Using a sample of 10 European countries and 17 industries covering the period 1981 to 1999, we test whether the EU's Single Market Programme had a significant procompetitive effect in terms of a reduction in firms' markups over marginal costs. In the framework of the markup estimation method suggested by Roeger (1995), we employ a panel approach for each of the sectors to test for both an instantaneous structural change between 1989 and 1993 as well as a continuous change in parameters using smooth transition analysis. The results do not indicate a pervasive pro-competitive effect of the Single Market. While markup reductions are found for aggregate manufacturing as of 1993, it is also suggested that markups increased in several sectors in the pre-completion period around the end of the 80s. This is likely to be due to strong increase in concentration and average firm size at the EU level in the second half of the 1980s. After all, the Single Market's net effect on markups is likely to be negligible if not positive. (author's abstract) / Series: EI Working Papers / Europainstitut

We investigate the impact of consumer search and competition on pricing strategies in Germany's electricity retail. We utilize a unique panel dataset on spatially varying search requests at major online price comparison websites to construct a direct measure of search intensity and combine this information with zip code level data on electricity tariffs between 2011 and 2014. The paper stands out by explaining price dispersion by differing pricing strategies of former incumbents and entrant firms, which are distinct in their attributable shares in informed versus uninformed consumers. Our empirical results suggest causal evidence for an inverted U-shape effect of consumer search intensity on price dispersion in a clearinghouse environment as in Stahl (1989). The dispersion is caused by opposite pricing strategies of incumbents and entrants, with incumbents initially increasing and entrants initially decreasing tariffs as a reaction to more consumer search. We also find an inverted U-shape effect of competition on price dispersion, consistent with theoretical findings by Janssen and Moraga-González (2004). Again, the effect can be explained by opposing pricing strategies of incumbents and entrants. (authors' abstract) / Series: Department of Economics Working Paper Series

The existing theoretical and empirical literature to investigate the existence of local market power is typically based on spatial competition models in the tradition of Hotelling's (1929) linear city and Salop's (1979) circular city. In models of this kind, strong assumptions are made that lead to a spatial homogeneity (symmetry) of firms in a highly stylized one-dimensional market space. However, some of these assumptions are hardly satisfied in many (retail) markets. The present thesis builds on a recent model by Chen and Riordan (2007), in which the market is characterized by a star-shaped graph with a central intersection. In an extension of Chen and Riordan, I distinguish between firms close to the center and firms in the periphery of a spatial market. This spatial heterogeneity leads to an asymmetric competition between firms. A central firm directly competes with a larger number of firms than remote firms do. The implications of the theoretical model are tested in two empirical applications to the retail gasoline market of Vienna and Austria. Using station level data on diesel prices, I estimate price reaction functions for gasoline stations in two different approaches. In the first approach the Austrian retail gasoline market is divided into numerous highly localized and delimited markets. The second approach analyzes the metropolitan area of Vienna and treats the whole market as one big network of gasoline stations, which are connected through the road network. In both approaches I apply econometric spatial autoregressive (SAR) models. The estimated parameters of the slopes of the reaction functions are used to evaluate the impact of individual gasoline stations on equilibrium market prices depending on their location within the market (network). All results obtained provide evidence for (more) central suppliers serving as a stronger reference in pricing than (rather) remote suppliers. Thus, the assumption of a symmetry in spatial competition which is usually implied by spatial competition models in theoretical and applied research, is rejected. (author's abstract)

We empirically investigate the importance of centrality (holding a central position in a spatial network) for strategic interaction in pricing for the Austrian retail gasoline market. Results from spatial autoregressive models suggest that the gasoline station located most closely to the market center - defined as the 1-median location - exerts the strongest effect on pricing decisions of other stations. We conclude that centrality influences firms' pricing behavior and further find that the importance of centrality increases with market size. (authors' abstract) / Series: Department of Economics Working Paper Series

We highlight the importance of "centrality" for pricing. Firms characterized by a more central position in a spatial network are more powerful in terms of having a stronger impact on their competitors' prices and on equilibrium prices. These propositions are derived from a simple theoretical model and investigated empirically for the retail gasoline market of Vienna, Austria. We compute a measure of network centrality based on the locations of gasoline stations in the road network. Results from a spatial autoregressive model show that prices of gasoline stations are more strongly correlated with prices of central competitors.

We analyze price dispersion using panel data from a large price comparison site. We use past pricing behavior to instrument for potential endogeneity that might result from the selection of firms to certain product markets. We find that greater price adjustment costs result in greater price dispersion. Although the impact of price adjustment costs on price dispersion became weaker over time, the causal effect of price adjustment costs on price dispersion is still present at the end of the period. Our results are robust to many alternative empirical speciffications. We also test a range of alternative explanations of price dispersion, such as search cost, service differentiation, obfuscation, vertical restraints, and market structure. / Series: Department of Economics Working Paper Series

MDMX has emerged as a negative regulator of p53 transcriptional activity following DNA damage, loss of ribosomal integrity, and aberrant mitogenic signaling. Disruption of rRNA biogenesis by ribosomal stress activates p53 by releasing ribosomal proteins from nucleoli which bind MDM2 and inhibit p53 degradation. We found that p53 activation by ribosomal stress requires degradation of MDMX by MDM2. This occurs by L11 binding to the acidic domain of MDM2 which promotes its E3 ligase function preferentially towards MDMX. Further, unlike DNA damage which regulates MDMX stability through ATM-dependent phosphorylation events, ribosomal stress does not require MDMX phosphorylation suggesting p53 may be more sensitive to suppression by MDMX under these conditions. Indeed, we find that tumor cells overexpressing MDMX are less sensitive to ribosomal stress-induced growth arrest by the addition of actinomycin D due to formation of inactive p53-MDMX complexes that fail to transcriptionally activate downstream targets such as p21. Knockdown of MDMX increases sensitivity to actinomycin D, whereas MDMX overexpression abrogates p53 activation. Furthermore, MDMX expression promotes resistance to the chemotherapeutic agent 5-fluorouracil (5-FU), which at low concentrations activates p53 by inducing ribosomal stress without significant DNA damage signaling. Knockdown of MDMX abrogates HCT116 tumor xenograft formation in nude mice. MDMX overexpression does not accelerate tumor growth but increases resistance to 5-FU treatment in vivo. In addition to MDMX regulation at the protein level, we found that regulation of cellular MDMX levels, like MDM2, can occur at the transcriptional level by inducing the Ras/Raf/MEK/ERK pathway. We found MDMX levels in tumor cell lines closely correlate with promoter activity and mRNA level. Activated K-Ras and growth factor IGF-1 induce MDMX expression at the transcriptional level through mechanisms that involve the MAPK kinase and c-Ets-1 transcription factors. Pharmacological inhibition of MEK results in down-regulation of MDMX in tumor cell lines. MDMX overexpression is detected in ~50% of human colon tumors and showed strong correlation with increased Erk phosphorylation. Taken together, the data show that MDMX has multiple modes of regulation, which ultimately determine the overall extent of p53 activation.

<p>The stringent response plays a significant role in the survival of bacteria during different environmental conditions. It is activated by the binding of stringent factor (SF) to stalled ribosomes that have an unacylated tRNA in the ribosomal A-site which leads to the synthesis of (p)ppGpp. ppGpp binds to the RNA polymerase, resulting in a rapid down-regulation of rRNA and tRNA transcription and up-regulation of mRNAs coding for enzymes involved in amino acid biosynthesis. The importance of the A-site and unacylated tRNA in the activation of SF was confirmed by chemical modification and subsequent primer extension experiments (footprinting experiments) which showed that binding of SF to ribosomes resulted in the protection of regions in 23S rRNA, the A-loop and helix 89 that are involved in the binding of the A-site tRNA. An in vitro assay showed that the ribosomal protein L11 and its flexible N-terminal part was important in the activation of SF. Interestingly the N-terminal part of L11 was shown to activate SF on its own and this activation was dependent on both ribosomes and an unacylated tRNA in the A-site. The N-terminal part of L11 was suggested to mediate an interaction between ribosome-bound SF and the unacylated tRNA in the A-site or interact with SF and the unacylated tRNA independently of each other. Footprinting experiments showed that SF bound to the ribosome protected bases in the L11 binding domain of the ribosome that were not involved in an interaction with ribosomal protein L11. The sarcin/ricin loop, in close contact with the L11 binding domain on the ribosome and essential for the binding and activation of translation elongation factors was also found to be protected by the binding of SF. Altogether the presented results suggest that SF binds to the factor-binding stalk of the ribosome and that activation of SF is dependent on the flexible N-terminal domain of L11 and an interaction of SF with the unacylated tRNA in the A-site of the 50S subunit.</p>

The stringent response plays a significant role in the survival of bacteria during different environmental conditions. It is activated by the binding of stringent factor (SF) to stalled ribosomes that have an unacylated tRNA in the ribosomal A-site which leads to the synthesis of (p)ppGpp. ppGpp binds to the RNA polymerase, resulting in a rapid down-regulation of rRNA and tRNA transcription and up-regulation of mRNAs coding for enzymes involved in amino acid biosynthesis. The importance of the A-site and unacylated tRNA in the activation of SF was confirmed by chemical modification and subsequent primer extension experiments (footprinting experiments) which showed that binding of SF to ribosomes resulted in the protection of regions in 23S rRNA, the A-loop and helix 89 that are involved in the binding of the A-site tRNA. An in vitro assay showed that the ribosomal protein L11 and its flexible N-terminal part was important in the activation of SF. Interestingly the N-terminal part of L11 was shown to activate SF on its own and this activation was dependent on both ribosomes and an unacylated tRNA in the A-site. The N-terminal part of L11 was suggested to mediate an interaction between ribosome-bound SF and the unacylated tRNA in the A-site or interact with SF and the unacylated tRNA independently of each other. Footprinting experiments showed that SF bound to the ribosome protected bases in the L11 binding domain of the ribosome that were not involved in an interaction with ribosomal protein L11. The sarcin/ricin loop, in close contact with the L11 binding domain on the ribosome and essential for the binding and activation of translation elongation factors was also found to be protected by the binding of SF. Altogether the presented results suggest that SF binds to the factor-binding stalk of the ribosome and that activation of SF is dependent on the flexible N-terminal domain of L11 and an interaction of SF with the unacylated tRNA in the A-site of the 50S subunit.

This paper advances a decision theoretical foundation for pricing scripts by means of a simple model of product differentiation implementing the undercut-proof equilibrium concept. We argue that while sociological factors play undoubtedly an important role, economic analysis can complement the insights from economic sociology on pricing in the primary art market. Our model analyzes the effects of the gallery's and the artist's reputation on the price the gallery charges. The results suggest that prices positively correlate with an artist's reputation and negatively correlate with a gallery's reputation. The model may therefore explain the results of recent empirical studies that have led to similar results. (author's abstract) / Series: Department of Economics Working Paper Series