Vertical Integration and Foreclosure: Evidence from Production Network Data
With Johannes Boehm
Management Science 68(1), 141-161, January 2023
This paper studies the prevalence of potential anticompetitive effects of vertical mergers using a novel data set on U.S. and international buyer-seller relationships and across a large range of industries. We find that relationships are more likely to break when suppliers vertically integrate with one of the buyers’ competitors than when they vertically integrate with an unrelated firm. This relationship holds for both domestic and cross-border mergers and for domestic and international relationships. It also holds when instrumenting mergers using exogenous downward pressure on the supplier’s stock prices, suggesting that reverse causality is unlikely to explain the result. In contrast, the relationship vanishes when using rumored or announced but not completed integration events. Firms experience a substantial drop in sales when one of their suppliers integrates with one of their competitors. This sales drop is mitigated if the firm has alternative suppliers in place. These findings are consistent with anticompetitive effects of vertical mergers, such as vertical foreclosure, rising input costs for rivals, or self-foreclosure.
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Measuring Image Concern
With Emeric Henry
Journal of Economic Behavior & Organization, Volume 160, April 2019, Pages 19-39
It is now well documented that individuals tend to change their behavior when their actions are observed by others. Yet there is no systematic way of measuring this dimension of preferences at the individual level. In this paper, we propose and validate a novel experimental game to measure individual sensitivity to social image. We document substantial heterogeneity in the level of image concern. We show that image concerned individuals tend to be less cooperative in a repeated prisoner’s dilemma, especially when their actions cannot be observed by others. Finally, we present evidence suggesting that the level of image concern is uncorrelated with observer characteristics, with one exception: members of ethnic minorities appear less sensitive to being observed by another member of a minority group.
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Social Norms and Xenophobia: Evidence from Facebook
Work in Progress
How do individuals influence each other's behavior online and how does this shape the type of views and information that gets shared on social networks? To answer these questions, I study the spread of hate speech on social media and attempts to contain it - a topic that has received a great deal of attention recently as lawmakers increasingly call for action against xenophobic, antisemitic and otherwise marginalizing messages.
I assess the effectiveness of counterspeech, a decentralized mechanism against online hate speech that consists of moderate users speaking out against hate. I collect data on Facebook posts by large German news media as well as on user responses. Comparing the future behavior of individuals who were targeted by a counterspeech group to a set of control individuals, I find a sizable drop in their likelihood to engage in hate speech for about two weeks. These individuals are also less likely to engage in discussions in general and in contentious ones in particular. In addition, I show that news articles targeted by such interventions see more moderate individuals join the debate than control articles. I interpret my findings as evidence consistent with counterspeech acting as non-monetary punishment facilitating coordination on a social norm.
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