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We analyze the effects of better algorithmic demand forecasting on collusive profits. We show that the comparative statics crucially depend on the whether actions are observable. Thus, the optimal antitrust policy needs to take into account the institutional settings of the industry in question....
Persistent link: https://www.econbiz.de/10013093034
Sophisticated collusive compensation schemes such as assigning future market shares or direct transfers are frequently observed in detected cartels. We show formally why these schemes are useful for dampening deviation incentives when colluding firms are temporary asymmetric. The relative...
Persistent link: https://www.econbiz.de/10012698813
We propose a simple and powerful numerical algorithm to compute the transition process in continuous-time dynamic … system of functional differential equations of the retarded type. We apply the Waveform Relaxation algorithm, i.e., we …
Persistent link: https://www.econbiz.de/10009124183
Due to computing and communication facilities, formal procedures, often referred to as "algorithms", are now extensively used in public, economic and social areas. These procedures, currently at the forefront of criticisms, share some features with mechanisms as defined by economists, following...
Persistent link: https://www.econbiz.de/10011822644
We study the interaction between algorithmic advice and human decisions using high-resolution hotel-room pricing data. We document that price setting frictions, arising from adjustment costs of human decision makers, induce a conflict of interest with the algorithmic advisor. A model of advice...
Persistent link: https://www.econbiz.de/10014444885
This paper addresses the steep learning curve in Machine Learning faced by non-computer scientists, particularly social scientists, stemming from the absence of a primer on its fundamental principles. I adopt a pedagogical strategy inspired by the adage ”once you understand OLS, you can work...
Persistent link: https://www.econbiz.de/10015070152
Theoretical considerations suggest that nonlinear health care price schedules have heterogeneous effects on health care demand. In this paper, we develop and apply a finite mixture bivariate probit model to analyze whether there are heterogeneous reactions to the introduction of a nonlinear...
Persistent link: https://www.econbiz.de/10010212657
This paper revisits the airline schedule-buffer choice problem analyzed by Brueckner, Czerny and Gaggero (2020) using a simpler model where the random shocks influencing flight times are discrete rather than continuous. The analysis yields closed-form solutions for the flight and ground buffers...
Persistent link: https://www.econbiz.de/10012270584
We consider a multi-service transportation system in which passengers are heterogeneous along two dimensions, namely ideal departure time and value of time, leading to both horizontal and vertical differentiation. We investigate the behavior of passengers, and assess how service pricing and...
Persistent link: https://www.econbiz.de/10012103986
This paper presents an extensive theoretical and empirical analysis of the choice of schedule buffers by airlines. With airline delays a continuing problem around the world, such an undertaking is valuable, and its lessons extend to other passenger transportation sectors. One useful lesson from...
Persistent link: https://www.econbiz.de/10012110214