Daniel L. Chen, Vardges Levonyan, S. Eric Reinhart, Glen Taksler, Mandatory Disclosure: Theory and Evidence from Industry-Physician Relationships, The Journal of Legal Studies, Vol. 48 (2), 2019. (Journal Article)
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Gregory S. Crawford, Cable Regulation in the Internet Era, In: Economic Regulation and Its Reform: What have we learned?, University of Chicago Press, Chicago, Illinois, p. 999, 2014. (Book Chapter)
The market for multi-channel video programming has undergone considerable change in the
last 15 years. Direct-Broadcast Satellite service, spurred by 1999 legislation that leveled the playing field with cable television systems, has grown from 3% to 33% of the U.S. MVPD (cable, satellite, and telco video) market. Telephone operators have entered in some parts of the US and online video distributors are a growing source of television viewing. This chapter considers the merits of cable television regulation in light of these developments. It surveys the dismal empirical record on the effects of price regulation in cable and the more encouraging but incomplete evidence on the benefits of satellite and telco competition. It concludes with a consideration of four open issues in cable markets: horizontal concentration and vertical integration in the programming market, bundling by both cable systems and programmers, online
video distribution, and temporary programming blackouts from failed carriage negotiations for
both broadcast and cable programming. While the distribution market is clearly now more
competitive, concerns in each of these areas remain. |
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Alexander Eule, Don't Touch That Dial, In: Barron's, p. 18 - 20, 5 August 2013. (Newspaper Article)
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Anja Lambrecht, Katja Seim, Naufel Vilcassim, Amar Cheema, Yuxin Chen, Gregory S. Crawford, Kartik Hosanagar, Raghuram Iyengar, Oded Koenigsberg, Robin Lee, Eugenio J Miravete, Ozge Sahin, Price discrimination in service industries, Marketing Letters, Vol. 23 (2), 2012. (Journal Article)
This article outlines recent methods and applications directed at understanding the profit and consumer welfare implications of increasingly prevalent price discrimination strategies in the service sector. These industries are typically characterized by heterogeneity in consumers' valuation and usage of the service, resale constraints, and a focus on price as the service's key attribute. The article focuses on how firms use nonlinear pricing or bundling strategies to benefit from the heterogeneity in consumer demand. We describe the basic economic model commonly used in the literature to analyze such strategic choices and present recent methodological improvements to this benchmark. A discussion of existing applications and future research opportunities concludes the article. |
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Gregory S. Crawford, Evan Kwerel, Jonathan Levy, Economics at the FCC: 2007–2008, Review of Industrial Organization, Vol. 33 (3), 2008. (Journal Article)
In any given year, the Federal Communications Commission confronts many issues of interest to economists. This paper summarizes four issues of interest during the last year: Spectrum Auctions, Media Ownership, Quality-Adjusted Cable Prices, and Leased Access. It highlights the role that economic analysis played in each and identifies areas where further research would be fruitful. |
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Gregory S. Crawford, The discriminatory incentives to bundle in the cable television industry, Quantitative Marketing and Economics, Vol. 6 (1), 2008. (Journal Article)
An influential theoretical literature supports a discriminatory explanation for product bundling: it reduces consumer heterogeneity, extracting surplus in a manner similar to second-degree price discrimination. This paper tests this theory and quantifies its importance in the cable television industry. The results provide qualified support for the theory. While bundling of general-interest cable networks is estimated to have no discriminatory effect, bundling an average top-15 special-interest cable network significantly increases the estimated elasticity of cable demand. Calibrating these results to a simple model of bundle demand with normally distributed tastes suggests that such bundling yields a heterogeneity reduction equal to a 4.7% increase in firm profits (and 4.0% reduction in consumers surplus). The results are robust to alternative explanations for bundling. |
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Gregory S. Crawford, Joseph Crespo, Helen Tauchen, Bidding asymmetries in multi-unit auctions: implications of bid function equilibria in the British spot market for electricity, International Journal of Industrial Organization, Vol. 25 (6), 2007. (Journal Article)
This paper introduces and tests Bid Function Equilibria (BFE) in the British spot market for electricity. BFE extend von der Fehr and Harbord's (1993) multi-unit auction model of wholesale electricity markets by allowing firms to have heterogeneous costs for different generating units. Pure-strategy equilibria in BFE predict asymmetric bidding by producers: a single firm (the “price-setter") bids strategically while other firms (“non-price-setters") bid their costs. We test for asymmetries in firms' bid functions in the British spot market between 1993 and 1995 and find strong empirical support for the theory. We conclude that BFE have important implications for the design and governance of electricity markets. |
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Gregory S. Crawford, Joseph Cullen, Bundling, product choice, and efficiency: should cable television networks be offered à la carte?, Information Economics and Policy, Vol. 19 (3-4), 2007. (Journal Article)
We conduct a numerical analysis of bundling’s impact on a monopolist’s pricing and product choices and assess the implications for consumer welfare in cable television markets. Existing theory is ambiguous: for a given set of products, bundling likely transfers surplus from consumers to firms but also encourages products to be offered that might not be under à la carte pricing. Simulation of “Full À La Carte” for an economic environment calibrated to an average cable television system suggests that consumers would likely benefit from à la carte sales. If all networks continued to be offered, the average household’s surplus is predicted to increase by $6.80 (65.6%) under à la carte sales (despite a total bundle price that almost doubles) and reduced network profits would have to be such that 41 of 50 offered cable networks have to exit the market to make her indifferent. Simulation of a “Theme Tier” scenario provides intermediate benefits. The incremental marginal costs to cable systems of à la carte sales and its impact in the advertising market and on competition are important factors in determining consumer benefits. |
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Gregory S. Crawford, Matthew Shum, Monopoly quality degradation and regulation in cable television, The Journal of Law and Economics, Vol. 50 (1), 2007. (Journal Article)
Using an empirical framework based on the Mussa-Rosen model of monopoly quality choice, we calculate the degree of quality degradation in cable television markets and the impact of regulation on those choices. We find lower bounds of quality degradation ranging from 11 to 45 percent of offered service qualities. Furthermore, cable operators in markets with local regulatory oversight offer significantly higher quality, less degradation, and greater quality per dollar, despite higher prices. |
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Jean-Pierre Dubé, K Sudhir, Andrew Ching, Gregory S. Crawford, Michaela Draganska, Jeremy T Fox, Wesley Hartmann, Günter J Hitsch, V Brian Viard, Miguel Villas-Boas, Naufel Vilcassim, Recent advances in structural econometric modeling: dynamics, product positioning and entry, Marketing Letters, Vol. 16 (3-4), 2005. (Journal Article)
In the empirical analysis of consumer markets, recent literature has begun to explore the dynamics in both consumer decisions as well as in firms' marketing policies. Other research has begun to explore the strategic aspects of product line design in a competitive environment. In both cases, structural models have given us new insights into consumer and firm behavior. For example, incorporating consumer and firm dynamics may help explain patterns in our data that are not well-captured by static models. Similarly, the strategic aspects of firm entry and product-positioning may be intrinsically linked to firm conduct and the intensity of competition in a market. Structural analysis of these consumer and firm decisions raise a number of substantial computational challenges. We discuss the computational challenges as well as specific empirical applications. The discussions are based on the session “Structural Models of Strategic Choice” from the 2004 Choice Symposium. |
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Gregory S. Crawford, The impact of the 1992 Cable Act on household demand and welfare, RAND Journal of Economics, Vol. 31 (3), 2000. (Journal Article)
I measure the benefit to households of the 1992 Cable Act in light of strategic responses by cable systems to the regulations mandated by the act. A discrete-choice differentiated-product model of household demand for all offered cable television services forms the basis of the analysis. Aggregation over households and service combinations to the level of the data permits estimation on a cross-section of cable markets from before and after the act. The results indicate that while the regulations mandated price reductions of 10–17% for cable services, observed system responses yielded no change in household welfare. Post-act changes in cable prices are responsible for most of the difference. |
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