Invitation to PhD defense: Morten Sæthre

PhD Defense

13 January 2015 22:08

(updated: 7 March 2016 22:12)

Invitation to PhD defense: Morten Sæthre

On Friday 16 January 2015 Morten Sæthre will hold a trial lecture on a prescribed topic and defend his thesis for the PhD degree at Norwegian School of Economics.

Title of the thesis: "On Input Markets and Incentives: Essays in Empirical Industrial Organization"

Time and place for the defense: 15:15 in the Jebsen Centre, NHH

The broad topic of the thesis is how input market conditions can influence the behavior of firms.

The first chapter studies how wages change in Norwegian manufacturing firms with varying degrees of unionization when they undergo a foreign acquisition. The results show that the wage difference due to unionization disappears after a foreign acquisition.

The second chapter develops a general empirical framework to identify demand and market power in firms that choose both observed prices and unobserved sales effort. The key point is to utilize the incentive generated by differences in price-cost margins to influence consumer choice. A simple example is the incentive of a retailer to make consumers choose a product on which it enjoys higher margins. The method is tested on a situation of consumer choice between originator and generic drugs in the regulated pharmaceutical retail market. The results show that such incentives are important, and that incorporating them into the empirical model provides better predictions for market development.

The last chapter studies pharmaceutical retailers' role in the sale of parallel traded drugs. The incentive to adjust supply of substitutable drugs is utilized to explain situations where prices to consumers are de facto fixed due to generous reimbursement and price caps, and parallel traded drugs enjoy large market shares. This incentive is driven by differences in profitability of the different drugs. A model of price setting by parallel and direct importers and supply adjustment by retailers is estimated, which is subsequently used to evaluate how parallel trade in drugs affects consumer welfare and the division of profits in the domestic market. The main result is that benefits to consumers are small, while retailers gain a lot due to both low competition between retailers and the ability to adjust supply.

Members of the evaluation committee

Professor Frode Steen, leader. NHH Norwegian School of Economics
Professor Otto Toivanen, Katholieke Universiteit Leuven, Belgium
Professor Sofia Berto Villas-Boas, University of California, Berkeley

Supervising committee

Professor Lars Sørgard, Department of Economics, NHH
Assistant Professor Ragnhild Balsvik, Department of Economics, NHH
Professor Pierre Dubois, Toulouse School of Economics

Prescribed topic for the trial lecture:

"The relationship and measurement of incentives and competition"

Time of the trial lecture: 13:15 in the Jebsen Centre, NHH

About Morten Sæthre

Morten Sæthre has been PhD-candidate at the Department of Economics, NHH. Sæthre has an MSc - Master in Economics at NHH Norwegian School of Economics. He has been Visiting Scholar at the Department of Economics, UC Berkeley, and at Toulouse School of Economics. He is also an affiliate researcher at the Bergen Center for Competition Law and Economics.

The trial lecture and thesis defence will be open to the public. Copies of the thesis will be available from the NHH library.