Competition in Mobile Telephony in France and Germany

This paper provides an insight into the antitrust investigation initiated by the French competition authority, which found that mobile operators exchanged strategic information and agreed to fix market shares in years the 2000-2002. The empirical analysis is based on the comparison of mobile markets in France and Germany and uses aggregate industry-level data on subscriptions and prices. The penetration of mobile phones at the end of 1999 was higher in France than in Germany, but this situation was reversed by the end of 2002. In the same time period, minimum prices of mobile services in France, computed for a defined low-usage basket, were on average by about 58% lower than the corresponding prices in Germany. The results of binomial logit demand estimation suggest two explanations for this situation. First, there is a significant difference between price elasticities of demand in these two countries. Second, consumers seem to perceive mobile telephony as a substitute to fixed-line connection in France and as a complement in Germany. However, in a separate reduced-form estimation we do not find a significant effect of prices for fixed-line services on mobile prices in either country. Furthermore, the estimation results suggest that the share-fixing agreement in France could have slowed down subscriptions, but we fail to find that it had an adverse effect on prices

Subscription Choices and Switching Costs in Mobile Telephony

In this article, we estimate the price elasticities of demand for subscription and consumer switching costs for mobile telephony. We use a panel of Portuguese consumer level data to estimate a series of multinomial and mixed logit models. The demand for subscription is elastic. Switching costs are large. We use the structural model to perform several policy exercises. Switching costs and brand preferences are shown to be important elements of the market structure of mobile telephony. Price mediated network eects seem to be relatively less important

Banking failure prediction: a boosting classification tree approach

The recent financial crisis shows that failure of some financial institutions can cause other banks to fail and ultimately cause damage to the financial system worldwide. Eurozone banks that experienced either liquidity or solvency problems during the finan- cial markets turmoil were bailed out by their national governments with the financial support and supervision of the European Union. This paper applies the boosted classification tree methodology to predict failure in the banking sector and identifies four key scor- ecard variables that are worth tracking closely in order to anticipate and prevent bank financial distress. The data used in this study comprises 2006-2012 annual series of 25 financial ratios of 155 banks in the Eurozone. The findings indicate that the greater the size and the higher the income from non-operating items and net loans to deposits, the more likely is bank failure; conversely, the higher the Interbank ratio the lower the chances of bank financial distress. For the sake of their own financial soundness, banks should fund lending activities through clients' deposits and should avoid relying excessively on non-recurring sources of income

Healthy Competition to Support Healthy Eating? An Investigation of Fruit and Vegetable Pricing in UK Supermarkets

Governments and public health officials are urging the public to eat more fruits and vegetables to contribute to a healthy diet. However, there is concern that a lack of effective competition amongst supermarket retailers has resulted in inflated prices for these products which are deterring consumers from eating more of these healthy foods. We investigate this by examining the nature and extent of price competition for fresh fruits and vegetables amongst UK supermarket retailers, drawing on a panel of weekly retail and corresponding wholesale market prices over a seven-year period. We find that the extent of supermarket competition varies across the products, being quite intense on some but much weaker on others, where the retailers do not fully respond to each other's prices and where the extent of their competitive interaction varies significantly with each other

Consumer satisfaction with local retail diversity in the UK: effects of supermarket access, brand variety, and social deprivation

Levels of concentration in the grocery sector have led to concerns about reduced diversity of local retail provision and its potential negative effects on consumer welfare and choice. Using empirical evidence from a study of consumer perceptions of retail choice across nine purposefully sampled neighbourhoods in the city of Worcester in the UK, the paper illuminates consumer satisfaction with local provision and investigates how satisfaction varies with the local mix of grocery stores. The study adopts a stated-preference approach with realistic but hypothetical scenarios being presented to consumers in which the level, form, brand composition, and accessibility of local retail provision is systematically varied to gauge the sensitivity of householders in different types of neighbourhoods to variations in local retail assortments. The contributions of the paper are reflected in three main findings: (1) residents value having a large supermarket close by and reveal that they value diversity of provision rather than overconcentration; (2) consumers in deprived areas overall display greater satisfaction for the same offer than consumers in less deprived areas; and (3) although small stores in a local store assortment significantly contribute to reducing dissatisfaction with the local retail offer, they contribute little to achieving higher levels of consumer satisfaction. The study stresses the need for planners and policy makers to maximise choice and welfare through both the number and the diversity of stores in local neighbourhood areas

When Tony met Bobby

In June 1999, Wal-Mart intervened spectacularly in an agreed merger between Asda and Kingfisher by paying £6.7bn to takeover Asda outright. Reactions ranged dramatically; this was the death-knell of British retailing or the redemption of British consumers. Whatever the view, Wal-Mart buying a major retailer such as Asda, and in such a significant European market, was a landmark in the globalisation of retailing. One issue around this takeover attracted considerable speculation at the time and has been the focus of discussion specifically and generally. Some months previous to the takeover, a meeting apparently took place in Downing Street between the Prime Minister and Wal-Mart. The very fact this meeting occurred, and at that time, is intriguing. Secrecy surrounding the meeting increased speculation over the contents of any discussion. It was raised in Parliament and during investigations on retailing by the Select Committee on the Environment, Transport and Regional Affairs. Over time however the meeting has faded from public attention and consideration. Yet, it still remains potentially significant. The introduction from January 2005 of the Freedom of Information Act potentially opened a window on this previously ‘secret’ meeting. This commentary concerns the meeting itself and the use of the Freedom of Information Act to obtain information about it. It raises questions about lobbying, secrecy and retail change

Research into the Australian debt collection industry

This report examines the debt collection industry in Australia on behalf of the ACCC and its Consumer Consultative Committee. It aims to provide greater understanding of the industry and to identify structural issues or operational practices that may lead to problematic behaviours within the sector. This information will enable the ACCC to better address industry issues and respond to emerging trends in an effective way. &nbsp