D40 - Market Structure, Pricing, and Design: GeneralReturn

This paper establishes a two-stage Hotelling model to identify the implications of the upgrades of durable goods produced by a spatial monopoly. The major findings indicate that, due to the positive effects on profits of the upgrading of products, the monopoly has the motivation to launch upgraded versions with high quality instead of solely producing products with low quality. The monopoly, meanwhile, would not make a commitment to either the high-quality products or the low-quality ones. In addition, the price of the low-quality products decreases as upgraded ones appear on the market in a second stage, since no consumers would store the low-quality products for future consumption.

This paper examines the role of structural change in the asymmetric adjustment of retail energy prices following changes in crude oil costs. The paper also examines the pattern of adjustment in retail energy prices when exchange rate is accounted for as part of the marginal cost of importing crude oil in European countries with high oil import dependency ratio. The paper shows that the results of Greenwood-Nimmo and Shin (2013) no longer hold when the structural change in the relationship between retail energy prices and crude oil costs is taken into the consideration. The paper also cautions that studies like Kristoufek and Lunackova (2014) that failed to account for exchange rate as part of the marginal cost of importing oil for countries with high oil import dependency ratio may be misleading. In fact, the results of this paper further indicate that once the exchange rate effect is taken into consideration, the possibility of rent-seeking behaviour in the gasoline markets of Italy and Spain disappears; while the rockets and feathers effect observed in most of the ex-tax gasoline, diesel, domestic heating oil and industrial fuel oil markets vanishes.

This paper aims to theoretically derive and afterwards econometrically assess the impact of intellectual property protection (IPP) on national economies. The authors’ main hypothesis is that by creating a form of non-market protection, IPP limits free competition and has no positive effects on national economies and the world economy in general. The hypothesis is tested through estimation of relationship between charges for the use of intellectual property and 1) gross domestic product, 2) GDP growth, 3) unemployment, 4) exports of high-tech products, 5) FDI outflow, and 6) expenses on research and development in a panel dataset of 146 countries in years 2005–2014 based Arellano-Bond estimator for dynamic panel models. The data tells us that changes in these charges have not a significant impact on the studied indicators, which counts against claims of positive impact of IPP on economies and growth.