Essays in Applied Industrial Organization

Alexei Alexandrov
2007 unpublished
Essays in Applied Industrial Organization Alexei Alexandrov I examine horizontally di¤erentiated ...rms in three di¤erent contexts. First, I look at an industry where ...rms can develop self-customizable products -products which appeal to di¤erent consumers for di¤erent reasons. This addition results in an unexpected conclusion that sometimes more di¤erentiated ...rms can end up with lower pro...ts than less di¤erentiated ...rms. The result is due to the fact that more di¤erentiated ...rms
more » ... ntiated ...rms engage in a prisoner dilemma type competition, making their products more and more self-customizable, and ending up with higher costs in the end. In the equilibrium consumers derive more welfare than is socially optimal. We, with Martin Lariviere, go on to examine why capacity constrained restaurants o¤er reservations for consumers. It does not make sense for a monopolist to o¤er free reservations in a homogenous market, since it leaves the monopolist with empty seats due to some of the consumers not honoring their reservations. We ...nd that even in a heterogeneous market with competition two restaurants with the same total capacity as a monopolist, under some parameters, o¤er reservations when the monopolist does not. Moreover, whenever the monopolist o¤ers
doi:10.21985/n28h7t fatcat:6a7dia7a2zelbb4ulfxkkeelze