I am an economist with a general interest in microeconomics and a particular interest in industrial organization and vertical contracting. On this page you can find the latest versions of my research papers.


Bureau of Economics
U.S. Federal Trade Commission
Email: pramezzana@ftc.gov



Recent Working Papers:         [Click here for publications and all working papers]

Whereas in some industries retailers distribute the products of all suppliers, in other industries they differentiate themselves from their rivals by becoming the exclusive distributors of some products, which results in incomplete distribution networks. To study this phenomenon, I analyze a model where retailers first play a decentralized, multilateral contracting game with suppliers and then compete in the downstream market. I use this model to study the equilibrium structure of distribution networks under different assumptions regarding supplier and retailer differentiation, the mode of downstream competition, the availability of exclusive contracts and two-part tariffs, and the presence of hold-up in negotiations.

In a model where the incumbent producers of two complementary components can use exclusive contracts to deter entry, I fully characterize the pricing and contractual externalities that arise between the incumbents and their implications for equilibrium outcomes. Among other results, I show that such externalities may lead to all-or-nothing entry deterrence, multiple equilibria, and the emergence of a group of buyers who accept exclusive offers from both incumbents. I also show that, depending on parameter values, vertical integration between incumbents can reduce welfare by facilitating entry deterrence or increase welfare by allowing more efficient pricing and use of resources.

 

This paper studies the competitive effects of a variety of publicly observable nonlinear contracts and vertical restraints in bilateral duopoly. When suppliers offer menus of contracts and inputs are sufficiently differentiated, there exist equilibria in which both retailers purchase from both suppliers at wholesale prices above marginal cost to soften downstream competition. In these common agency equilibria, vertical restraints such as all-units discounts, market-share requirements and no-steering rules affect upstream competition for marginal sales and lead to higher prices and lower welfare than two-part tariffs. Whereas with sequential contracting the industry monopoly outcome is the unique equilibrium, with simultaneous contracting coordination failures may lead to less profitable equilibria.


Publicly available policy work:

Here is a very short Overview of the economics of price parity agreements I gave at a meeting of the International Competition Network in Rome in 2017
 

Disclaimer: Any opinions on this website are mine alone and do not represent those of the Federal Trade Commission or its Commissioners.