Chapter 1: Downstream Competition and the Effects of Buyer Power The first chapter examines the interaction between buyer power and competition intensity in the downstream market in affecting consumer and total welfare. We study a model where oligopolistic retailers compete in quantity in the downstream market and one of them is a large retailer that has its own exclusive supplier. Negotiation between this retailer and its supplier is modeled as a generalized Nash bargaining game. We demonstrate that an increase in the buyer power of the large retailer against its supplier leads to a fall in retail price and consequently an improvement in consumer surplus and this is true even in the extreme case where the downstream market is served by a monopoly. More interestingly, we find that the effects of buyer power are large when the intensity of downstream competition is low, with the effects being the largest in the case of downstream monopoly. This suggests that buyer power and downstream competition are substitutes. Chapter 2: Subsidy, Product Diversity and Buyer Power The objective of the second chapter is to analyze the effectiveness of government subsidies in promoting product diversity when the downstream firm (a retailer) has buyer power. We extend the standard Dixit-Stiglitz model of monopolistic competition and compare the effects of subsidies on equilibrium number of product varieties and social welfare in the case where products are sold directly to consumers and the case where they are sold through a monopoly retailer with buyer power. Two types of subsidies are considered, a subsidy on marginal cost and a subsidy on fixed cost. We find that while the two types of subsides have different effects on the quantity and retail price of each variety, they both raise the number of product varieties and the social welfare. Moreover, a combination of the two types of subsidies is able to achieve the social optimum. These results are true even when products are distributed through a downstream monopoly retailer who has all the bargaining power, but the mechanism through which a subsidy increases product varieties is different. In comparison with the case where products are distributed directly to consumers, retailer buyer power reduces product variety and social welfare. Furthermore subsidies become less effective in the presence of buyer power. To be more specific, retailer buyer power has both a level effect and a marginal effect on product diversity. At any given subsidy rate, the equilibrium number of varieties is smaller and a marginal increase in subsidy leads to a smaller increase in the number of varieties. Chapter 3: Subsidy on Complementary Products in a Model of Monopolistic Competition The third chapter seeks to re-examine the market provision of product diversity under monopolistic competition and the effects of an infinitesimal subsidy on product variety and social welfare in the case of complementary products. This examination builds on the standard Dixit-Stiglitz model of monopolistic competition but assumes an alternative demand linkage. The results show that, different from the case of substitutable products, demand complementarity leads to multiple equilibriums and the number of product varieties could be higher or lower than the constrained optimum depending on the level of the fixed cost of production. When the fixed costs are small, the market yields too many products and an infinitesimal subsidy exacerbates the problem leading to an over-supply of product varieties. On the other hand, when the fixed costs are large, there are too few products and in some cases the complementary goods industry becomes non-existent. A subsidy that induces a switch of equilibriums enhances product variety and improves social welfare.

Chapter 1: Downstream Competition and the Effects of Buyer Power The first chapter examines the interaction between buyer power and competition intensity in the downstream market in affecting consumer and total welfare. We study a model where oligopolistic retailers compete in quantity in the downstream market and one of them is a large retailer that has its own exclusive supplier. Negotiation between this retailer and its supplier is modeled as a generalized Nash bargaining game. We demonstrate that an increase in the buyer power of the large retailer against its supplier leads to a fall in retail price and consequently an improvement in consumer surplus and this is true even in the extreme case where the downstream market is served by a monopoly. More interestingly, we find that the effects of buyer power are large when the intensity of downstream competition is low, with the effects being the largest in the case of downstream monopoly. This suggests that buyer power and downstream competition are substitutes. Chapter 2: Subsidy, Product Diversity and Buyer Power The objective of the second chapter is to analyze the effectiveness of government subsidies in promoting product diversity when the downstream firm (a retailer) has buyer power. We extend the standard Dixit-Stiglitz model of monopolistic competition and compare the effects of subsidies on equilibrium number of product varieties and social welfare in the case where products are sold directly to consumers and the case where they are sold through a monopoly retailer with buyer power. Two types of subsidies are considered, a subsidy on marginal cost and a subsidy on fixed cost. We find that while the two types of subsides have different effects on the quantity and retail price of each variety, they both raise the number of product varieties and the social welfare. Moreover, a combination of the two types of subsidies is able to achieve the social optimum. These results are true even when products are distributed through a downstream monopoly retailer who has all the bargaining power, but the mechanism through which a subsidy increases product varieties is different. In comparison with the case where products are distributed directly to consumers, retailer buyer power reduces product variety and social welfare. Furthermore subsidies become less effective in the presence of buyer power. To be more specific, retailer buyer power has both a level effect and a marginal effect on product diversity. At any given subsidy rate, the equilibrium number of varieties is smaller and a marginal increase in subsidy leads to a smaller increase in the number of varieties. Chapter 3: Subsidy on Complementary Products in a Model of Monopolistic Competition The third chapter seeks to re-examine the market provision of product diversity under monopolistic competition and the effects of an infinitesimal subsidy on product variety and social welfare in the case of complementary products. This examination builds on the standard Dixit-Stiglitz model of monopolistic competition but assumes an alternative demand linkage. The results show that, different from the case of substitutable products, demand complementarity leads to multiple equilibriums and the number of product varieties could be higher or lower than the constrained optimum depending on the level of the fixed cost of production. When the fixed costs are small, the market yields too many products and an infinitesimal subsidy exacerbates the problem leading to an over-supply of product varieties. On the other hand, when the fixed costs are large, there are too few products and in some cases the complementary goods industry becomes non-existent. A subsidy that induces a switch of equilibriums enhances product variety and improves social welfare.

This thesis consists of three closely connected pieces of work and an enhanced version of my M.Phil. thesis. The first three substantive chapters analyse vertical contracting in input markets under the exercise of differential buyer power. Chapters 2 and 3 consider the case of a supplier selling its output via a supermarket that offers captive demand (due to customers who anyway make a trip for their weekly shopping), which its rival, a local store is not able to offer. It is shown that the supermarket can negotiate an input price lower than the local store's only if its advantage translates into sufficient bargaining strength in setting contracts. The existence of a waterbed effect, the implications of a partially covered market, a nonlinear pricing structure and welfare implications of a ban in discrimination are also explored. Chapter 4 modifies the standard model where size determines buyer power to show that if quantities need to be decided in advance, an increase in a retailer's size is always welfare improving. For the presence of waterbed effects, we propose a novel insight that runs across different classes of models: following a discount to one retailer, the supplier faces two competing incentives - it wants to extract profits from the rival retailer but it also wants to transfer sales towards it. The waterbed effect is shown to be present only if the discount to the retailer is small, so incentives for profit extraction outweigh those for transferring business. Finally chapter 5 studies a firm's strategic incentive to outsource when its product displays network effects. It shows that a firm would choose to increase its observable marginal cost to make its competitor less aggressive and thereby increase its own probability of winning competition for the market. This is robust to small levels of uncertainty.

This thesis describes the reconstruction network 10 kV HV networks in a teaching hospital in the transition to a new 22 kV voltage level according to valid regulations. The paper describes the current state of technological equipment and its gradual replacement with new technology at 22 kV voltage level in each power units so as not to limit the operation of the hospital. For this purpose, the new backup system for rotating spare resources. The thesis deals with new input distribution, which will serve as a transfer point between the customer and distributor of electricity as well as advance the existing technological equipment.

La puissance d'achat est appréhendée par le droit européen comme un pouvoir de marché entraînant des effets pro et anticoncurrentiels sur le marché intérieur. Les dispositions de droit positif concernant les pratiques restrictives de concurrence et les concentrations d'une part, ainsi que les abus de domination d'autre part, correspondent à deux hypothèses d'appréhension de la puissance d'achat par le droit de la concurrence. Si les premières relèvent d'une logique structurelle tempérée, les abus de domination obéissent à une logique ordo- structurelle forte teintée d'un élément subjectif afférent au comportement. Dans le premier cas, la puissance d'achat est considérée comme nocive pour la concurrence si son degré est trop important. Dans le second cas, elle est présumée nocive et réprimée si elle est exercée abusivement. Les objectifs de politique concurrentielle européenne de protection de l'efficience globale de marché et les outils normatifs afférents témoignent toutefois d'une approche limitative de la puissance d'achat. Les lois actuelles démontrent certaines faiblesses dans l'appréhension de la puissance d'achat, celle-ci dépassant les situations monopso- ou oligopsonistiques et s'exprimant notamment comme pouvoir de marché relatif. Les modifications législatives proposées dans le sens d'une appréhension de la puissance d'achat dans ses différentes acceptions économiques pourraient toutefois permettre de protéger utilement l'ensemble des acteurs économiques concernés sans se limiter au consommateur final. / European law considers buyer power as a market power able to create pro and anticompetitive effects on the internal market. Buyer power is concerned by the application of competition law in cases of anticompetitive pratices and mergers on the one hand and abuse of dominance on the other hand which differents economic logics. Rules about anticompetitive practices and mergers focuse on the buyer power's degree which define pro and anticompetitive effects. Rules about abuse of dominance focuse on the abuse of a dominant buyer and assume anticompetitive effects. The assessment of buyer power under competition law is substantially influenced by the general competition policy concept which is aimed at maximising consumer welfare. Competition law considers buyer power predominantly as an absolute market power and not in the form of bargaining power exercised bilaterally vis-à-vis individual suppliers. Nevertheless european existing law is not able to consider all situations of buyer power. Monopolistic or oligopolistic situations do not reflect the reality of buyer power which also significate a relative market power. It seems that proposed legislative modifications aiming to consider the economic reality of buyer power on the entire market could lead to a better protection of all concerned competitors and not only the end consumer. / Das europäische Recht tendiert dazu Nachfragemacht als Marktmacht aufgrund ihrer wettbewerbspositiven und -negativen Effekten auf dem Binnenmarkt zu erfassen. Die Nachfragemacht im europäischen Recht wird zum einen durch das Kartellrecht, die Fusionskontrolle und zum anderen durch die Missbrauchskontrolle erfasst. Diese Normen entsprechen alle einer wettbewerbspolitischen Orientierung, können jedoch aufgrund ihrer jeweiligen Wettbewerbssysteme unterschieden werden. Zum einem erfassen das Kartellrecht und die Fusionskontrolle die Nachfragemacht als Marktmacht, die aufgrund ihres Grades positive und negative Auswirkungen auf die Marktstruktur bewirken kann. Zum anderen wird die Nachfragemacht aber auch vom europäischen Missbrauchsverbot erfasst. Es wird anders als im Kartellrecht oder bei der Fusionskontrolle nicht ermittelt, inwiefern Nachfragemacht den Wettbewerb möglicherweise schädigt, sondern ob der Wettbewerb wegen der Ausnutzung dieser Marktmacht geschädigt wird. Jedoch erfassen die europäischen Rechtsnormen den ökonomischen Ansatz der Nachfragemacht auch anhand des Monopsonmodell nur teilweise und stellen deshalb eine begrenzte juristische Analyse dieses Phänomens dar. Dabei schliesst das europäische wettbewerbspolitische Leitbild den Schutz bilateraler Verhältnisse aus seinem Anwendungsbereich aus wohlfahrtsneutralen Gründen aus. In diesem Sinne wird Nachfragemacht prinzipiell als absolute Marktmacht definiert. In der Weise einer vereinfachten aber zugleich wirksamen Erfassung von Nachfragemacht durch das europäische Recht könnten jedoch die vorgeschlagenen Änderungen der aktuellen Rechtsnormen zu einem umfassenden Schutzes aller Marktteilnehmer führen.

<div> <p>First Essay: We study the effect of entry of ethanol plants on the spatial pattern of corn prices. We use pre- and post-entry data from corn elevators to implement a clean identification strategy that allows us to quantify how price effects vary with the size of the entrant (relative to local corn production) and with distance from the elevator to the entrant. We estimate Difference-In-Difference (DID) and DID-matching models with linear and non-linear distance specifications. We find that the average-sized entrant causes an increase in corn price that ranges from 10 to 15 cents per bushel at the plant’s location, depending on the model specification. We also find that, on average, the price effect dissipates 60 miles away from the plant. Our results indicate that the magnitude of the price effect as well as its spatial pattern vary substantially with the size of the entrant relative to local corn supply. Under our preferred model, the largest entrant in our sample causes an estimated price increase of 15 cents per bushel at the plant’s site and the price effect propagates over 100 miles away. In contrast, the smallest entrant causes a price increase of only 2 cents per bushel at the plant’s site and the price effect dissipates within 15 miles of the plant. Our results are qualitatively robust to the pre-treatment matching strategy, to whether spatial effects are assumed to be linear or nonlinear, and to placebo tests that falsify alternative explanations.</p><p><br></p></div> <p>Second Essay: We estimate the cost of transporting corn and the resulting degree of spatial differentiation among downstream firms that buy corn from upstream farmers and examine whether such differentiation softens competition enabling buyers to exert market power (defined as the ability to pay a price for corn that is below its marginal value product net of processing cost). We estimate a structural model of spatial competition using corn procurement data from the US state of Indiana from 2004 to 2014. We adopt a strategy that allows us to estimate firm-level structural parameters while using aggregate data. Our results return a transportation cost of 0.12 cents per bushel per mile (3% of the corn price under average conditions), which provides evidence of spatial differentiation among buyers. The estimated average markdown is $0.80 per bushel (16% of the average corn price in the sample), of which $0.34 is explained by spatial differentiation and the rest by the fact that firms operated under binding capacity constraints. We also find that corn prices paid to farmers at the mill gate are independent of distance between the plant and the farm, providing evidence that firms do not engage in spatial price discrimination. Finally, we evaluate the effect of hypothetical mergers on input markets and farm surplus. A merger between nearby ethanol producers eases competition, increases markdowns by 20%, and triggers a sizable reduction in farm surplus. In contrast, a merger between distant buyers has little effect on competition and markdowns.</p><p><br></p> Third Essay: We study the dynamic response of local corn prices to entry of ethanol plants. We use spatially explicit panel data on elevator-level corn prices and ethanol plant entry and capacity to estimate an autoregressive distributed lag model with instrumental variables. We find that the average-sized entrant has no impact on local corn prices the year of entry. However, the price subsequently rises and stabilizes after two years at a level that is about 10 cents per bushel higher than the pre-entry level. This price effect dissipates as the distance between elevators and plants increase. Our results imply that long-run (2 years) supply elasticity is smaller than short-run (year of entry) supply elasticity. This may be due to rotation benefits that induce farmers to revert back to soybeans, after switching to corn due to price signals the year the plant enters. Furthermore, our results, in combination with findings in essay 2 of this dissertation, indicate that ethanol plants are likely to use pricing strategies consistent with a static rather than dynamic oligopsony competition.