NEWSLETTER  JULY  2006 

 

 

La  version française de la “newsletter” est disponible auprès de Catherine Portier, cportier@cict.fr.

The news below represents a small sample of the activities of the IDEI researchers. If you would like more information, see the IDEI Website at http://www.idei.fr/, or contact Catherine Portier, cportier@cict.fr.

 

Dear Friends of IDEI,

The development of the theory of two sided markets provides a good example of the fruitfulness of the type of relationship that the Institute has built with its partners. A number of them play a role of intermediary between different types of customers. This is true for instance of VISA, which needs to sell its services both to merchants, which it must convince to accept payment by cards, and to card holders, which it must convince to use cards to pay. The same type of phenomenon arises in computer software where an operating system needs both final users and software developers who produce programs that run on that system. This leads to interesting phenomena: in particular, it can be both privately profitable and socially optimal to subsidize one side of the market to make the product more attractive for the other side.

The Institute has been at the forefront of the development of the theory of two-sided markets under the leadership of Bruno Jullien, Jean-Charles Rochet and Jean Tirole. These three researchers also organized a conference « Competition Policy in Two-Sided Markets » from 29 June to 1 July 2006 in Toulouse. This conference attracted the leading academic specialists world wide of the economics of two sided markets, many economists from anti-trust agencies (including three representatives of the DG Competition of the European Commission) and from regulatory agencies (including the US Federal Reserve Bank and the Dutch Central Bank), as well as several representatives of interested firms (including MasterCard, Nokia and Vodaphone).  Our partners, Visa USA and France Télécom, also participated actively.

Thirteen academic papers were presented, selected from more than fifty. They showcased the vigour of the research on two sided markets the world over. Three round tables – competition policy in two sided markets, competition policy and payment systems, access and termination charges - witnessed lively discussions. They showed that many competition authorities are very attentive to the latest research on the topic.

The Institute, with its world class researchers, its partnerships and its extensive network of academic colleagues, is extremely well suited for this type of research. Because our partners are willing to trust us for the long term, we can invest in fundamental advances. Our partners profit from these advances both in their own analyses of their competitive situation and in their relationships with regulatory agencies.

 

Jacques Crémer

Director of IDEI

   

THE News (FROM APRIL TO JUNE)

 

CONFERENCES

Three conferences were held at IDEI during these last three months.

·         The Econometrics of Auctions, organized by Pierre Dubois, Marc Ivaldi and Thierry Magnac, Toulouse,  May 12-13, 2006.

·         The Seventh INRA-IDEI Conference on Industrial Organization and the Food Processing Industry, organized by André Grimaud, Toulouse, June 9-10, 2006.

·         Competition Policy in Two-Sided Markets, organized by Bruno Jullien, Jean-Charles Rochet and Jean Tirole, Toulouse, June 29, 30 - July 1st.

 

Most of the IDEI events are open. If you would like to attend one of them, or just wish to have more information, visit http://www.idei.fr or send an email to Catherine Portier at cportier@cict.fr

 

EVENTS

  • Emmanuelle Auriol participated in a roundtable on “PPPS: What Works and Why?” at a Workshop on Public-Private Partnerships organized by the National Council of Applied Economic Research in New Delhi on April 8-12.
  • Jean-Paul Azam presented “Turning Devaluation into Pro Poor Growth: Sénégal, 1994-2002” at the NBER Africa Meeting in Cambridge (Massachusetts) on April 25.
  • Bernard Belloc participated in a roundtable on “Universities: Why does France Move Back?” at the Institut Montaigne in Paris on April 25.
  • Bruno Biais presented “Liquidity and Price Discovery in the European Corporate Bond Market” at the Oxford Finance Symposium on June 6-9.
  • Claude Crampes presented «Ensuring the Reliability of Electricity Supply» at the Forum des Régulateurs in Firenze on May 11-13.
  • Jean-Pierre Florens presented « Statistical and Economic Models for Registries » at the University of Louvain la Neuve on May 4.
  • Christian Gollier was auditioned by the Commission Nationale de l’Alimentation on the prevention of medical crisis in Paris on May 19.
  • Marc Ivaldi participated in the Prospective Workshop of the Centre National d’Etudes Spatiales on the communicating planet in Toulouse on June 28-29.
  • Bruno Jullien presented « Multi-Sided Markets: Competing with Network Externalities and Price Discrimination» at Northwestern and University of Michigan in April.
  • Patrick Rey was auditioned as an economic adviser on the impact of parallel imports on national health policies and pharmaceutical industries by the Tribunal de Première Instance in Luxembourg on June 7.
  • Jean-Charles Rochet presented « Must-Take Cards and the Tourist Test » at OCDE in Paris on June 6, at the University of Bologna on June 12, and at Bocconi in Milan on June 13.
  • Gilles Saint-Paul participated in a panel discussion on reforming the base of social security contributions at the Conseil d’Analyse Economique in Paris on June 26.
  • Jean Tirole presented the Snyder Lecture on Two-Sided Markets at the University of California in Santa Barbara on April 25.

 

VISITES

 

  • Eric Renault, Professor at the University of North Carolina, visited IDEI from April 18-30.
  • Sophie Pedder, journalist at The Economist, met Jacques Crémer, Patrick Rey and Gilles Saint-Paul on June 8.
  • Herbert Fung, chief economist at the Office of Telecommunications Authority in Hong Kong, met Jacques Crémer, Bruno Jullien, Thierry Magnac and Jean Tirole on June 28.

 

PRIX, RÉCOMPENSES

·         Christian Gollier was elected at the board of directors of the insurance company La Mondiale.

 

MEDIA

 

           « L’Etat a mieux à faire que de combattre les OPA», by Jean Tirole, L’Expansion, n° 707, April.

           « Toulouse 1 se donne les moyens de choisir ses enseignants », Enjeux les Echos, April.

           Jacques Crémer participated in a debate on the relationships between universities and firms at « Rue des entrepreneurs », France Inter, on April 15.

           « Solidarité entre générations: la France devrait accorder un revenu minimum aux jeunes », by Christian Gollier, Libération, April 12.

           « L’IDEI de Toulouse rayonne et gagne en prestige », by Jean Baudot, Les Echos, April 20.

           « Un nouveau moteur pour la croissance », by Marc Ivaldi, La Dépêche du Midi, April 22.

           « Le pôle toulousain, classé premier », La Dépêche du Midi, May 3.

           «Premier rang pour le pôle économique toulousain », by Sarah Ohana, La Dépêche du Midi, May 9.

           « Jean Tirole, un économiste au sommet », by Rose-Marie Jimenez, La Gazette du Midi, May 15-21.

           « Attirer les investisseurs américains en Europe », by Bruno Biais, Libération,  May 23.

           « Toulouse : le pôle économie en compétition avec des universités du monde entier », by Jacques Crémer, La Gazette du Midi, May 22-28.

           « L’IDEI, pôle mondial », La Dépêche du Midi, May 30.

           « Ententes frauduleuses : la première d’une longue série d’affaires », by Patrick Rey, La Gazette du Midi, June 5.

           « Le train ne tourne pas rond », by Marc Ivaldi, l’Expansion, n°709, June.

           «La chasse aux ententes frauduleuses est ouverte», by Patrick Rey, Le Monde de l’Economie, July 4.

 

FUTURE EVENTS

 

  • September, 15-16 2006.................................................. The Eighth Toulouse Seminar on Macroeconomics, Bank of France, Toulouse.
  • October, 4 2006........................................................... Daniel McFadden, Nobel Prize 2000 and Professor at the University of California, will give the IDEI Annual Lecture on How Consumers Respond to Incentives. He will be the recipient of the second Jean-Jacques Laffont Prize sponsored by the City of Toulouse.

·         January, 15-16 2007 ...................................................... Conference on the Electricity Markets.

  • January, 16-18 2007.......................................................The Fourth Toulouse Lectures in Economics, sponsored both by Princeton University Press and the City of Toulouse, will be presented by Susan Athey, Professor at Harvard and Stanford.
  • January, 19-20 2007.......................................................Fourth Bi-Annual Conference on the Economics of the Software and Internet Industries.

 

WORKING PAPERS

 

Copies of all working papers can be found on the web site of the IDEI.

 

MORE APPLIED PAPERS

 

·         Access Pricing in the Postal Sector, IDEI Working Paper, n.319, by Philippe de Donder.

·         The Rules of Standard Setting Organizations: an Empirical Analysis, IDEI Working Paper, n.388, by Benjamin Chiao, Josh Lerner and Jean Tirole.

·         Private Labels, National Brands and Food Prices, IDEI Working Paper, n.402, by Christophe Bontemps, Valérie Orozco and Vincent Réquillart.

·         Testing Distributional Assumptions: a GMM Approach, mimeo, by Christian Bontemps and Nour Meddahi.

·         Valuing Satellite Systems to Support Fishing in a Dynamic Competitive Model, mimeo, by Fabrice Collard and Carole Haritchabalet.

·         Multiple Interest Rate Rules in the Euro Area, mimeo, by Patrick Fève, Julien Mathéron and Céline Poilly.

·         The Optimal Sequestration Policy with a Ceiling on the Stock of Carbon in the Atmosphere, IDEI Working Paper, n.400, by Gilles Lafforgue, Bertrand Magné and Michel Moreaux.

·          Substitution entre énergie, effet de serre et puits de carbone, IDEI Working Paper, n.401, by Gilles Lafforgue, Bertrand Magné and Michel Moreaux.

·         Les modèles dynamiques de la macro-économie : que choisir ?, mimeo, by Fabrice Collard and Patrick Fève.

·         Monetary Policy Inertia or Persistent Shocks?, mimeo, by Juan Carillo, Patrick Fève and Julien Mathéron.

·          Technology Shocks, Non-Stationary Hours and DSVAR, mimeo, by Martial Dupaigne, Patrick Fève and Julien Mathéron.  

·         A Dynamic Model of Food and Clean Energy, IDEI Working Paper, n.403, by Ujjayant Chakravorty, Bertrand Magné and Michel Moreaux.

 

MORE TECHNICAL PAPERS

·         Domestic Regulation, Asymmetric Information and the Pattern of International Trade, IDEI Working Paper, n.223, by David Martimort and Thierry Verdier.

·         Financing and Access in Cooperatives, IDEI Working Paper, n.404, by Patrick Rey and Jean Tirole.

·         Legal vs Ownership  Unbundling in Network Industries, IDEI Working Paper, n.405, by Jacques Crémer, Helmuth Cremer and Philippe de Donder.

·         Resale Price Maintenance and Asymmetric Information, mimeo, by David Martimort and Salvatore Piccolo.

·         Collusion and the Organization of Delegated Expertise, mimeo, by Denis Gromb and David Martimort.

·         The Strategic Value of Incomplete Contracts for Competing Hierarchies, mimeo, by David Martimort and Salvatore Piccolo.

·         Contracting for an Innovation under Bilateral Asymmetric Information, mimeo, by David Martimort, Jean-Claude Poudou and Wilfried Sand-Zantman.

·         Research Cycles, mimeo, by Yann Bramoullé and Gilles Saint-Paul.

·         Optimal Choice and Beliefs with Ex Ante Savoring and Ex Post Disappointment, mimeo, by Christian Gollier and A. Muerman.

·         On Sunspots, Habits and Monetary Facts, mimeo, by Stéphane Auray and Patrick Fève.

 

MeET the Researchers of IDEI:: Bruno Jullien

As a research director at CNRS, what explains your interest in economics?

Economics has developed specific and original tools that are badly known and not very used particularly in France. Thanks to these tools, it allows for combining a good level of abstraction with a rigorous analysis and a concern for empirical pertinence and social utility. So, it is possible for a modest researcher in economics, in others terms a researcher that does not claim he can change the world, to be both useful socially and creative. These two points motivate my research in economics.

 

What  motivates you in research at the moment?

At the moment, there exists a recent development of the literature of two-sided markets. A conference was organized on this topic last month in Toulouse. This topic has the particularity to combine a pragmatic approach with the use of game theory tools and network economics concepts. This brings a new light on the functioning of two-sided markets that play a growing role in particular in telecommunication industries, payment systems and peer to peer exchange of files on internet. This conference showed that it is possible to invest in fundamental research that is very attractive both for academic specialists, competition authorities, policy advisers and firms.

       

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