Papers by Michael Waterson
There are continued complaints on matters of event ticketing, particularly in music, despite rece... more There are continued complaints on matters of event ticketing, particularly in music, despite recent changes in legislation and in practice. This report, a development of ideas following from Waterson (2016), sets out a personal view on the market, focusing on the UK and in particular the music sector, as it now exists. In it, I ask and respond to a self-imposed question- what might an improved ticketing system set out to achieve? In my view, a desirable ticketing system would be one that puts consumers first, both in terms of ease, fairness and choice. Hence the title. Currently, many of the participants in the market do not have consumers foremost in mind, and the lesson from various other markets where technology has shown significant potential is that ultimately, a framework that provides what (most) consumers want wins out.
We investigate the London bus market, a large market with regular procurement of bus services, fo... more We investigate the London bus market, a large market with regular procurement of bus services, for possible collusion using a wide variety of techniques, making use of the data at our disposal. There is little evidence of collusion in bidding for contracts apparent from our data, despite some features of the market that might lead to collusive behaviour.
This paper takes a case study approach to analyse the evolution of competition in the market for ... more This paper takes a case study approach to analyse the evolution of competition in the market for local bus services in London. With the aid of a public dataset made available by Transport for London, the paper makes a preliminary assessment of whether competition is being maintained over time and what factors are determining its alleged success.
In Britain, the key source of renewable generation is wind, most abundant on the west coast of Sc... more In Britain, the key source of renewable generation is wind, most abundant on the west coast of Scotland, where there is relatively little demand. For this reason, an interconnector, the Western Link, was built to take electricity closer to demand. When the Link is operating, payments by National Grid to constrain wind farms not to produce will be lower, we may predict, since fewer or less restrictive constraints need be imposed. But the Link has not been working consistently. We empirically estimate the link’s value. Focusing on the three most recent episodes of outage, starting on 4th May 2018 up to 25th September 2019, our essential approach is to treat these outages as a natural experiment using hourly data. Our results reveal that the Link had an important role in costs saved and price constrained and MWh curtailed reductions. We estimate a cost-saving of almost £30m. However, the saving appears to drop over time, so we investigate wind farms’ behavior. We find that wind farms b...
Journal of Economic Dynamics and Control
We assess the extent of inertia in grocery retail prices using data on prices and costs from a la... more We assess the extent of inertia in grocery retail prices using data on prices and costs from a large supermarket chain in Colombia. Relative to previous work our analysis benefits from the daily frequency of the data and the availability of reliable replacement cost data. We uncover evidence supporting the existence of significant nominal rigidities in reference prices (three months) and even more so in reference costs (about five months). There is evidence that the price and cost rigidities differ depending on the type of product, being on average smaller in the case of perishable goods. Using an Error Correction Model framework, we examine the path of prices relative to costs, to determine the speed of adjustment of prices to shocks.
Energy Policy
Current wisdom considers that energy storage and generation must be separate. Integrating energy ... more Current wisdom considers that energy storage and generation must be separate. Integrating energy storage with generation lowers capital costs. Integrating energy storage with generation reduces total energy losses. Existing policies militate against such integrated systems being developed.
International Journal of Industrial Organization, 1994
© 1993 Massachusetts Institute of Technology All rights reserved. No part of this book may be rep... more © 1993 Massachusetts Institute of Technology All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the ...
This paper delivers a significantly different empirical perspective on micro pricing behaviour an... more This paper delivers a significantly different empirical perspective on micro pricing behaviour and its impact on macroeconomic processes than previous studies, largely resulting from the fact that our weekly price data for the three major British supermarkets spans a seven year period including the crisis years 2008-2010. We find that there is a large and significant change in the behaviour of prices from 2008 onwards: prices change more frequently and the average duration of price spells declines significantly. Several of our findings run strongly counter to established empirical regularities, in particular the high overall frequency of regular or reference price changes we uncover, the greater intensity of change in more turbulent times and the numerical dominance of price falls over rises. The pricing behaviour revealed also significantly challenges the implicit assumption that prices are tracking cost changes. JEL numbers: E30; E31; L81.
Microeconomics: Production, 2019
The paper studies competition for the market in a setting where incumbents (and, to a lesser exte... more The paper studies competition for the market in a setting where incumbents (and, to a lesser extent, neighboring incumbents) benefit from a cost advantage. The paper first compares the outcome of staggered and synchronous tenders, before drawing the implications for market design. We find that the timing of tenders should depend on the likelihood of monopolization. When monopolization is expected, synchronous tendering is preferable, as it strengthens the pressure that entrants exercise on the monopolist. When instead other firms remain active, staggered tendering is preferable, as it maximizes the competitive pressure that comes from the other firms.
Journal of the European Economic Association
We study competition for the market in a setting where incumbents (and, to a lesser extent, neigh... more We study competition for the market in a setting where incumbents (and, to a lesser extent, neighbouring incumbents) benefit from a cost or information advantage. We first compare the outcome of staggered and synchronous tenders, before drawing the implications for market design. We find the timing of tenders interrelates with the likelihood of monopolisation. For high incumbency advantages and/or discount factors monopolisation is expected, in which case synchronous tendering is preferable as it strengthens the pressure that entrants exercise on the monopolist. For low incumbency advantages and/or discount factors other firms remain active, in which case staggered tendering is preferable as it maximises competitive pressure coming from the other firms. We use bus tendering in London to illustrate our insights and draw policy implications.
… Honour of Keith Cowling, 2003
Throughout his academic career, Keith Cowling has been concerned with the increasing concentratio... more Throughout his academic career, Keith Cowling has been concerned with the increasing concentration of economic power and, in particular, its implications for the wider public interest. This is perhaps best illustrated in his 1982 book. Monopoly Capitalism, in which ...
International Journal of Retail & Distribution Management
Contents List of Figures vi List of Tables vii Preface x 1. Introduction 1 PARTI: THEORETICAL AND... more Contents List of Figures vi List of Tables vii Preface x 1. Introduction 1 PARTI: THEORETICAL AND POLICY UNDERPINNINGS 7 2. The Economics of Monopsony and Buyer Bargaining Power 9 3. Buyer Power Propositions 21 4. Definition and Measures of Buyer Power 27 5. ...
SSRN Electronic Journal
The German response to the Fukushima nuclear power plant incident was possibly the most significa... more The German response to the Fukushima nuclear power plant incident was possibly the most significant change of policy towards nuclear power outside Japan, leading to a sudden and very significant shift in the underlying power generation structure in Germany. This provides a very useful natural experiment on the impact of increasing proportions of renewable compared to conventional fuel inputs into power production, helping us to see how changed proportions in future as a result of policy moves in favour of renewables are likely to impact. We find through quasi-experimental exploration of a modified demand-supply framework that despite the swift, unpredicted change, the main impact was a significant increase in prices, partly caused by more frequent situations with unilateral market power. The price impact was also most significant in off-peak hours, leading to changed investment incentives. There were no appreciable quantity effects on the market, such as power outages, contrary to some views that the impacts would be significant. Furthermore, we find the sudden and unilateral phase-out decision by the German government has significantly affected electricity prices and thus competitiveness in neighbouring countries.
Energy Policy
The version presented here may differ from the published version or, version of record, if you wi... more The version presented here may differ from the published version or, version of record, if you wish to cite this item you are advised to consult the publisher's version. Please see the 'permanent WRAP URL' above for details on accessing the published version and note that access may require a subscription.
Transport Policy
The version presented here may differ from the published version or, version of record, if you wi... more The version presented here may differ from the published version or, version of record, if you wish to cite this item you are advised to consult the publisher's version. Please see the 'permanent WRAP url' above for details on accessing the published version and note that access may require a subscription.
Review of Agricultural, Food and Environmental Studies
I have an introductory economics textbook on my shelves that uses as an example of perfect compet... more I have an introductory economics textbook on my shelves that uses as an example of perfect competition BAgricultural markets^; I doubt it is the only such text to use this example. The purpose of the book under review, on one level, is to provide a comprehensive challenge to this perception. At every stage, from seed to supermarket, from farm to fast food outlet, it is challenged. In fact, the author argues, these markets are increasingly concentrated into relatively few firms, although often the level of concentration is not apparent. This is unashamedly an exercise in Political Economy, focusing on the questions of how concentration is changing in the food system and what enables or constrains the goals of dominant firms. The theme is that all such markets are becoming more concentrated, and that this is to be deplored. For much of the time, the focus is on the US market, but occasionally, the scope is worldwide. The book covers retailing, distribution, packaged foods, commodity processing, farming, agricultural inputs such as fertilisers and seeds, and the takeover and resistance of organics. Let us examine the author's treatment of these various areas, starting with retailing. Once the province of local shops, retailing has moved to an activity increasingly controlled by national and even international store chains. As several scholars have noted, the most obvious development, of significance particularly in the USA but also worldwide, has been the growth of Walmart. Undoubtedly, Walmart's growth was facilitated in part by the efficiencies in supply chains it was able to engineer. It also led to consolidation amongst existing chains, forced to compete more vigorously to retain share. Behind this, and less obvious, were the legislative changes, local tax incentives and changes in labour practices which the book documents. The author points out that a key legislative change in approach was the downplaying of the Robinson Patman Act of 1936. Although the Act, which
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Papers by Michael Waterson