• No results found

Entry in telecommunication : customer loyalty, price sensitivity and access prices

N/A
N/A
Protected

Academic year: 2022

Share "Entry in telecommunication : customer loyalty, price sensitivity and access prices"

Copied!
27
0
0

Laster.... (Se fulltekst nå)

Fulltekst

(1)

:RUNLQJ3DSHU1R

(QWU\LQ7HOHFRPPXQLFDWLRQ

&XVWRPHU/R\DOW\3ULFH6HQVLWLYLW\DQG

$FFHVV3ULFHV

E\

.MHOO(ULN/RPPHUXGDQG/DUV6¡UJDUG

352*5$0205c'(77(/(‘.2120,

'HQQHSXEOLNDVMRQHQLQQJnULHQVHULHDUEHLGVQRWDWHURJUDSSRUWHURPWHOH¡NRQRPLIUD 6WLIWHOVHQ IRU VDPIXQQV RJ Q ULQJVOLYVIRUVNQLQJ 61) +RYHGPnOVHWWLQJHQ PHG 61)V IRUVNQLQJVSURJUDP RP WHOH¡NRQRPL HU n VWXGHUH WHOHLQGXVWULHQV UHJXOHULQJVSURVHVVRJGH¡NRQRPLVNHRJRUJDQLVDWRULVNHNRQVHNYHQVHUDYHQGULQJHUL PDUNHG WHNQRORJLRJ UHJXOHULQJ3URJUDPPHW VRP VWDUWHW L HU Qn L VLQ WUHGMH SHULRGHVRPYDUHUIUHPWLOnUVVNLIWHW)RUVNQLQJVSURJUDPPHWHUIRUDQNUHWL 6HQWHU IRU ¡NRQRPLVN SROLWLNN 6HQWHU IRU HQHUJL RJ LQGXVWULHOO ¡NRQRPL 6HQWHU IRU VWUDWHJL RJ OHGHOVH RJ 6HQWHU IRU ILQDQVLHOO ¡NRQRPL YHG 61) 3URJUDPPHW HU ILQDQVLHUWDY7HOHQRU$6

61)SURMHFW1R

©'HUHJXODWLRQLQWHOHFRP1DWLRQDOPRQRSROLHVRUUHFLSURFDOGXPSLQJ"´

7KHSURMHFWLVILQDQFHGE\7HOHQRU)R8

)281'$7,21)255(6($5&+,1(&2120,&$1'%86,1(66$'0,1,675$7,21

%(5*(1129(0%(5 ,661

‹'HWWHHNVHPSODUHUIUHPVWLOWHWWHUDYWDOH PHG.23,1256WHQHUJDWH2VOR

<WWHUOLJHUHHNVHPSODUIUHPVWLOOLQJXWHQDYWDOH RJLVWULGPHGnQGVYHUNORYHQHUVWUDIIEDUW RJNDQPHGI¡UHHUVWDWQLQJVDQVYDU

(2)

(QWU\LQ7HOHFRPPXQLFDWLRQ

&XVWRPHU/R\DOW\3ULFH6HQVLWLYLW\DQG$FFHVV3ULFHV

.MHOO(ULN/RPPHUXG

'HSDUWPHQWRI(FRQRPLFV8QLYHUVLW\RI%HUJHQ )RVVZLQFNHOVJW1%HUJHQ1RUZD\

(PDLONMHOOHULNORPPHUXG#HFRQXLEQR

/DUV6¡UJDUG

'HSWRI(FRQRPLFV1RUZHJLDQ6FKRRORI(FRQRPLFVDQG%XVLQHVV$GPLQLVWUDWLRQ +HOOHYHLHQ1%HUJHQ1RUZD\

(PDLOODUVVRUJDUG#QKKQR

61)SURMHFW

'HUHJXODWLRQLQWHOHFRP1DWLRQDOPRQRSROLHVRUUHFLSURFDOGXPSLQJ"

$EVWUDFW

7HOHFRPPXQLFDWLRQV LV DQ LQGXVWU\ FKDUDFWHULVHG E\ KHDY\ LQYHVWPHQWV LQ LQIUDVWUXFWXUH+LVWRULFDOO\RQHILUPKDVW\SLFDOO\EHHQJUDQWHGDQDWLRQDOPRQRSRO\

5HFHQWO\ FRPSHWLWLRQ KDV EHHQ RSHQHG XS (QWUDQWV KDYH EHHQ DOORZHG WR XVH WKH H[LVWLQJ QHWZRUN LQIUDVWUXFWXUH DW D UHJXODWHG DFFHVV SULFH :H VWXG\ WKH ULYDOU\

EHWZHHQLQFXPEHQWVDQGHQWUDQWVXQGHUWZRGLVWLQFWW\SHVRIHQWU\1HZFRPHUHQWU\

DQGUHFLSURFDO HQWU\ 7KHODWWHU UHIHUV WR WKHVLWXDWLRQZKHUH WZR QHLJKERXULQJ ³ROG PRQRSROLHV´HQWHUHDFKRWKHU¶VPDUNHWV$TXHVWLRQWKDWLVJLYHQVSHFLDODWWHQWLRQLV ZKHQZHZRXOGH[SHFWPDUNHWVKDULQJW\SHFROOXVLRQLQWKHODWWHUFDVH

:H WKDQN 7HOHQRU IRU ILQDQFLDO VXSSRUW WKURXJK WKH )RXQGDWLRQ IRU 5HVHDUFK LQ (FRQRPLFVDQG%XVLQHVV$GPLQLVWUDWLRQ61)6¡UJDUGLVJUDWHIXOIRUWKHKRVSLWDOLW\

RIWKH'HSDUWPHQWRI(FRQRPLFVDWWKH8QLYHUVLW\RI&DOLIRUQLD6DQWD%DUEDUD DQG WKDQNVWKH1RUZHJLDQ5HVHDUFK&RXQFLODQGWKH861RUZD\)XOEULJKW)RXQGDWLRQ IRU(GXFDWLRQDO([FKDQJHIRUWUDYHOJUDQWV

(3)

,1752'8&7,21

7HOHFRPPXQLFDWLRQ ILUPV KDYH KLVWRULFDOO\ KHOG GRPLQDQW PDUNHW SRVLWLRQV LQ PRVW FRXQWULHV2QHLPSRUWDQWUHDVRQLVWKHHFRQRPLHVRIVFDOHLQWKHLQGXVWU\6LQFHHQWU\

RI QHZ ILUPV KDV EHHQ UHJDUGHG DV D FRVWLQHIILFLHQW VROXWLRQ RQH SURYLGHU KDV KLVWRULFDOO\RIWHQEHHQJUDQWHGDOHJDOPRQRSRO\7RPLQLPLVHH[SORLWDWLRQRIPDUNHW SRZHUWKLVGRPLQDQWVHUYLFHSURYLGHUKDVRIWHQIDFHGDUHVWULFWLYHUHJXODWRU\UHJLPH /DWHO\ WKRXJK WKH LQGXVWULDO VWUXFWXUH LQ WHOHFRP KDV FKDQJHG GUDPDWLFDOO\ 7KH LQGXVWU\ KDV EHHQ GHUHJXODWHG 0RVW LPSRUWDQWO\ QHZ ILUPV KDYH EHHQ SHUPLWWHG DFFHVVWRWKHGRPLQDQWILUP¶VQHWZRUN7KHSXUSRVHRIWKLVSDSHULVWRGLVFXVVKRZ VXFK GHUHJXODWLRQ PD\ FKDQJH WKH QDWXUH RI FRPSHWLWLRQ LQ WKH WHOHFRPPXQLFDWLRQ LQGXVWU\ ,Q SDUWLFXODU ZH VWXG\ WZR GLIIHUHQW NLQGV RI HQWU\ WULJJHUHG E\

GHUHJXODWLRQWKHHQWUDQWPD\EHDQHZFRPHUWRWKHLQGXVWU\QHZFRPHUHQWU\EXW ZHPLJKWDOVRKDYHWKDWLQFXPEHQWILUPVLQQHLJKERXULQJPDUNHWVHQWHUHDFKRWKHU¶V PDUNHWUHFLSURFDOHQWU\

7KHUH DUH VRPH LGLRV\QFUDWLF FKDUDFWHULVWLFV RI WKLV SDUWLFXODU LQGXVWU\ WKDW VKRXOGEHWDNHQLQWRDFFRXQWZKHQZHPRGHOWKHHIIHFWRIHQWU\7HOHFRPPXQLFDWLRQ VHUYLFHVVXFKDVWHOHSKRQHXVDJHDUHWRDODUJHH[WHQWDKRPRJHQRXVSURGXFW'HVSLWH WKLVLWLVQRWSODXVLEOHWRDVVXPHWKDWDOOWKHFRQVXPHUVXVHWKHILUPZLWKWKHORZHVW SULFH :H ZLVK WR PRGHOWKH IDFW WKDW VRPHFXVWRPHUV PLJKW KDUERXU EUDQG OR\DOW\

WRZDUGVWKHROGPRQRSROLVW0RUHSUHFLVHO\ZHDVVXPHWKDWVRPHFXVWRPHUVGRQRW WDNHSULFHGLIIHUHQFHVLQWRDFFRXQWZKHQFKRRVLQJVXSSOLHUDQGWKDWDPDMRULW\RI WKHVHZLOOFKRRVHWKHLQFXPEHQWUDWKHUWKDQWKHHQWUDQW:HIXUWKHUDVVXPHWKHODUJHU WKHSULFHGLIIHUHQFHEHWZHHQWKHILUPV¶SURGXFWVWKHODUJHUWKHQXPEHURIFRQVXPHUV WKDWVZLWFKHVWRWKHORZSULFHSURGXFHU7RFDSWXUHWKHVHGHPDQGFKDUDFWHULVWLFVZH

(4)

H[WHQG D PRGHO ILUVW LQWURGXFHG LQ $OOHQ DQG 7KLVVH DV ZH ZLOO UHWXUQ WR VKRUWO\

6HFRQG WKHUH DUH DV\PPHWULHV RQ WKH FRVW VLGH 7KH ROG PRQRSROLVW KDV W\SLFDOO\ LQYHVWHG LQ LQIUDVWUXFWXUH :H IRFXV RQ WKH FDVH ZKHUH GXSOLFDWLRQ RI WKH LQIUDVWUXFWXUH LV SURKLELWLYHO\ H[SHQVLYH VR WKH HQWUDQW QHHGV DFFHVV WR WKLV LQIUDVWUXFWXUH WR EH DEOH WR VHUYH FRQVXPHUV 7KH FRVW DV\PPHWU\ EHWZHHQ WKH WZR ILUPVDULVHVEHFDXVHWKHHQWUDQWLVFKDUJHGDQDFFHVVSULFHZKLFKW\SLFDOO\ H[FHHGV WKHPDUJLQDOFRVWVIDFHGE\WKHLQFXPEHQW:HDVVXPHWKDWWKLVDFFHVVSULFHLVVHWE\

VRPHUHJXODWRU\DJHQF\

$VPHQWLRQHGZHZLOOGLVWLQJXLVKEHWZHHQWZRGLIIHUHQWHQWU\VFHQDULRV7KH HQWUDQWPD\EHDQHZFRPHUWRWKHLQGXVWU\EXWDOVRDSUHYLRXVPRQRSROLVWLQVRPH QHLJKERXULQJPDUNHW 7KH LQWHUHVWLQJ GLVWLQFWLRQ LV WKDW ZKHQ WKH HQWUDQW LV D QHLJKERXU PRQRSROLVW WKH PRQRSROLVW XQGHU DWWDFN FDQ UHWDOLDWH E\ HQWHULQJ WKH HQWUDQWVKRPHPDUNHW&ROOXVLRQXQGHUPXOWLPDUNHWFRQWDFWWKHQEHFRPHVDQLVVXH

,QWKHILUVWFODVVLFDOHQWU\JDPHZHILQGWKDWWKH HQWUDQWPLJKWVHWDKLJKHU SULFH WKDQ WKH LQFXPEHQW HYHQ LI KH KDV D FRVW GLVDGYDQWDJH 7KLV LV WUXH LI D VXIILFLHQWO\ODUJHIUDFWLRQRIWKHFRQVXPHUVDUHOR\DOWRWKHLQFXPEHQWZKHQWKHWZR ILUPVVHWLGHQWLFDOSULFHV7KHLQFXPEHQW¶VEHVWFKRLFHLVWKHQWRVHWDKLJKSULFHDQG VHUYHLWVOR\DOFRQVXPHUVUDWKHUWKDQVHWDORZHUSULFHDQGILJKWIRUWKHSULFHVHQVLWLYH FRQVXPHUV0RUHRYHUZHILQGWKDWDGYHUWLVLQJE\WKHLQFXPEHQWKDVDQDPELJXRXV HIIHFW RQ WKH HQWUDQW¶V GHFLVLRQ WR HQWHU RU QRW $ ODUJHU IUDFWLRQ RI WKH WRWDO FRQVXPHUVWKDWDUHOR\DOWRWKHLQFXPEHQWWHQGVWRGHWHUHQWU\ZKLOHOHVVSULFHULYDOU\

GXHWRPRUHOR\DOFRQVXPHUVLQJHQHUDOWHQGVWRDWWUDFWHQWU\)LQDOO\ZHILQG±DVRQH LQWXLWLYHO\ H[SHFWV± WKDW KLJKHU SULFH VHQVLWLYLW\ OHDGV WRWRXJKHU SULFH FRPSHWLWLRQ WKDWPD\GHWHUHQWU\

(5)

,Q WKH VHFRQG HQWU\ JDPH ZKHUH SRWHQWLDO HQWU\ LV UHFLSURFDO UHVXOWV DUH GLVWLQFWO\GLIIHUHQWLQPDQ\UHVSHFWV7KHUHDVRQLVWKDWLQWKLVVHWWLQJLWLVQRWVLPSO\D TXHVWLRQ ZKHWKHU D ILUP HQWHUV D PDUNHW RU QRW EXW ZKHWKHU WKH ILUP HQWHUV WKH QHLJKERXULQJ PDUNHW DQG WKHQ WULJJHUV UHFLSURFDO HQWU\ $ NH\ TXHVWLRQ EHFRPHV XQGHUZKDWFLUFXPVWDQFHVPXOWLPDUNHWFROOXVLRQRIWKHIRUPWKDWHDFKILUPVWD\VLQ LWVRULJLQDOKRPHPDUNHWFDQEHVXVWDLQHG+LJKHUSULFHVHQVLWLYLW\VLPXOWDQHRXVO\

LQERWKPDUNHWVPD\GHWHUHQWU\DQGWKXVSURPRWHFROOXVLRQ7KHRSSRVLWHLVWUXHLI SULFHVHQVLWLYLW\JRHVXSRQO\LQRQHPDUNHW0RUHRYHUZHILQGWKDWDGYHUWLVLQJWKDW DIIHFWV WKH IUDFWLRQ RI WKH FRQVXPHUV WKDW DUH OR\DO WR WKH LQFXPEHQW SURPRWHV FROOXVLRQLIERWKILUPVXQGHUWDNHLWDQGPD\WULJJHUUHFLSURFDOHQWU\LIRQO\RQHRIWKH ILUPVXQGHUWDNHVLW

2XU EDVLF PRGHO VKDUHV VRPH VLPLODULWLHV ZLWK VZLWFKLQJ FRVW PRGHOV

&RQVXPHUV DUH LQLWLDOO\ DOORFDWHG WR HLWKHU WKH LQFXPEHQW RU WKH HQWUDQW DQG IRU LGHQWLFDO SULFHV WKH HQWUDQW¶V PDUNHW VKDUH LV HLWKHU HTXDO WR RU ORZHU WKDQ WKH LQFXPEHQW¶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

7KHLU PRGHO LV FORVHO\ UHODWHG WR .OHPSHUHU )RU DQ H[SODQDWLRQ RI WKH GLIIHUHQFHV EHWZHHQ WKRVH WZR PRGHOV VHH :DQJ DQG :HQ $OWKRXJK WKH UHIHUUHG VWXG\ LV WKH RQH PRVW FORVHO\

UHODWHGWRRXUVWKHUHDUHDOVRQXPHURXVRWKHUV)RUDVXUYH\RIWKHOLWHUDWXUHVHH.OHPSHUHU

(6)

GHSHQG XSRQ WKH SULFH GLIIHUHQFH EHWZHHQ WKH WZR ILUPV 6HFRQG WKH\ DVVXPH VHTXHQWLDOSULFHVHWWLQJZKLOHZHDVVXPHVLPXOWDQHRXVSULFHVHWWLQJ7KLUGWKH\±DV ZHOO DV RWKHU VZLWFKLQJ FRVW PRGHOV ± LQYHVWLJDWH RQO\ ZKDW ZH KDYH ODEHOOHG WKH FODVVLFDOHQWU\JDPH+HUHWKHFODVVLFDOHQWU\JDPHLVSDUWLDOO\DSUHUHTXLVLWHWRVWXG\

WKHSRWHQWLDOIRUUHFLSURFDOHQWU\DQGPXOWLPDUNHWFROOXVLRQ

7KHYHUVLRQRIRXUPRGHOZLWKSRWHQWLDOIRUUHFLSURFDOHQWU\LVFORVHO\UHODWHG WRVRPHPRGHOVRQFROOXVLRQ,QSDUWLFXODURXUPRGHOVKDUHVPDQ\VLPLODULWLHVZLWK /RPPHUXGDQG6¡UJDUG,QWKDWSDUWLFXODUPRGHOZHDQDO\VHGDPXOWLPDUNHW KRPRJHQRXVJRRGVGXRSRO\ZLWKHLWKHU&RXUQRWRU%HUWUDQGFRPSHWLWLRQ,QFRQWUDVW LQWKLVPRGHOWKHVWDUWLQJSRLQWLVWKHPRGHOILUVWSUHVHQWHGLQ$OOHQDQG7KLVVH DSULFHVHWWLQJPRGHOZKHUHQRWDOOFRQVXPHUVVZLWFKHVWRWKHORZSULFHILUP,WWXUQV RXWWKDWODFNLQJSULFHVHQVLWLYLW\DQGFXVWRPHUOR\DOW\WRZDUGVWKHLQFXPEHQWFUXFLDOO\

PDWWHUIRUUHVXOWVDERXWZKHQPXOWLPDUNHWFROOXVLRQFDQEHVXVWDLQHG

7KHDUWLFOHLVRUJDQLVHGDVIROORZV,QWKHQH[WVHFWLRQZHSUHVHQWWKHPRGHO VWUXFWXUH,QVHFWLRQZHDQDO\VHWKHHIIHFWVRIHQWU\JLYHQWKDWWKHLQFXPEHQWDQGWKH HQWUDQWFRPSHWHQRQFRRSHUDWLYHO\LQWKHSRVWHQWU\JDPH,QVHFWLRQZHH[DPLQHD FHUWDLQ NLQG RI FROOXVLRQ ZKHUH HQWU\ LQ D QHLJKERXULQJ PDUNHW WULJJHUV UHFLSURFDO HQWU\ LQ RQHV RZQ PDUNHW IURP WKH ILUP WKDW H[SHULHQFHV LQWUXVLRQ LQ KLV KRPH PDUNHW,QVHFWLRQZHVXPPDULVHRXUUHVXOWVDQGZHKLQWDWVRPHLPSOLFDWLRQVIRU SXEOLFSROLF\

7+(02'(/

&RQVLGHU DQ LQGXVWU\ ZKHUH RQH ILUP DW SUHVHQW LV D PRQRSROLVW DQG D VHFRQG ILUP FRQVLGHUVWRHQWHU:HDVVXPHWKHIROORZLQJUHFWDQJXODUGHPDQGIXQFWLRQ

4 LI3ˆ3DQG4 LI3!3

(7)

7KHQ REYLRXVO\ DQ XQWKUHDWHQHG PRQRSROLVW VHWV 3= 3 DQG HDUQV D JURVV SURILW 3

=

p

,IERWKILUPVDUHDFWLYHZHDSSO\WKHGHPDQGV\VWHPLQWURGXFHGLQ$OOHQDQG 7KLVVH 7KH ILUPV DUH SULFH VHWWHUV ,I WKH ILUPV VHW DQ LGHQWLFDO SULFH FRQVXPHUV EX\ HLWKHU IURP WKH LQFXPEHQW RU WKH HQWUDQW $ IUDFWLRQ ±V RI WKH FRQVXPHUVFKRRVHVWKHVHUYLFHVRIWKHLQFXPEHQWILUPDIUDFWLRQVLVVHUYHGE\WKH HQWUDQW$OOHQDQG7KLVVHVHWVHTXDOWRòLPSO\LQJWKDWZLWKLGHQWLFDOSULFHV FRQVXPHUVDUH VSOLW HYHQO\ EHWZHHQ WKHILUPV :H WKLQN WKDWLQ PDQ\ FRQWH[WV LW LV QDWXUDOWRDVVXPHWKDWWKHLQFXPEHQWKDVEXLOWXSVRPHEUDQGQDPHOR\DOW\VRWKDW ZKHQ SULFHV DUH LGHQWLFDO FXVWRPHUV RYHUSURSRUWLRQDOO\ FKRRVH WKH LQFXPEHQW :H FRQVHTXHQWO\DVVXPHWKDWVˆò7KHFDVHZKHUHV“LVWKHRQHZKHUHDOPRVW DOO WKH FRQVXPHUV DUH VHUYHG E\ WKH LQFXPEHQW ZKHQ WKH WZR ILUPV¶ SULFHV DUH LGHQWLFDO

:KHQSULFHVGLIIHUDIUDFWLRQRIWKHFRQVXPHUVZRXOGUDWKHUEHLQJVHUYHGE\

WKH ORZSULFH ILUP WKDQWKH KLJKSULFH ILUP ,IIRU H[DPSOH WKH HQWUDQW LV WKH KLJK SULFHILUPLWZRXOGWKHQVHOOOHVVWKDQDIUDFWLRQVRIWKHWRWDOVDOH7KHODUJHUWKH SULFHGLIIHUHQFHWKHODUJHUWKHIUDFWLRQRIFRQVXPHUVWKDWZRXOGSUHIHUEHLQJVHUYHG E\WKHORZSULFHILUP/HWWKHSDUDPHWHUa³SULFHVHQVLWLYLW\´GHQRWHWKHWHQGHQF\

IRUFRQVXPHUVWRQRWLFHSULFHGLIIHUHQFHVDQGWKHUHE\WRFKRRVHEHLQJVHUYHGE\WKH ORZSULFHILUP$KLJKaLPSOLHVWKDWWKHIUDFWLRQRIWKH FRQVXPHUVWKDW DUH SULFH FRQFHUQHGLVODUJH:HOHWVXSHUVFULSWV,DQG(GHQRWHWKHLQFXPEHQWDQGWKHHQWUDQW UHVSHFWLYHO\7KHLQFXPEHQW¶VGHPDQGV\VWHPLVWKHIROORZLQJ

(8)

ßß ßß ßß ß

à Þ

ÏÏ ÏÏ ÏÏ Ï

Ð Î

ˆ +

=

+

ˆ

ˆ - ÜÝ

Ì Û Í

Ë -

+ -

=

-

ˆ

=

, (

,

( , , (

, (

( , ,

3 3 3 V LI 4

3 3 V 3 3

3 V 3 LI

3 V 3

4

3 3 V 3 LI 4

a

a a a

a

7KHHQWUDQW¶VGHPDQGV\VWHPFDQEHIRUPXODWHGDQDORJRXVO\,QZRUGVWKHLQFXPEHQW KDVDEDVHGHPDQGVWKDWFDQEHWDNHQDVDPHDVXUHRIFXVWRPHUOR\DOW\,IWKH LQFXPEHQW VWDWHV D ORZHU SULFH WKDQ WKH HQWUDQW WKLV ZLOO LPSO\ WKDW WKH LQFXPEHQW VWHDOVDZD\VRPHFXVWRPHUVIURPWKHHQWUDQWVEDVHGHPDQG,QOLQHZLWKDQH[DPSOH LQ$OOHQDQG7KLVVHZHDVVXPHWKDWWKHJDLQLQGHPDQGLVSURSRUWLRQDOWRWKH UHODWLYHSULFHGLIIHUHQFHZLWKaDVWKHIDFWRURISURSRUWLRQDOLW\,QWKHHQGWKHSULFH GLIIHUHQFH LV VR ODUJH WKDW WKH LQFXPEHQW KDV FDSWXUHG WKH ZKROH PDUNHW ,I WKH LQFXPEHQWVWDWHVWKHKLJKHUSULFHLWZLOOORVHFXVWRPHUVIURPLWVEDVHGHPDQGDJDLQ DW D UDWH SURSRUWLRQDO WR WKH SULFH GLIIHUHQFH VWLOO ZLWK a DV WKH IDFWRU RI SURSRUWLRQDOLW\1DWXUDOO\DWVRPHSRLQWWKHZKROH EDVHGHPDQG LV ORVW VRWKDW WKH LQFXPEHQWLVOHIWZLWK]HURGHPDQG

(DFK ILUP SURGXFHV ZLWK D FRQVWDQW UHWXUQV WR VFDOH WHFKQRORJ\ VR DYHUDJH FRVWHTXDOVPDUJLQDOFRVWDQGWKLVFRVWLVQRUPDOLVHGWR]HUR7KHLQFXPEHQWRSHUDWHV DQHWZRUN7KHHQWUDQWFDQQRWVHUYHWKHFRQVXPHUVZLWKRXWDFFHVVWRWKHLQFXPEHQW¶V QHWZRUN7KHLQFXPEHQW¶VPDUJLQDOFRVWLQWKHQHWZRUNLVQRUPDOLVHGWR]HURZKLOH WKH HQWUDQW¶V SHU XQLW SROLWLFDOO\ GHWHUPLQHG DFFHVV SULFH LV GHQRWHGW:H DVVXPH WKDWW3,IW!3WKHDFFHVVFRVWLVSURKLELWLYHO\KLJKLQWKHVHQVHWKDWWKHSHU XQLWDFFHVVFRVWH[FHHGVWKHPRQRSRO\SULFH)XUWKHUPRUHOHW)GHQRWHWKHHQWUDQW¶V IL[HGHQWU\FRVW

(9)

&RQVLGHUWKH1DVKHTXLOLEULXPIROORZLQJHQWU\7KHLQFXPEHQWKDVWKHFKRLFH EHWZHHQDGHWHUUHQFHDQGDQDFFRPRGDWLRQVWUDWHJ\:HH[DPLQHWKHWZRSRVVLELOLWLHV VHSDUDWHO\

7KHLQFXPEHQWWKHORZFRVWSURGXFHUFDQDOZD\VFDSWXUHWKHZKROHPDUNHW E\ VHWWLQJ D VXIILFLHQW ORZ SULFH )URP ZH VHH WKDW E\ VHWWLQJ

a 3 W V 3(, = -

WKH HQWUDQW KDV ]HUR VDOHV ZKHQ LW VHWV LWV SULFH HTXDO WR LWV PDUJLQDO FRVW W 7KH LQFXPEHQWZRXOGWKHQXQGHUGHWHUUHQFHHDUQ

p(, =W- Va3

$OWHUQDWLYHO\WKHLQFXPEHQWFDQVHWDKLJKHUSULFHDQGDOORZ WKH HQWUDQWWR VHOO D SRVLWLYH TXDQWLW\ :H KDYH WKH IROORZLQJ PD[LPLVDWLRQ SUREOHPV IRU WKH WZR ILUPVJLYHQWKDWWKHHQWUDQW¶VHQWU\FRVW)LVVXQNFRVWDQGWDNLQJLQWRDFFRXQWWKDW ERWKGHWHUUHQFHDQGDFFRPPRGDWLRQDUHSRVVLELOLWLHV

ßß

à Þ ÏÏ

Ð Î

ÜÜÝÛ ÌÌÍË

ÜÝ Ì Û

Í

Ë -

+ -

= 3

3 V 3

3 PD[

PD[ , ( ,

3, ,

, p a

p ( IRUˆ 3, ˆ3DQGW ˆ3( ˆ3

( )

ßß à Þ ÏÏ

Ð Î

ÜÜÝÛ ÌÌÍË

ÜÝ Ì Û

Í

Ë -

+ -

= 3

3 V 3

W 3 PD[

PD[ ( , (

3(

( a

p IRUˆ 3, ˆ3Wˆ 3( ˆ3

)LUVW OHW XV FRQVLGHU DQ LQWHULRU VROXWLRQ ZKHUH ERWK ILUPV VHOO SRVLWLYH TXDQWLWLHV )URPWKHWZRILUPV¶ILUVWRUGHUFRQGLWLRQVZHKDYHWKHIROORZLQJLQWHULRUVROXWLRQ

( )

ßà Ï Þ

Ð

Î - +

= a

a

W 3 V 3 PLQ ,

( )

ßà Ï Þ

Ð

Î + +

= a

a

W 3 V 3 PLQ (

)URPDQGLWFDQEHIRXQGWKDWL < 3ZKHUHL ,(LI

( ) ( )

/

W 3

3 V W 3

3 V

PD[ a

a ߟ

à Ï Þ

Ð Î

- + -

> -

(10)

7KHILUVWH[SUHVVLRQLQVLGHWKHEUDFNHWLVIURPZKLOHWKHVHFRQGLVIURP:H IRFXVRQWKHFDVHZKHUHHQWU\UHVXOWVLQORZHUSULFHV,QOLQHZLWKWKLVZHDVVXPHWKDW

a/

a >

,IWKHSULFHVH[SUHVVHGLQDQGDUHVHWZHKDYHWKHIROORZLQJLQGLYLGXDO ILUPJURVVSURILWIRUHDFKRIWKHILUPV

[ ( ) ]

3

W 3 V

Ö,

a p = - +a

[ ( ) ]

3

W 3 V

Ö(

a p = + -a

)URPLWFDQEHVHHQWKDWWKHHQWUDQWZLOOVHWHDUQSRVLWLYHJURVVSURILWV3( >WLI

( )

+

W 3 V

a

a < + Ÿ

6HFRQGOHWXVFRQVLGHUDVROXWLRQZKHUHWKHLQFXPEHQWFRQWLQXHVWRVHUYHWKH WRWDOPDUNHWHYHQDIWHUHQWU\,WZRXOGVHW3, 3(,

= LIp(, >pÖ, 6ROYLQJZLWKUHVSHFWWR aZHKDYHWKDWp(, >pÖ, LI

&

( ) ( )

'

W 3 V W

3 V

a a

a Ÿ + < < + Ÿ

%\ FRPSDULQJ DQG ZH VHH WKDWa& =a+ 7KLV LPSOLHV WKDW DV ORQJ DV a+

a < WKHLQFXPEHQWGHFLGHVQRWWRVHUYHWKHHQWLUHPDUNHWDIWHU HQWU\ 7KHQ WKH HTXLOLEULXPSULFHVDUHWKHRQHJLYHQE\DQG,QZKDWIROORZVZHDVVXPHWKDW

+

/ a a

a < < 7KHQ 3L = L < 3DQG 4L ! LQ WKH SRVW HQWU\ HTXLOLEULXP JDPH ZKHUHL ,(

(11)

1(:&20(5(175<

/HWXVFRQVLGHUWKHSRWHQWLDOIRUHQWU\E\DQHQWUDQWWKDWLVDQHZFRPHUWRWKHLQGXVWU\

7KLVPLJKWEHRILQWHUHVWLQLWVHOIEXWDOVRVHUYHVDVDVWHSSLQJVWRQHIRUWKHDQDO\VLV RIWKHPRUHFRPSOLFDWHGHQWU\JDPHZKHUHWKHHQWUDQWLVDQLQFXPEHQWPRQRSROLVWLQ VRPHQHLJKERXULQJPDUNHW)LUVWFRQVLGHUWKHPDUNHWHTXLOLEULXPWKDWZLOOHPHUJHLI WKHHQWUDQWKDVVXQNWKHHQWU\FRVWV)

3URSRVLWLRQ3RVWHQWU\HTXLOLEULXPSULFHV

L ,IV

V 3

W

3 -a Ÿ ZKHUHV³>ò@WKHQ3Ö,!3Ö(

LL L <

›

›

a ZKHUHL ,(DQG

LLL

V , <

›

› DQG

V ( >

›

›

3URRI&RQFHUQLQJLLWFDQHDVLO\EHVHHQIURPDQGWKDW( > ,ZKHQV ò DQG ( <, ZKHQ V“ %\ FRPSDULVRQ ZH KDYH WKDW ( >, LI WKH FRQGLWLRQ VKRZQLQWKH3URSRVLWLRQLVPHW

&RQFHUQLQJLLDQGLLLLWIROORZVLPPHGLDWHO\IURPGLIIHUHQWLDWLRQRIDQG 4('

:HVHHIURPSDUWLRIWKH3URSRVLWLRQWKDWLIVLVVXIILFLHQWO\ORZWKHLQFXPEHQWVHWV DKLJKHUSULFHWKDQWKHHQWUDQW7KLVKDSSHQVGHVSLWHWKHIDFWWKDWWKHLQFXPEHQWLVWKH ORZFRVWILUP2EYLRXVO\WKHFKDUDFWHULVWLFVRQWKHGHPDQGVLGHH[SODLQWKHRXWFRPH /RZV LPSOLHV WKDW WKH LQFXPEHQW KDV D KLJK EDVH GHPDQG RI OR\DO FXVWRPHUV %\

ORZHULQJ LWV SULFHWR FDSWXUHSULFH FRQFHUQHG FRQVXPHUV WKH LQFXPEHQW ZRXOG ORVH

(12)

UHYHQXHRQLWVOR\DOFRQVXPHUV7KLVUHVXOWLVDQDORJRXVWRWKHUHVXOWIRXQGLQ:DQJ DQG :HQ (YHQ WKRXJK RXU PRGHO LV TXLWH GLIIHUHQW IURP WKDW RI :DQJ DQG :HQ ZH H[SHFW WKDW WKH UHVXOW WKDW FXVWRPHU OR\DOW\ PRGHOOHG LQ VRPH ZD\ RU DQRWKHUFDQEULQJDWKHORZFRVWSURGXFHUWRVHWWKHKLJKHVWSULFHZLOOVKLQHWKURXJK LQPDQ\PRGHOIRUPDWV

1RWHIURPSDUWLLRIWKH3URSRVLWLRQWKDWSULFHVDUHGHFUHDVLQJLQa7KLVLV TXLWHREYLRXV$KLJKHUaPHDQVWKDWFRQVXPHUVDUHEHFRPLQJPRUHSULFHVHQVLWLYH ,WLVZHOONQRZQWKDWLQDQRQFROOXVLYHVHWWLQJWKLVWULJJHUVPRUHULYDOU\RQSULFHV

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

3URSRVLWLRQ3RVWHQWU\SURILWV L L <

›

› a

p ZKHUHL ,(

LL >

›

› V(

p DQG

LLL

V, <

›

›p

3URRI,WFDQHDVLO\EHYHULILHGIRUa/ <a <a+IURPGLIIHUHQWLDWLRQRIDQG 4('

(13)

3DUWLLQWKH3URSRVLWLRQLVVWUDLJKWIRUZDUG$QLQFUHDVH LQa LQWHQVLILHVWKHSULFH ULYDOU\EHWZHHQWKHILUPVDQGERWKILUPVORVH

1RWH IURP SDUW LL RI WKH 3URSRVLWLRQ WKDW DQ LQFUHDVH LQ WKH LQFXPEHQW¶V QXPEHURIOR\DOFRQVXPHUVUHGXFHV WKHHQWUDQW¶VSURILW 2EYLRXVO\D UHVKXIIOLQJRI FRQVXPHUVIURPWKHHQWUDQWWRWKHLQFXPEHQWZRXOGWHQGWRUHGXFHWKHHQWUDQW¶VSURILW 7KLVLVDGLUHFWHIIHFWRIDUHGXFWLRQLQV7KHUHLVKRZHYHU DQLQGXFHGHIIHFWWKDW UXQVFRQWUDU\WRWKLV$ODUJHUQXPEHURIOR\DOFRQVXPHUVHQFRXUDJHVWKHLQFXPEHQW WR VHW D KLJKHU SULFH 7KLV GDPSHQV WKH VKLIW RI FRQVXPHUV IURP WKH HQWUDQW WR WKH LQFXPEHQW3URSRVLWLRQVKRZVWKDWWKHGLUHFWHIIHFWGRPLQDWHV7KHHQWUDQWHDUQVD ORZHUSURILWDVDUHVXOWRIDUHGXFWLRQLQV

3DUWLLLRIWKH3URSRVLWLRQWHOOVXVWKDWWKHLQFXPEHQWJDLQVIURPKDYLQJPRUH OR\DOFRQVXPHUV7KLVLVWUXHHYHQLIWKHHQWUDQWDVZHFDQVHHIURP3URSRVLWLRQ UHVSRQGVWRORZHUVE\VHWWLQJDORZHUSULFH,WLPSOLHVDJDLQWKDWWKHGLUHFWHIIHFWD ODUJHU QXPEHU RI OR\DO FRQVXPHUV RXWZHLJKV WKH LQGXFHG HIIHFW PRUH DJJUHVVLYH ULYDO

6R IDU ZH KDYH IRFXVHG RQ WKH FDVH ZKHUH HQWU\ LV D JLYHQ IDFW 6LQFH WKH LQFXPEHQWE\GHILQLWLRQLVSUHVHQWLQWKHPDUNHWEHIRUHWKHSRWHQWLDOHQWUDQWGHFLGHVWR HQWHURUQRWLWLVLQWHUHVWLQJWRVWXG\KRZFKRLFHVPDGHE\WKHLQFXPEHQWSULRUWRWKH SRWHQWLDOHQWUDQW¶VHQWU\GHFLVLRQFDQLQIOXHQFHWKHODWHURXWFRPH6XFKSULRUFKRLFHV FDQLQIOXHQFHODWHURXWFRPHVERWKLQWKHGHWHUUHQFHFDVHDQGLQWKH DFFRPPRGDWLRQ FDVH+HUH ZH IRFXV RQ WKH LQFXPEHQWV SRVVLELOLW\ WR LQYHVWPHQW LQ EXLOGLQJ EUDQG QDPHOR\DOW\WKURXJKDGYHUWLVLQJ$GYHUWLVLQJLVWDNHQWRLQFUHDVHWKHLQFXPEHQWV OR\DOFXVWRPHUEDVHWKDWLVWRUHGXFHV)RUDQ\JLYHQSULFHGLIIHUHQFHWKHQXPEHURI FRQVXPHUVVHUYHGE\WKHLQFXPEHQWWKHQLQFUHDVHVZLWKDGYHUWLVLQJ$QRWKHUSRVVLEOH HIIHFWRIDGYHUWLVLQJFRXOGEHWKDWFRQVXPHUVIRFXVPRUHRQQRQSULFHLVVXHV7KLVLV

(14)

LQRXUPRGHOFDSWXUHGE\DUHGXFWLRQLQa$VORQJDVWKHPDMRULW\RIFRQVXPHUVWKDW GRQRWDFWRQSULFHGLIIHUHQFHVEX\IURPWKHLQFXPEHQWWKLVFRXOGDOVREHSURILWDEOH IRUWKHLQFXPEHQW

:HDVVXPHDGYHUWLVLQJ LVFRVWOHVV :HDOVR DVVXPHWKDW RQO\ WKH LQFXPEHQW FDQ LQIOXHQFH WKH GHPDQG VWUXFWXUH WKURXJK DGYHUWLVLQJ VLPSO\ EHFDXVH WKLV ILUP LQLWLDOO\LVWKHRQO\RQHSUHVHQWLQWKHPDUNHW,IDQHQWUDQWDOVRFRXOGXVHDGYHUWLVLQJ ZHZRXOGH[SHFWVXFKDGYHUWLVLQJ WRUHGXFH FXVWRPHU OR\DOW\ WR WKHLQFXPEHQW$V UHJDUGVSULFHVHQVLWLYLW\WKRXJKZHH[SHFWHQWUDQWDGYHUWLVLQJWRKDYHWKHVDPHHIIHFW DVLQFXPEHQWDGYHUWLVLQJ

3URSRVLWLRQIROORZVVWUDLJKWIRUZDUGO\IURP3URSRVLWLRQ

3URSRVLWLRQ7KHLQFXPEHQW¶VDGYHUWLVLQJVWUDWHJ\

L ,IDGYHUWLVLQJE\WKHLQFXPEHQWUHGXFHVVWKHQRYHULQYHVWPHQWLQDGYHUWLVLQJ LVWKHRSWLPDOVWUDWHJ\ERWKXQGHUDFFRPPRGDWLRQDQGGHWHUUHQFH

LL ,IDGYHUWLVLQJE\WKHLQFXPEHQWUHGXFHVaWKHQRYHULQYHVWPHQWLVWKHRSWLPDO DFFRPPRGDWLRQ VWUDWHJ\ DQG XQGHULQYHVWPHQW LV WKH RSWLPDO GHWHUUHQFH VWUDWHJ\

LLL ,I DGYHUWLVLQJ E\ WKH LQFXPEHQW UHGXFHV a DQG V WKHQ WKH LQFXPEHQW RYHULQYHVWV LI DFFRPPRGDWLRQ LV WKH FKRVHQ VWUDWHJ\ DQG HLWKHU RYHU RU XQGHULQYHVWLIWKHGHWHUUHQFHVWUDWHJ\KDVEHHQFKRVHQ

,QWKHFDVHRIDFFRPPRGDWLRQWKHLQFXPEHQW¶VVWUDWHJ\LVREYLRXV,WVKRXOGLQYHVWLQ DGYHUWLVLQJ WR L LQFUHDVH WKH QXPEHU RI OR\DO FRQVXPHUV DQGRU LL WR PDNH WKH

1RWHWKDWDGYHUWLVLQJFRXOGDOVRUHVXOWLQWRXJKHUSULFHULYDOU\7KHUHDVRQLVWKDWDGYHUWLVLQJZRXOG PDNHFRQVXPHUVDZDUHRIPRUHSURGXFWVDQGWKHILUPVZRXOGWKHQFRPSHWHPRUHILHUFHO\RQSULFHVWR DWWUDFW FRQVXPHUV )RU H[DPSOH *URVVPDQ DQG 6KDSLUR SUHVHQWV D PRGHO ZKHUH DGYHUWLVLQJ UHVXOWLQORZHUSULFHV

(15)

FRQVXPHUV OHVV SULFH VHQVLWLYH ZKLFK LQ WXUQ HQFRXUDJHV WKH ILUPV WR VHW D KLJKHU SULFHWKDQZKDWWKH\HOVHZRXOGKDYHGRQH

,I WKH LQFXPEHQW DQWLFLSDWH WKDW LW ZLOO GHFLGH WR GHWHU HQWU\ WKRXJK WKLV VWUDWHJ\ PD\ QRW EH WKH ULJKW RQH $GYHUWLVLQJ WKDW UHVXOWV LQ OHVV SULFH VHQVLWLYH FRQVXPHUV ORZHUa LPSOLHVD IULHQGO\ ZHOFRPHLQ WKH PDUNHWIRU WKH HQWUDQW 7R GHWHUHQWU\WKHLQFXPEHQWPD\WKHQLQVWHDGXQGHULQYHVWLQWKLVW\SHRIDGYHUWLVLQJ

*LYHQWKDWa LVORZLWZRXOGEHUDWLRQDOWRUHVSRQGWRHQWU\E\VHWWLQJDORZSULFH ZKLFKZRXOGKHOSGHWHUHQWU\

+RZHYHU LI DGYHUWLVLQJ EDVLFDOO\ JHWV \RX PRUH OR\DO FXVWRPHUV ORZHUVV WKLVUHGXFHVWKHHQWUDQWVVDOHDWDJLYHQSULFH7KLVSRLQWVWRZDUGVRYHULQYHVWPHQWWR GHWHU HQWU\ )XGHQEHUJ DQG 7LUROH KDYH IDPRXVO\ VWXGLHG KRZ LQYHVWPHQW GHFLVLRQVLQIOXHQFHULYDOVDFWLRQV,QWKHLUWHUPLQRORJ\WKHUHVXOWDERYHWKDWDQHQWU\

GHWHUULQJLQFXPEHQWVKRXOGXQGHULQYHVWLQWKDWW\SHRIDGYHUWLVLQJWKDWUHGXFHVSULFH VHQVLWLYLW\ LV DQ H[DPSOH RI D OHDQDQGKXQJU\ORRN VWUDWHJ\ 7KH UHVXOW WKDW RYHULQYHVWPHQWGHWHUVHQWU\LIDGYHUWLVLQJEDVLFDOO\LQIOXHQFHVFXVWRPHUOR\DOW\LVDQ H[DPSOHRIDWRSGRJVWUDWHJ\

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

$VLPLODUUHVXOWLVIRXQGLQ6FKPDOHQVHH

(16)

H[SHFW7KLVFRXOGEHDSRWHQWLDOSUREOHPLIWKHLQFXPEHQW¶VLQFHQWLYHVWRPDLQWDLQ WKHLQIUDVWUXFWXUHLVUHGXFHG

5(&,352&$/(175<$1'&2//86,21

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

:LWK VXVWDLQHG FROOXVLRQ HDFK ILUP VHOOV RQO\ LQ LWV KRPH PDUNHW 7KH SHU SHULRG SURILW LV WKHQp0 = 3 /HW XV FRQVLGHU WKH FDVH ZKHUH ILUPL GHYLDWHV E\

:HDSSO\DVHWWLQJWKDWLVLGHQWLFDOWRWKHVHWWLQJSUHVHQWHGLQ/RPPHUXGDQG6¡UJDUG,QWKDW VHWWLQJZHDVVXPHLGHQWLFDOSURGXFWVDQGZHLQYHVWLJDWHERWK%HUWUDQGDQG&RXUQRWFRPSHWLWLRQDQG ERWKWULJJHUVWUDWHJLHVDQGRSWLPDOSXQLVKPHQWSDWKV

(17)

H[SRUWLQJ7KHPD[LPLVDWLRQSUREOHPLQWKHH[SRUWPDUNHWLQWKHSHULRGRIGHYLDWLRQ LVVXEVFULSWVLDQGMGHQRWHVFRXQWU\RUWKHILUPLQFRXQWU\LDQGMUHVSHFWLYHO\

( )

ß

à Ï Þ

Ð

Î + -

-

=

3 3 3 V

W 3

0D[ L' L M M M L

3L p a

6ROYLQJWKLVPD[LPL]DWLRQSUREOHPZHKDYHWKDW

( )

M M M

L M

W 3 3

3a V

a

a +

= +

6LQFHWKHGHYLDWLQJILUPZLOOQHYHUVHW3L!3ZHKDYHWKHIROORZLQJRSWLPDOSULFHLQ WKHSHULRGRIGHYLDWLRQ

3L' =PLQ33aL 7KHQLWFDQHDVLO\EHVHHQWKDWLI

M

M

M M a

W 3

3

V a

a Ÿ

> -

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

a

a > a7KHSHUSHULRGSURILWIRUWKHGHYLDWLQJILUPLVWKHQ

[ ( ) ]

3

W 3 3

3 V

M M M

' M

L a

p +a -

+

=

$IWHUGHYLDWLRQERWKILUPVUHYHUWWRVWDWLF1DVKHTXLOLEULXPEHKDYLRXUIRUHYHU7KH HTXLOLEULXP RXWFRPH LQHDFKRI WKH WZRPDUNHWVZRXOG WKHQEH DV GHVFULEHG LQ WKH

(18)

SUHYLRXVVHFWLRQ(DFKILUPZRXOGEHWKHORZFRVWSURGXFHULQLWVKRPHPDUNHWDQG WKHKLJKFRVWSURGXFHULQWKHH[SRUWPDUNHW:HKDYHWKHIROORZLQJSHUSHULRGSURILWV DIWHUGHYLDWLRQ

[ ( ) ] [ ( ) ]

3

W 3 V 3

W 3 V

M M M M

L L L 1 L

L a

a a

p a + -

+ +

= -

7KHILUVWWHUPLQVLGHWKHEUDFNHWUHSUHVHQWVWKHSURILWVLQWKHKRPHPDUNHWZKLOHWKH VHFRQGWHUPLVWKHSURILWVLQWKHH[SRUWPDUNHW

7KH IROORZLQJ FRQGLWLRQ GHWHUPLQHV LI ILUPV KDYH LQFHQWLYHV WR VXVWDLQ FROOXVLRQZLWKdGHQRWLQJWKHGLVFRXQWIDFWRUFRPPRQIRUERWKSDUWLHV

0 ' 1

p

d p d

d p

+ - - ˜

,IFRXQWULHVDQGILUPVDUHV\PPHWULFaL =aM =aWL =WM =WVL =VM =VZHKDYH WKHIROORZLQJFULWLFDOGLVFRXQWIDFWRU

[ ]

(

)

3 W W W 3 W 3 V 6

V V 3

W 3 W W 3 V 3 V 3 V

d

a a

a a

a a a

a a

a

d a Ÿ

- +

- -

+ - +

+ +

- +

-

˜ +

:H VHH WKDW WKUHH NH\ SDUDPHWHUV GHWHUPLQH WKH FULWLFDO GLVFRXQW IDFWRU FXVWRPHU OR\DOW\FRQVXPHUVSULFHVHQVLWLYLW\DQGDFFHVVSULFH7RPDNHWKHDQDO\VLVWUDFWDEOH ZHHYDOXDWHWKHFRPSDUDWLYHVWDWLFVDWa ,WFDQHDVLO\EHVKRZQWKDWa LVLQWKH UHOHYDQWUDQJHRIaZHKDYHVSHFLILHGSUHYLRXVO\(YHQWKRXJKZHDVVXPHWKDWZH VWDUW IURP D V\PPHWULF VLWXDWLRQ ZH RSHQ XS IRU WKH SRVVLELOLW\ WKDW WKH SULFH VHQVLWLYLW\RIFRQVXPHUVaFDQFKDQJHIRURQHFRXQWU\LQLVRODWLRQ2XUUHVXOWVDUH DVIROORZV

(19)

3URSRVLWLRQ&RQVXPHUSULFHVHQVLWLYLW\a L <

›

› a

d

LL

L L <

›

› a

d

M L >

›

› a

d LIW V V ÜÝÛ3

ÌÍË - + -

<

3URRIL:HVHWWL WM WLQ'LIIHUHQWLDWLQJZLWKUHVSHFWWRaDQGWKHQVHWWLQJ

=

a ZHREWDLQWKHIROORZLQJH[SUHVVLRQ

( )

[ ]

W 3 3 V

W 3 3 V 3

- +

+ - +

› =

› a d

&RQFHUQLQJSDUWLLZHOHWaLGHQRWHWKHSULFHVHQVLWLYLW\SDUDPHWHULQFRXQWU\LDQG aMWKH SULFH VHQVLWLYLW\ SDUDPHWHU LQ WKH QHLJKERXULQJ FRXQWU\ 7KHQ ZH KDYH WKH IROORZLQJHIIHFWRQKRPHILUP¶VGLVFRXQWIDFWRUE\DFKDQJHLQWKHSULFHVHQVLWLYLW\LQ KRPHPDUNHWHYDOXDWHGDWaM =aL

( )( )

[ ]

L L

W 3 3 V

3 V 3 W 3 V 3 W

- +

+ - -

= +

›

› a

d

$FKDQJHLQWKHSULFHVHQVLWLYLW\LQWKHQHLJKERXULQJFRXQWU\KDVWKHIROORZLQJHIIHFW HYDOXDWHGDWaM =aL

[ ]

M

L

W 3 3 V

3 V 3 3 V W 3 W

- +

- -

+ - +

› =

› a

d

7KHQWKHFRQGLWLRQLQWKH3URSRVLWLRQFDQHDVLO\EHYHULILHG4('

,QWKHRU\WKHUHDUHWZRRSSRVLQJHIIHFWVRIPRUHSULFHVHQVLWLYHFRQVXPHUVLQERWK PDUNHWV2QWKHRQHKDQGWKHILUPWKDWGHYLDWHVHDUQVPRUHLQWKHGHYLDWLRQSKDVH2Q WKH RWKHU KDQG PRUH SULFH VHQVLWLYH FRQVXPHUV WULJJHU PRUH LQWHQVH ULYDOU\ DIWHU GHYLDWLRQ DQG WKHUHE\ D SURILW ORVV LQ WKH SHULRGV DIWHU GHYLDWLRQ 7KLV WUDGH RII LV

(20)

DQDO\VHGLQ1LOVVRQLQDQDQDORJRXVVHWWLQJDQGKHFRQFOXGHVWKDWLPSURYLQJ SULFHVHQVLWLYLW\KDVDQDPELJXRXVHIIHFWRQWKHSRWHQWLDOIRUFROOXVLRQ:HVHHIURP SDUWLLQWKH3URSRVLWLRQWKDWLQRXUPRGHOPRUHSULFHVHQVLWLYHFRQVXPHUVLQERWK PDUNHWV OHDGV WR D UHGXFWLRQ LQ WKH FULWLFDO GLVFRXQW IDFWRU 0RUH SULFH VHQVLWLYH FRQVXPHUVUHVXOWLQDODUJHUSRWHQWLDOIRUFROOXVLRQ,QWKLVFDVHWKHORVVRISURILWVDIWHU GHYLDWLRQRXWZHLJKVWKHVKRUWWHUPJDLQLQWKHGHYLDWLRQSKDVH

$OWHUQDWLYHO\ ZH PD\ KDYH D RQHFRXQWU\ FKDQJH LQ SULFH VHQVLWLYLW\

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

&RQVLGHU QRZ WKH UHODWLRQVKLS EHWZHHQ FROOXVLRQ DQG DFFHVV SULFH :H VWD\

ZLWK WKH V\PPHWULF FDVH ZLWK LGHQWLFDO DFFHVV SULFHV LQ WKH WZR FRXQWULHV W

&RPSDUDWLYHVWDWLFVRQWWKHQFDQEHLQWHUSUHWHGDVLIWKHWZRFRXQWULHVMRLQWO\UHGXFH RULQFUHDVHWKHLUDFFHVVSULFH+RZHYHUZHDOVRRSHQXSIRUWKHSRVVLELOLW\WKDWWKH DFFHVVSULFHFDQFKDQJHXQLODWHUDOO\LQRQHFRXQWU\EXWIURPDFRPPRQOHYHO

1RWHWKDWWKHVHWWLQJLQ1LOVVRQLVGLVWLQFWO\GLIIHUHQWIURPRXUVHWWLQJ,QSDUWLFXODUILUPVDUH DFWLYHLQWKHVDPHPDUNHWDOVRLQWKHFROOXVLYHRXWFRPHZKLOHLQRXUPRGHOILUPVDUHDFWLYHRQO\LQLWV KRPHPDUNHWZKHQFROOXVLRQSUHYDLOV6HHDOVR0¡OOJDDUGDQG2YHUJDDUG/LNH1LOVVRQ WKH\XVHDPRGHOWKDWLVGLVWLQFWO\GLIIHUHQWIURPRXUV7KH\VKRZWKDWWKHFRQFOXVLRQGHSHQGVFUXFLDOO\

RQ WKH QXPEHU RI ILUPV LQ WKH LQGXVWU\ DQG WKH SXQLVKPHQW SDWK 2XU ILQGLQJ LV LGHQWLFDO WR WKHLU ILQGLQJVZKHQWKH\DVVXPHGXRSRO\DQGWULJJHUVWUDWHJLHVDVZHGR

(21)

3URSRVLWLRQ$FFHVVSULFHVW

L

W

<

›

›d

LL

W

W M

L L

L <

›

> ›

›

›d d

3URRIL$MRLQWUHGXFWLRQLQDFFHVVSULFHVKDVWKHIROORZLQJHIIHFWRQWKHFULWLFDO GLVFRXQWIDFWRUHYDOXDWHGDWa

[ ]

W 3 3 V 3

W =- + -

›

›d

LL,IFRXQWU\LXQLODWHUDOO\ORZHUVLWVDFFHVVSULFHWKHQLWZRXOGDIIHFWRQO\WKHKRPH PDUNHW SURILWV DIWHU GHYLDWLRQ IRU WKH ILUP ORFDWHG LQ FRXQWU\L 2EYLRXVO\ WKHQ

WL

L >

›

›d

7KH HIIHFW RI WKH ILUP ORFDWHG LQ WKH QHLJKERXULQJ FRXQWU\ RI D FKDQJH LQ KRPH FRXQWU\¶VDFFHVVSULFHLV

( ) ( )( )

( )

[

L M M LM M L L L

]

M L

W 3 V W 3 W 3 W 3 V W W V V 3

W 3 3 V W 3 3 V W 3 3 V

W + + - + - - - +

- - -

+ -

= +

›

›d

4('

7KHUH DUH WZR RSSRVLQJIRUFHV RIDMRLQWUHGXFWLRQLQW2Q WKH RQH KDQG LW ZRXOG LQFUHDVHWKHVKRUWWHUPSURILWVIROORZLQJIURPDGHYLDWLRQ2QWKHRWKHUKDQGLWZRXOG UHVXOWLQPRUHLQWHQVHULYDOU\DIWHUGHYLDWLRQDQGWKHUHIRUHUHGXFHWKHIXWXUHSURILWV

$VZHVHHIURPWKH3URSRVLWLRQWKHILUVWHIIHFWGRPLQDWHV/RZHUDFFHVVSULFHVZRXOG OLPLW WKH SRWHQWLDO IRU VXVWDLQLQJ D FROOXVLYH RXWFRPH ,W LV RI LQWHUHVW WR QRWH WKDW /RPPHUXG DQG 6¡UJDUG LQ D VHWWLQJ ZLWK KRPRJHQRXV SURGXFWV IRXQG WKDW

(22)

ORZHUDFFHVVSULFHVZRXOGSURPRWHFROOXVLRQLQDVHWWLQJZLWK%HUWUDQGFRPSHWLWLRQ DQGGHVWDELOLVHDFROOXVLYHRXWFRPHLI&RXUQRWFRPSHWLWLRQSUHYDLOV

:HILQG LW ZRUWKZKLOH WR H[SODLQ WKH GLIIHUHQFH EHWZHHQ RXU HDUOLHU DQG WKH SUHVHQWUHVXOW%HUWUDQGFRPSHWLWLRQZLWKKRPRJHQRXVJRRGVLVDYHU\KDUVKIRUPRI FRPSHWLWLRQDQGLQVXFKDVHWWLQJWKHDFFHVVSULFHLVQRUPDOO\WKHRQO\VKLHOGDJDLQVW EHLQJKROGGRZQWR]HURSURILW7KHSURILWOHYHOFDQEHVKRZQWRGHSHQGYHU\VWURQJO\

RQWKHDFFHVVSULFH7KLVLQWXUQLPSOLHVWKDWWKHSXQLVKPHQWDIWHUGHYLDWLRQQDPHO\

WKH UHWXUQ WR QRQFRRSHUDWLYH %HUWUDQG EHFRPHV PXFK KDUVKHU ZLWK D ORZHU DFFHVV SULFH(YHQWKRXJKDORZHUDFFHVVSULFHDOVRZLOOLQFUHDVHWKHWHPSWDWLRQWRGHYLDWH WKH³KDUVKHUSXQLVKPHQW´HIIHFWZLOOGRPLQDWHVRFROOXVLRQLVHDVLHUWRVXVWDLQZLWKD ORZHU DFFHVV SULFH ,Q WKH SUHVHQW FRQWH[W WKRXJK WKH DFFHVV SULFH LV QRW WKH RQO\

UHDVRQ ZK\ WKH ILUPV FDQ SUHVHUYH VRPH SURILW HYHQ XQGHU KRPRJHQRXV JRRGV

%HUWUDQGFRPSHWLWLRQ&XVWRPHUOR\DOW\SRLQWVLQWKHVDPHGLUHFWLRQ7KLVPHDQVWKDW DORZHUDFFHVVSULFHKDVDPXFKOHVVSRWHQWLDOWRKDUPSURILWXQGHUQRQFRRSHUDWLRQ,Q WKHHQGZHJHWDUHVXOWFRQWUDU\WRRXUHDUOLHURQH(YHQLQD%HUWDQGVLWXDWLRQORZHU DFFHVVSULFHVGHVWDELOLVHVFROOXVLRQ

,IZHKDYHDXQLODWHUDOFKDQJHLQDFFHVVSULFHLQRQHFRXQWU\LWKDVGLVWLQFWO\

GLIIHUHQW HIIHFWV RQ WKH WZR ILUPV LQ TXHVWLRQ 7KH KRPH ILUP ZRXOG WKHQ KDYH VWURQJHU LQFHQWLYHVWR VXVWDLQ FROOXVLRQ VLQFH FRPSHWLWLRQ ZRXOG QRZ OHDG WR PRUH LQWHQVH ULYDOU\ LQ LWV KRPH PDUNHW 7KH RWKHU ILUP ZRXOG QRZ HDUQ PRUH LQ WKH QHLJKERXULQJPDUNHWERWKGXULQJXQLODWHUDOGHYLDWLRQDQGLQWKHFRPSHWLWLYHRXWFRPH WKDWIROORZV7KHUHIRUHLWZRXOG KDYHVWURQJHULQFHQWLYHV WRGHYLDWH 'XH WR WKLV D XQLODWHUDO UHGXFWLRQ LQ DFFHVV SULFH PD\ WULJJHU D GHYLDWLRQ DQG WKHQ D VKLIW IURP FROOXVLRQWRFRPSHWLWLRQ

(23)

3URSRVLWLRQ&XVWRPHUOR\DOW\V

L

V

>

›

›d

LL

V

V M

L L

L >

›

< ›

›

›d d

3URRIL'LIIHUHQWLDWLQJZLWKUHVSHFWWRVHYDOXDWHGDWa JLYHVWKHIROORZLQJ H[SUHVVLRQ

(

V3 3 3 W

)

V

>

-

= +

›

›d

LL:HVHHIURPDQGWKDWDFKDQJHLQVLZRXOGRQO\ DIIHFWSURILWVLQRZQ

PDUNHWDIWHUGHYLDWLRQ+HQFH VL

L <

›

›d 7KHQLWIROORZVVWUDLJKWIRUZDUGIURPWKHIDFW

WKDW

V

>

›

›d DQG

VL

L <

›

›d WKDW

VM

L >

›

›d 4('

:HVHHWKDWDQLQFUHDVHLQWKHQXPEHURIFRQVXPHUVOR\DOWRWKHLQFXPEHQWLQHDFKRI WKH WZR PDUNHWV ORZHUV WHQGV WR UHGXFH WKH FULWLFDO GLVFRXQW IDFWRU LW SURPRWHV FROOXVLRQ$JDLQWKHUHDUHWZRRSSRVLQJIRUFHV2QWKHRQHKDQGLIPDQ\FRQVXPHUV DUH OR\DO WRWKH LQFXPEHQW WKHQ WKH VKRUWWHUP JDLQ IURP HQWU\ LQ WKH QHLJKERXULQJ PDUNHW LV OLPLWHG 2Q WKH RWKHU KDQG PDQ\ OR\DO FRQVXPHUV LPSOLHV WKDW WKH ORQJ WHUPORVVLQLWVRZQPDUNHW IROORZLQJD GHYLDWLRQ LV OLPLWHG 7KH UHDVRQ LV WKDW WKH LQFXPEHQW¶VORVVIURPFRPSHWLWLRQLQLWVKRPHPDUNHWLVQRZPRUHOLPLWHG

$XQLODWHUDOFKDQJHLQVPD\GHVWDELOLVHWKHFROOXVLYHRXWFRPH%\LQFUHDVLQJ LWVRZQDGYHUWLVLQJDQGWKHUHE\WKHQXPEHURIRZQOR\DOFRQVXPHUVDILUPUHGXFHV WKHVFRSHIRUFROOXVLRQ,WPD\GHYLDWHEHFDXVHLWDQWLFLSDWHVDKLJKHUIXWXUHSURILWV IROORZLQJDGHYLDWLRQ,IZHLQWHUSUHWVDVDGYHUWLVLQJVHH3URSRVLWLRQWKHQZHVHH

(24)

WKDWWKHILUPVPD\IDFHDFRRUGLQDWLRQSUREOHP7KHILUPVFDQEHMRLQWO\EHWWHURIILI ERWKDGYHUWLVHEHFDXVHWKDWZRXOGSURPRWHFROOXVLRQ+RZHYHUXQLODWHUDODGYHUWLVLQJ ZRXOGHQFRXUDJHWKHILUPWKDWDGYHUWLVHVWRGHYLDWH

620(&21&/8',1*5(0$5.6

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

,QWKHQHZFRPHUHQWU\PRGHOZHVDZKRZWKHEHVWVWUDWHJ\RIWKHLQFXPEHQW FRXOG EH WR VHW DKLJKHU SULFH WKDQ WKH HQWUDQW HYHQ WKRXJK WKH DFFHVV SULFH WR LQIUDVWUXFWXUHJLYHVWKHHQWUDQWDPDUJLQDOFRVWGLVDGYDQWDJH ,WPD\VLPSO\SD\IRU WKHLQFXPEHQWWRSURILWIURPWKHOR\DOW\RIVRPHRIWKHFRQVXPHUVWKDQFKDVLQJYHU\

KLJKPDUNHWVKDUHVE\ORZHULQJSULFHV&XVWRPHUOR\DOW\PLJKWOHDGWKHLQFXPEHQWWR IROORZ DQ DFFRPPRGDWLRQ VWUDWHJ\ DV UHJDUGV HQWU\ WKDW DOORZV WKH HQWUDQW D QRQ QHJOLJLEOH PDUNHW VKDUH :H WKLQN WKLV GHVFULSWLRQ PLJKW FDSWXUH UHDOLW\ LQ PDQ\

WHOHFRPPDUNHWV

,I DQ LQFXPEHQW FRXOG DGYHUWLVH WR LQVWDOO FXVWRPHU OR\DOW\ LW ZRXOG EH RSWLPDO WR GR VR +RZHYHU DGYHUWLVLQJ E\ WKH LQFXPEHQW SULRU WR D EDWWOH ZLWK DQ HQWUDQWFRXOGDOVREHVHHQWRUHGXFHWKHSULFHVHQVLWLYLW\RIFRQVXPHUVDVQRQSULFH LVVXHVFRPHPRUHWRWKHIRUHIURQW+LJKLQYHVWPHQWVDUHWKHQRQO\RSWLPDOZKHQWKH LQFXPEHQWGHFLGHVWRDFFRPPRGDWHWKHHQWUDQWEXWQRWZKHQGHWHUUHQFHLVFKRVHQ

(25)

7XUQLQJWRWKHFDVHRIUHFLSURFDOHQWU\E\³ROGPRQRSROLVWV´LQWRHDFKRWKHU¶V PDUNHWV WKH VXVWDLQDELOLW\ RI PDUNHW VKDULQJ FROOXVLRQ LV RI NH\ LQWHUHVW ,Q PXFK FROOXVLRQ DQDO\VLV RQH JHWV ³SDUDGR[LFDO´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

(26)

5()(5(1&(6

$OOHQ%DQG--7KLVVHµ3ULFH(TXLOLEULDLQ3XUH6WUDWHJLHVIRU+RPRJHQRXV 2OLJRSRO\¶-RXUQDORI(FRQRPLFV 0DQDJHPHQW6WUDWHJ\

)XGHQEHUJ'DQG-7LUROHµ7KH)DW&DW(IIHFWWKH3XSS\'RJ3OR\DQGWKH /HDQDQG+XQJU\/RRN¶$PHULFDQ(FRQRPLF5HYLHZ3DSHUVDQG3URFHHGLQJV

*URVVPDQ*0DQG&6KDSLURµ,QIRUPDWLYH$GYHUWLVLQJZLWK'LIIHUHQWLDWHG 3URGXFWV¶5HYLHZRI(FRQRPLF6WXGLHV

.OHPSHUHU3µ(QWU\'HWHUUHQFHLQ0DUNHWVZLWK6ZLWFKLQJ&RVWV¶(FRQRPLF -RXUQDO

.OHPSHUHU3µ&RPSHWLWLRQZKHQ&RQVXPHUV+DYH6ZLWFKLQJ&RVWV$Q 2YHUYLHZZLWK$SSOLFDWLRQVWR,QGXVWULDO2UJDQL]DWLRQ0DFURHFRQRPLFVDQG ,QWHUQDWLRQDO7UDGH¶5HYLHZRI(FRQRPLF6WXGLHV

/RPPHUXG.(DQG/DUV6¡UJDUGµ7UDGH/LEHUDOL]DWLRQDQG&DUWHO 6WDELOLW\¶5HYLHZRI,QWHUQDWLRQDO(FRQRPLFVIRUWKFRPLQJ

0¡OOJDDUG+3DQG3%2YHUJDDUGµ0DUNHW7UDQVSDUHQF\$0L[HG

%OHVVLQJ"¶0DQXVFULSW&RSHQKDJHQ%XVLQHVV6FKRRO

(27)

1LOVVRQ$µ7UDQVSDUHQF\DQG&RPSHWLWLRQ¶0DQXVFULSW6WRFNKROP6FKRRO RI(FRQRPLFV

6FKPDOHQVHH5µ$GYHUWLVLQJDQG(QWU\'HWHUUHQFH$Q([SORUDWRU\0RGHO¶

-RXUQDORI3ROLWLFDO(FRQRP\

:DQJ5DQG4:HQµ6WUDWHJLF,QYDVLRQLQ0DUNHWVZLWK6ZLWFKLQJ&RVWV¶

-RXUQDORI(FRQRPLFV 0DQDJHPHQW6WUDWHJ\

Referanser

RELATERTE DOKUMENTER

Rxu frqfhuq lv zkhwkhu dqg krz frqyhujhqfh wr wkdw glvfuhwh vhw pd|rewdlq lq wkh orqj uxq1 Xqghu idluo|zhdn k|srwkhvhv Vhfwlrq 5 surylghv dq d!updwlyh dqg frq0 vwuxfwlyh dqvzhu1

We distinguish between classical (de novo) entry and reciprocal entry (incumbent entering the neighbouring market), and analyse how such public policy measures as (i) publication

zlwk uhihuhqfh wr zkdw nlqg ri lpsdfwv wkh xqfhuwdlqwlhv pd| kdyh iru srolw0 lfdo ghflvlrqv1 Vhfwlrq 6 glvfxvvhv dedwhphqw xqghu xqfhuwdlqw| rq wkh edvlv ri d vlpsoh prgho wr vkrz

; Zh xvh P wr lqglfdwh wkh qxpehu ri jurxsv1 Lq rughu iru dq djuhhphqw wr zrun/ doo jurxsv pxvw ehqhw iurp lw/ dovr wkh ohdvw hflhqw wkdw zrxog qrw sduwlflsdwh lq d ixoo jkw1

Dq lpphgldwh remhfwlrq wr wklv dujxphqw lv wkdw wkh hpslulfdo zdjh htxd0 wlrq lqfoxghv yduldeohv wkdw d&gt;hfw wkh vwuxfwxudo udwh ri xqhpsor|phqw dqg wkdw wkhuh lv qr

Wkh sxusrvh ri wkh suhvhqw sdshu kdv ehhq wr dsso| vwrfkdvwlf g|qdplf surjudpplqj lq rughu wr ghyhors dq hfrqrphwulf prgho iru up h{lw1 Dffruglqj wr vwrfkdvwlf g|qdplf surjudpplqj/

$FFRUGLQJ WR WKH ILUVW K\SRWKHVLV WKH VKLIW LQ UHODWLYH ODERXU GHPDQG LV ODUJHO\ GXH WR D GLVSURSRUWLRQDOFKDQJHLQSURGXFWLYLW\FDXVHGE\QRQQHXWUDOWHFKQLFDOFKDQJHVNLOOHGODERXU KDV

Zh wkhq wxuqhg rxu dwwhqwlrq wr wkh dqdo|vlv ri d Udpvh| jurzwk prgho lq zklfk suhi0 huhqfhv zhuh dowhuhg wr lqfoxgh d frqfhuq iru uhodwlyh frqvxpswlrq/exloglqj rq wkh zrun ri