BECCLE’s Simen Aardal Ulsaker: “On vertical restraints”

BECCLE's Simen Aardal Ulsaker defended his thesis at NHH, 1 September 2016.

BECCLE’s Simen Aardal Ulsaker defended his thesis at NHH, 1 September 2016.

BECCLE is proud to announce that BECCLE’s Simen Aardal Ulsaker, on thursday 1 September, defended his thesis, On vertical restraints: Essays in Industrial Organization, for the PhD degree at the Norwegian School of Economics.

The prescribed topic for the trial lecture was Resale Price Maintenance: Economic theories and legal treatment.

Ulsaker was a PhD Candidate at the Norwegian School of Economics (NHH), and is affiliated with BECCLE. He holds a master’s degree in economics from the University of Bergen. Ulsaker will continue in a postdoc position at NHH.

Simens supervisors were Lars Sørgard, now Director General of the Norwegian Competition Authority, and Thibaud Vergé, Professor, ENSAE/CREST and BECCLE. The evaluation committee consisted of Hans Jarle Kind, Professor, Department of Economics, NHH, and BECCLE, Jeanine Miklos-Thal, Professor, University of Rochester, and Patrick Rey, Professor, University of Toulouse.

Summary of the thesis:

Contracts between firms are often complex. Vertical restraints is a name for any contractual arrangement that comes in addition to a constant unit price. The thesis studies how vertical restraints affect not only the creation and division of profit in an industry, but also which products are made available for the final consumers, and at which prices.

The first chapter, which is co-written by the NHH professors Øivind Anti Nilsen and Lars Sørgard, illustrates how fixed fees that are paid in addition to a constant unit price can affect the welfare effects of a merger between upstream firms. Through analyzing a merger in the Norwegian market for eggs, the chapter shows how a merger that increases the market power of producers may leave consumer prices unchanged, and only, through increased fixed fees, lead to a shift in profit from retailers to producers.

The second chapter considers how the use of exclusionary contracts, that is, contracts where a buyer commits not to buy from other sellers, can limit the distribution of new and valuable products. A theoretical model is developed that illustrates how a producer selling an input to two competing firms can prevent entry of a potential competitor, by signing exclusionary contracts with the buyers.

Chapter three and chapter four discuss quantity rationing tariffs, that is, tariffs that limit the quantity a buyer can buy at a certain unit price. The chapters illustrate through theoretical models how such tariffs can affect consumer prices and the distribution of profits in an industry.