The LCII is organizing research seminars in economics.
On the agenda for the fall semester 2017 are:
October 20, 2pm -3.30pm
Wim Marneffe (UHasselt)
Title: Testing the Lawyer-induced Litigation Hypothesis in Europe
Room: Bat B31, Room TBC
Abstract
Notwithstanding the benefits of competition within the lawyer profession, economic theory supports the existence of a lawyer-induced litigation effect. Given concerns about the growing litigiousness in many European countries and the growing awareness that observed increases in lawyers might further induce litigation rates, policymakers require a thorough understanding of the relationship between the number of lawyers and litigation rates. Utilizing a European crosscountry dataset, we contribute to the scant empirical literature on the lawyer-induced litigation hypothesis. To address endogeneity problems that arise when estimating the effect of the number of lawyers on litigation, we use two strategies. Following existing literature, we first estimate our model by means of the 2SLS procedure. Second, we exploit the instrumental variable approach based on the linear GMM estimator of Arellano and Bond (1991). To date, the Arellano-Bond estimator has not yet been used to address the endogeneity concerns between lawyers and litigation rates despite its advantages and popularity in other research areas. The estimations result in a positive and significant effect of lawyers that is robust across regressions. We discuss the policy implications of our findings.
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November 10th, 2pm -3.30pm
Dainis Zegers (U Cologne)
Title: Building an Online Reputation with Free Content: Evidence from the E-Book Market
Room: Bat B31, Room TBC
Abstract
An important strategy for sellers to build a reputation is to practice introductory pricing. By selling at a lower introductory price, sellers increase demand, induce more buyers to provide feedback, and thus build a reputation more quickly. I examine a form of introductory pricing that is particularly popular in digital markets: offering digital content for free. I argue that offering free content to build a reputation can be a double-edged strategy. It does not only attract buyers with a high preference, but also buyers with a low preference. Low-preference buyers give worse feedback than high-preference buyers, inducing a negative selection effect on a seller’s reputation. I estimate the strength of this effect using data from an online self-publishing platform where I observe authors either selling their e-books at a price or giving them away as free content. By exploiting the fact that I observe ratings for free and purchased versions of the same e-book, I show that those buyers who obtain an e-book as free content rate it worse than those buyers purchasing the e-book at a positive price, consistent with a negative selection effect on reputation.
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November 24th, 2pm -3.30pm
Robert Somogyi (CORE, UCL)
Title: Zero-rating, social welfare and net neutrality
Room: Bat B31, Room TBC
Abstract
This paper studies zero-rating, an emerging business practice consisting in a mobile internet service provider (ISP) excluding the data generated by certain content providers (CPs) from its consumers’ monthly data cap. Being at odds with the principle of net neutrality, these arrangements have recently attracted regulatory scrutiny all over the word. I analyze zero-rating incentives of a monopolistic ISP facing a capacity constraint in a two-sided market where consumption provides utility for homogeneous consumers as well as advertising revenue for CPs. Focusing on a market with two CPs competing with each other and all other content which is never zero-rated, I identify parameter
regions in which zero, one or two CPs are zero-rated. Surprisingly, the ISP may zero rate content when content is either very unattractive or very attractive for consumers, but not in the intermediary region. I show that zero-rating benefits consumers if content is attractive, whereas it may decrease social welfare in the case of unattractive content.
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Dec 1, 2pm -3.30pm
Johannes Johnen (CORE, UCL)
Title: TBA
Room: Bat B31, Room TBC
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December 8th, 2pm -3.30pm
Marianne Verdier (CRED, Paris II)
Title: Competition between a platform and merchants for selling services
Room: Bat B31, Room TBC
