this merger may be followed by other mergers; and, second, a forward looking AA, which anticipates the final industry structure a merger will give rise to, if approved. We conclude that these two types of AA adopt similar decisions whenever a merger would not trigger the exit of outsider firms. Their decisions are, however, shown to be very different when evaluating exit-inducing merger proposals.