#PersonalizedPricing Isn’t All Bad for Consumers https://www.cato.org/blog/personalized-pricing-isnt-all-bad-consumers
"Both individualized and dynamic pricing have existed in our daily lives for years. But the combination of the two using modern technology has led to fears… that “corporations are collecting our personal data to extract every cent they can to pad their pockets.”
… the best protection for consumers is a competitive market. In #competitiveMarkets with no supply constraints, individualized dynamic pricing has proven to largely benefit consumers. Any time a firm uses #IDP to raise prices for a given consumer, that automatically allows a competing firm to undercut those prices and take that consumer away"
#economics #IndustrialOrganization

#AI and the Quantity and Quality of Creative Products: Have LLMs Boosted Creation of Valuable Books? https://d.repec.org/n?u=RePEc:nbr:nberwo:34777&r=&r=ind
"While the average quality of new #books has fallen with the LLM-induced influxand while much of the new work appears to be of little value to consumers– the #LLM influx has delivered a large number of works near the top of the usage/quality distribution. The LLM-era entry process delivers a quarter to a half more consumer surplus from books than the pre-LLM process. Moreover, the arrival of LLMs does not appear to have displaced activity by incumbent authors
… Authors entering since the LLM influx produce predominantly low-quality work; and the higher-quality output of pre-LLM authors entrants has risen"
#writing #IndustrialOrganization

The Labor Market Consequences of Acquisitions https://d.repec.org/n?u=RePEc:ces:ceswps:_12162&r=&r=ind
"… the consequences of corporate acquisitions for workers and find that they are far from neutral: earnings decline through both job displacement and wage cuts among stayers from target firms. These wage cuts do not reflect increased monopsony power. Instead, they are concentrated in acquisitions where the acquirer’s CEO sat on the target’s board prior to the transaction, suggesting insider knowledge of pay policies.
… such CEOs disproportionately acquire high-paying firms and subsequently reduce wages. The result is rent redistribution from workers to shareholders and managers, as seen in higher profits and CEO pay. These findings imply that the labor-market risks of acquisitions arise not only from greater market concentration, as documented in previous work, but also from managerial incentives that conventional antitrust policies are ill-equipped to address."
#LaborEcon #wages #IndustrialOrganization

Bird transmitter packing pr0n. So neatly arranged. ❤️
#edc #IndustrialOrganization #knolling

Bird transmitter packing pr0n. So neatly arranged. ❤️
#edc #IndustrialOrganization #knolling

Labor share and market power in European firms https://d.repec.org/n?u=RePEc:pra:mprapa:123442&r=&r=lma
"firms’ product and labor market power, as reflected in product markups and labor markdowns, enable firms to capture a larger share of economic output at the expense of workers.
… empirical analysis shows that markdowns are negative correlated with labor share, as firms reduce employment and suppress #wages below the marginal revenue of labor.
Product markups exhibit a dual effect: they can positively influence the labor share by increasing wages and employment when firms reinvest additional profits into production expansion. … markups indirectly reduce the labor share due to their positive link with labor markdowns. Firms with significant pricing power often suppress wages and limit hiring, diminishing the labor share.
… empirical results reveal the presence of a hump-shaped relationship between product markups and labor share. Initially, as product markups increase, the labor share rises, but this trend reverses when markups reach high levels. This nonlinearity underscores the dual nature of markups: while moderate markups have a direct positive effect on labor share, mitigating labor markdowns, high markups enable firms to exert substantial #monopsony power, diminishing the labor share.
The analysis reveals significant cross-country #heterogeneity in the effects of markups and markdowns on the labor share."
#IndustrialOrganization #LaborMarkets

Why Don’t EU Firms Innovate? The Hidden Costs of Failure https://conversableeconomist.com/2024/12/18/why-dont-eu-firms-innovate-the-hidden-costs-of-failure/
"… high firing costs tend to direct R&D investment towards mature products rather than new ones. In an open economy, countries with high levels of employment protection tend to specialize in well established industries and leave #innovation of new products to countries with less employment protection.
… restructuring costs (that include much more than severance packages) are approximately 10 times higher in countries with high labor protection, such as in Western Europe, than in countries with low labor protection such as in the United States"
#LaborMarkets #IndustrialOrganization