Patrick Degraba

Patrick Degraba
United States Federal Trade Commission · Bureau of Economics

Doctor of Philosophy Economics

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34
Publications
1,190
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813
Citations

Publications

Publications (34)
Article
Full-text available
Economists at the Federal Trade Commission engage in economic analysis of a diverse set of behaviors, practices, and policies in support of the agency’s consumer protection and competition missions as demonstrated by the four projects that are the focus of this article. Consumer protection economists provided economic analysis in the first two proj...
Article
The Federal Communications Commission can improve the transparency of its decision process by establishing a set of guidelines for its review of mergers. Its current process is opaque, and parties cannot discern the weights that it places on “public interest” goals in some areas and how those balance against harms in other areas. The antitrust agen...
Article
In its investigation of Intel, the Federal Trade Commission appears to have been pursuing a ‘downstream competition’ theory of harm, in which Intel Corporation made fixed payments to original equipment manufacturers (OEMs) in exchange for not using AMD processors. This allowed Intel to charge supra-competitive processor prices to OEMs and allowed O...
Article
Full-text available
The past year in economics at the Federal Communications Commission focused on protecting competition in developing online markets. Our review discusses important economic issues that are raised by the FCC’s Open Internet rulemaking (which is commonly referred to as “net neutrality”) and its review of Comcast’s programming joint venture with Genera...
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Over the past several years, government competition agencies and private plaintiffs have sued Intel challenging the legality of its relationships with original equipment computer manufacturers (“OEMs”). These lawsuits have combined to produce a detailed account describing Intel’s relationships with OEMs and analyzing the competitive effects of thes...
Article
This paper shows that demand asymmetries between a dominant input supplier and a smaller rival allow the dominant supplier to use exclusive contracts to sell its input at the monopoly price, even though the small rival remains in the market, offers its input at marginal cost, and is more efficient at serving a small segment of the market. The domin...
Article
I show that multi-product firms can compete for their more profitable customers by setting lower margins on goods that are purchased primarily by them, effectively offering them discounts without offering these discounts to less profitable customers. This suggests a theory of multi-product pricing in which a good's profit margin is inversely relate...
Article
It is widely believed that larger customers in a market can secure lower prices than smaller customers. This paper presents conditions under which risk averse sellers, who can distinguish larger customers from smaller customers, but who cannot observe customers' valuations, have an incentive to offer lower prices to larger customers. The intuition...
Article
Media outlet owners can modify their outlet’s content so as to persuade audiences to adopt positions consistent with their preferred ideologies. In this paper, we assume that outlet owners value such persuasion, and therefore will engage in it at the cost of some reduction in profits. We compare the level and diversity of persuasion that occur unde...
Article
The off-net-cost pricing principle argues that under a broad range of environments a positive “access” charge paid by originating networks to interconnected terminating networks would cause retail on-net usage rates to be set equal to their off-net counterparts, and that these rates would fully reflect the access charge. However, other work provide...
Article
This paper shows how rules restricting common ownership of multiple media outlets affect both the magnitude and diversity of the ideological content of programming. While in most industries the assumption that firms maximize profits is quite reasonable, we assume that media owners derive utility from the ideological content of programming (say, bec...
Article
When some customers are more profitable to serve than others, one might expect sellers to compete more vigorously for the more profitable customers. One way sellers might do this is to sell goods that are purchased primarily by the most profitable customers using a lower mark-up than on other goods. This allows the firms to give discounts to more p...
Article
In competitive telecommunications markets each carrier relies on competing networks to terminate internetwork calls. Regulators typically require the calling party's network to pay a termination fee to the called party's network equal to the terminating network's "incremental cost" of completing the call, effectively imposing all of the costs on th...
Article
Should the supplier of a bottleneck input be prevented from vertically integrating downstream unless the (perhaps regulated) price of the input is set equal to costs? This issue has arisen with respect to the entry of incumbent local exchange carriers into the provision of long distance services. While competitors (and likely society) would prefer...
Article
With competition in telecommunications markets networks must complete calls originated on competing networks. The payments for such "termination services" affect retail prices and therefore consumption of telecommunications. Regulators typically require the calling party's network to pay a termination fee to the called party's network equal to the...
Article
In a critique of my paper outlining the Central Office Bill and Keep (COBAK) proposal, Wright (2001) offers two sets of conditions under which a COBAK interconnection regime would not lead to efficient utilization. There could be conditions under which some interconnection regime other than COBAK would lead to higher social surplus measures in very...
Article
This paper reviews the recent literature on the economics of open source software. Two different sets of issues are addressed. The first looks at the incentives of programmers to participate in open source projects. The second considers the business models used by profit-making firms in the open source industry, and the effects on existing closed s...
Article
Full-text available
We examine the consequences of allowing a bottleneck input supplier to vertically integrate downstream and compete with users of the input when the input has a regulated price above cost. If the supplier maximizes the sum of short-run profits from the downstream market and input market, then allowing the vertical integration will increase social su...
Article
By initially selling goods only in bundles and subsequently selling unsold units individually, a multiproduct seller can create a buying frenzy in which his profit is higher than it would be if he sold all units individually at their market clearing prices. In this frenzy, high-valuation customers buy a bundle because they expect quantity rationing...
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DeGraba and Postlewaite (1992) show that the seller of a durable input can solve the time inconsistency problem by offering most-favored-customer (MFC) protection to buyers. McAfee and Schwartz (1994) show that if a supplier sells inputs to competing firms using two-part tariffs, MFC protection that allows a firm to replace its contract with a cont...
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This paper considers the incentives of a firm with power in a market for one good to tie in the sale of a complementary good even though the complementary good is produced in a zero profit market. If the zero-profit price of the tied good is greater than the marginal cost (which occurs for example when the technology is characterized by a fixed cos...
Article
I explain why a monopolist would knowingly create excess demand. Suppose customers initially do not know their valuation for a good but over time become informed. Although customers prefer purchasing after becoming informed, a monopolist prefers selling to customers while uninformed, because a group of uninformed customers has a more homogeneous (e...
Article
We present a technique for locating both an upper and a lower bound on equilibrium points of supermodular games by looking only at the first derivatives of the payoff functions at points of disequilibrium. This technique is useful for characterizing equilibria of games when the closed form solution is difficult to calculate, for performing comparat...
Article
Introducing a new product as a brand extension can both lower the cost of introduction and create a spillover effect that depends on its realized quality level. We show that these two facts along with a model of R&D in the presence of marketing uncertainty, explain the empirical observation that firms introduce brand extensions later than new-name...
Article
The author provides a model of endogenous lease duration determination in the context of the durable goods monopolist problem. He shows that infinitely many leases (per finite unit of time) are required to solve completely the time inconsistency problem, thus suggesting that leasing may not provide a practical solution. The author also provides a w...
Article
We consider a risk neutral final goods producer, operating with a concave production function. We show that when faced with the possibility of quantity rationing in the spot market for an input the producer will always pay a premium to purchase some units of that input in a forward market. A monopolistic supplier of the input can therefore earn add...
Article
We provide a simple model to investigate decisions on vertical integration/separation. The key feature of this model is that more than one input is required for the final products of the local downstream monopolists. Depending on their cost structure, downstream firms' decisions on vertical separation can be both strategic complements and strategic...
Article
I present a game-theoretic model of competition between a national firm and local firms in which the introduction of most-favored-customer clauses into the sales contracts of the national firm decreases all industry prices. The reason is that the price restriction makes the national firm a weak price competitor in each local market. This produces a...
Article
The purpose of this dissertation is to present several examples which provide some insight into how price discrimination influences equilibria in various types of markets. The results may be used to suggest how price protection policies and/or the Robinson-Patman Act might affect market outcomes. Each example is a game theoretic model of a market....

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