Repository logo

Browsing by Author "Mathewson, Frank"

Filter results by typing the first few letters
Now showing 1 - 2 of 2
  • Thumbnail Image
    ItemOpen Access
    Agency Contracts with Long-Term Customer Relationships
    (Te Herenga Waka—Victoria University of Wellington, 2005) Quigley, Neil; Hortsmann, Ignatius; Mathewson, Frank
    In certain types of industries contracts for sales agents include both commission payments for sales and clawbacks of these payments if existing clients are not retained. This paper provides a model that shows that contracts with these features arise in equilibrium in environments having: i) up-front selling costs that are re-couped from on-going sales ii) heterogeneous customers iii) limited sales agent access to capital markets and iv) imperfect commitment by customers and agents to long-term contracts. We test the model using information on insurance sales agent contracts in New Zealand prior to and after bank entry into the insurance sales market. Increased policy lapse rates for traditional insurances post bank entry indicate that banks were cream-skimming customers. Our model predicts that in this case bank entry should reduce the value of both initial commissions paid for sales and the clawback for policy lapses. The data support this prediction.
  • Thumbnail Image
    ItemOpen Access
    The Efficiencies Defence in Merger Analysis in Canada and the US
    (Te Herenga Waka—Victoria University of Wellington, 2000) Mathewson, Frank
    Whatever the statutory differences or language differences in Guidelines between Canada and the US the application of competition rules and procedures is remarkably similar in the two countries. Recent adjustments to the role of efficiencies in merger analysis in the two countries reveal a potential departure from this claim. The Canadian Competition Bureau (the agency responsible for the implementation of competition policy in Canada) has moved from a clear and focused position on the role of efficiencies in merger analysis to one that is much less certain and focused. For its part the US agencies (Department of Justice and the Federal Trade Commission) have moved from a more ambiguous or undefined position on the role of efficiencies in merger analysis to one that is more certain and focused.