Industrial organisation

Kevin Callison, Robert Kaestner, Jason Ward, 13 October 2018

Researchers have long observed substantial geographic variation in the use of health care services. This column uses data on health care use among individuals who are uninsured as they approach age 65 and become eligible for Medicare to argue that most geographic variation is the result of supply-side factors that allow providers to exercise discretion over the levels of care provided. Policies aimed at reducing these discrepancies across regions may not only ‘bend the cost curve’, but may also directly reduce health risks arising from individuals receiving ineffective or unneccesary health care services.

Meng Liu, Erik Brynjolfsson, Jason Dowlatabadi, 12 October 2018

Most of us have taken a taxi that increased the fare by taking the long route. The column compares matched pairs of taxi and Uber journeys in New York City to investigate how often drivers took unnecessary detours. Uber drivers were less likely to do this, suggesting that Uber's innovations in fare structure and digital feedback have reduced moral hazard.

Katre Eljas-Taal, Neil Kay, Lucas Porsch, Katarina Svatikova, 12 October 2018

Collaborative platforms have quickly penetrated several services sectors. Statistics on the development of the collaborative economy are essential for appropriate policy responses but there are few available. This column presents a simple methodology for estimating the economic size of the collaborative economy, which is also relevant for the platform economy.

Costas Arkolakis, Natalia Ramondo, Andres Rodríguez-Clare, Stephen Yeaple, 08 October 2018

One consequence of the last decades of globalisation is that, thanks to multinational firms, goods are increasingly being produced far from where ideas are created. Using general equilibrium modelling, this column analyses the welfare and distributional effects of the recent wave of protectionism. Central to the results is the flexibility that multinational firms have in locating their innovation and production activities around the globe.

Laura Alfaro, Nicholas Bloom, Paola Conconi, Harald Fadinger, Patrick Legros, Andrew Newman, Raffaella Sadun, John Van Reenen, 26 September 2018

Economists have largely ignored the deep interdependency between integration and delegation. This column describes a new theory of integration and delegation choices aimed at shedding light on how these distinct elements of organisational design interact. Contrary to what is suggested by a naïve one-dimensional approach, the model predicts that delegation and outsourcing should be negatively correlated, a prediction that holds up well when the model is applied to data for thousands of firms across many industries and countries.

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