PPSRC - Public-Private Sector Research Center

PPSRC - Public-Private Sector Research Center


Research is the main focus point of Center PPSRC Activity. Research project conclusions will be disseminated through journals, academic conferences and discussion forums.

A few of the topics which the center would like to focus its attention on:

Regulation and Competition. With special emphasis on the study of regulated sectors such as telecommunications, media, energy, financial markets or health.

Innovation. Including topics like new technologies and patents.

Regional Economics and Industrial Policy. Emphasizing on the location of the economic activity and firm headquarters.

Public Economics and The Welfare State. Aspects related to the welfare state will be analyzed, with a special focus on those related to health economy.


The following are the projects the Center's team is currently working on, organized by topic:

Current Projects

Advances in Industrial Economics and Finances (2012-2014)
Xavier Vives, Miguel Antón, José Manuel Campa, Miguel Cantillo, Giovani Cespa, Ángel López, José L. Moraga and Gaizca Ormazabal
Sponsored by Ministerio de Economía y Competitividad

The Industrial Economics project gathers research effort from various research lines: search costs; the application of competition policy on energy markets in Europe and Spain; a model of competition in schedules; the role of endogenous public information and its impact on welfare; and the exclusion in oligopolistic markets.

The Finance project also comprises various research lines: the impact of short selling constraints on financial markets; the information and learning markets; the competitive rational expectations equilibria in a standard financial market context; the relationship between strategic complementarity, fragility and regulation; bankruptcies and massive fraud.

Industrial Economics and Finance (2009-2013)
Miguel Cantillo, Giovanni Cespa, Giulio Federico, Ángel López, Victor Martínez de Albéniz, Flavia Roldán and Xavier Vives
Sponsored by AGAUR

The research consists of two projects: Industrial Economics and Finance. The first examines competition and regulation in network industries. Results are sought for the design of practice and respond to competition issues, in particular: the relationship between competition and investment in R&D, competition in the banking industry, determining the location decisions of central offices and competitive interaction between producers and distributors. The second project focuses on:

  1. A welfare analysis in a competitive economy with asymmetric information and rational expectations, providing a characterization of the productive and allocative efficiency.
  2. The CAPM test performance to evaluate the effect of the bias of "data snooping".
  3. An analysis of the evolution of union contracts in the sale of corporate bonds.
  4. Investigation of the microstructure of markets and corporate governance.

Completed Projects

The effects of sustainable development policies of the EU in the economy and the sectors of construction and aluminium (2010-2011)
Sebastián Curet and José Luis Moraga

The ALCOA Foundation has awarded the IESE Public-Private Sector Research Center a grant in order to study the impact of EU Environmental policies on the economy. The European Union’s framework of policies for Sustainable Development is now under reform. A reform based on the understanding that perhaps the most damaging effects on Climate Change are not unavoidable but could be solved through design, innovation and a more rational and efficient use of energy. More energy efficiency in buildings, new and refurbished, is seen as key on the recast of these EU policies. The IESE Public-Private Sector Center researchers will aim to develop a framework of analysis for these policies and their potential reforms in order to assess the impact on the demand and the supply and on specific economic sectors, such as construction and aluminium.

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The Spanish Gas and Electricity Sector: Regulation, Markets and Environmental Policies (2010-2011)Giulio Federico

The aim of the report is to update the analysis presented in our report “Competition and Regulation in the Spanish Gas and Electricity Markets”, to the period 2008-2009. The report also contains a special chapter on the deisgn and implementation of environmental policies in the European and Spanish energy markets.

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Competition and regulation in the Spanish audiovisual market (2010-2011)
Luis Cabral and Flavia Roldán

This report provides an analysis of the television market in Spain in the international context with special emphasis on the study about the regulation and the competition policy of the industry imposed by new technology tends. From the perspective of the economic theory of industrial organisation, the regulation and the competition policy study the current structure and prospects for the sector as well as the current state of the regulation ant the television market competition in Spain.

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Liberalization in the Spanish Local Television Industry (2011)
Ricard Gil

The goal of this research project is to investigate the impact of the liberalization and deregulation in the local Spanish TV industry between 1996 and 2002. The study can be divided in two parts. First, it examines the relation between regulation and the degree of competition following the traditional structure-conduct-performance literature in industrial organization. Second, it explores the impact of regulation changes (through changes in competition) on business strategies. Specifically, it analyzes the effect of competition on the incidence of vertical integration in content production and pricing policies of stations during the period under study. The study of the relation between competition and business practices is important because they directly speak about the impact of competition on consumer surplus. While more in-house content production increases product variety in a market, higher incidence of price discrimination may increase or decrease consumer surplus and society welfare. This study finds that increases in competition increase product variety and decrease the incidence of price discrimination while increasing prices to viewers (of pay-per-view stations) and to advertisers (of broadcasting stations).

Advances in Industrial Economics, Game Theory and Finance (2009-2011)
Xavier Vives, Alessandra Cillo, Javier Gómez Biscarri, Miguel Cantillo, Ángel López, Pedro Saffi, Victor Martínez de Albéniz, Giovanni Cespa and Giulio Federico
Sponsored by Ministerio de Ciencia y Tecnología

This project is composed of three subprojects. The first subproject (Industrial Economics) deals with competition and regulation issues in network industries (energy, telecommunications and two-sided markets). The second subproject (Game Theory) focuses on the analysis of strategic complementarity in multi-stage games, the performance of simple decision-making heuristics in complex problems, a quantitative measurement of regret theory, and the analysis of the interaction between time and uncertainty in decision making.

The third subproject (Finance) focuses on: a welfare analysis of rational expectations equilibria in a competitive economy with asymmetric information, an out of sample test of the CAPM, short selling restrictions, how accounting standards affect models of return and risk factors, syndicate agreement contracts to sell corporate bonds, market microstructure and corporate governance, and how the recent financial sector turmoil has affected equity returns in banking institutions.

Research Project “Subprograma Juan de la Cierva” (2009-2011)
Ángel L. López

This research project is composed of three subprojects that deal with related areas of economics: Network Economics, Industrial Economics and Banking. The first subproject deals with competition and regulation issues in network industries (energy and telecommunications). The aim of this research is to provide insights that can help to propose policy recommendations and remedies. This subproject is composed of four different topics: 1. divestments in the electricity sector; 2. Mobile telecommunications: foreclosing competition through mobile termination rates and impact of mobile termination rates on customer poaching and social welfare; 3. convergence in the European broadband market; 4. competition among Internet backbone providers. The second subproject focuses on two-sided markets. In particular, this research analyses R&D and investment decisions in two-sided markets. The third subproject analyses the effectiveness of different government policies to prevent the emergence of banking crises.

Consolider-Ingenio 2010 (2006-2011)
Luís Cabral, Bruno Cassiman, Antonio Dávila, Ángel López, Núria Mas, José Luis Moraga, Joan Enric Ricard, Carles Vergara and Xavier Vives, together with UPF
Sponsored by Ministerio de Ciencia e Innovación

"Strengthening the economy" is an initiative that is ongoing since 2006, involving different universities and high-level research centers. The project objective is to promote a significant advance in the state of knowledge or establish new lines of original research and updated on the border of knowledge, incorporating, where possible, a strong component of technology transfer and results and covering both non-oriented basic research as basic fundamental research oriented.

Football Economics. Proceedings of the Armand Carabén Workshop on Sports Economics (2009-2010)
Jordi Galí and Xavier Vives
With the collaboration of FC Barcelona.

This volume contains the proceedings of the Armand Carabén Workshop on Football Economics, which was held on the premises of IESE on November 24, 2009.

The core of the present volume consists of three papers (together with their discussions) on three different areas of football economics. The first contribution, by Pepita Miquel-Florensa and Paul Seabright provides an overview of the main issues involved in the sale of football broadcasting rights.

The second contribution, by Antonio Dávila, George Foster and Norm O’Reilly, examines alternative approaches to the organization of sports leagues and contrasts the main features of European football leagues with those of other popular U.S. sports. The third paper, written by Bernd Frick, analyzes the determinants of player remuneration as well as the link between this remuneration and player performance.

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Competition and Regulation in the Spanish Telecoms Market (2009)
Ángel L. López with the collaboration of Sandra Jódar.

The main objective of this project is to provide an overview of the recent performance of the Spanish telecommunications sector, and to provide an analysis of the current status of regulation and competition in the relevant markets that is grounded in the economic theory of industrial organisation and regulation. This report intends to contribute to the ongoing debate on the appropriate regulation of the Spanish market, to highlight areas where further progress is required and ultimately to derive from the analysis some policy recommendations.

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Competition Policy in the EU. Fifty Years on from the Treaty of Rome (2009)
Xavier Vives, Philip Lowe, Jorge Padilla, John Vickers, Massimo Motta, Bruce Lyons, David Spector, Martin Hellwig, Jordi Gual, Elena Carletti, Richard Green, William E. Kovacic.

This book is the product of a conference organized by the Public-Private Research Center of IESE Business School in commemoration of the 50 years of the Treaty of Rome and of the 50 years of IESE. The aim of the conference was to take stock and look ahead in the development and implementation of competition policy in the European Union, with the hope that the book contributes to advance our knowledge on the application of economics to competition policy, a better design of law and of institutions, and to transatlantic convergence (inasmuch as this is efficient).

Academic Journals (2009)
Doh-Shin Jeon

These projects study some new issues raised by the change from print journals to electronic journals such as open access, interconnection among journal websites and bundling. This project will be three outputs:

  • The Pricing of Academic Journals: A Two-sided Market Perspective With Jean-Charles Rochet (University of Toulouse, France)
  • Interconnection Among Academic Journal Websites and CrossRef With Domenico Menicucci (University of Firenze, Italy)
  • Bundling and Incentives to Introduce New Academic Journals With Domenico Menicucci (University of Firenze, Italy)

Competition and Regulation in the Spanish Gas and Electricity Markets (2008)
Giulio Federico and Xavier Vives with the collaboration of Natalia Fabra

The aim of the report is to present an overview of key regulatory and market developments in the Spanish energy sector over the previous year. The report provides an analytical summary of the main issues affecting the Spanish energy market, and seek to become reference reading for the academic, regulatory and business community with an interest in the market.

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Competing Complements (2008)
Ramon Casadesús-Masanell, Barry Nalebuff and David Yoffie

Consider two strict complements, A and B: the bundle (A, B) is valuable, but neither A or B alone are of any value. We study competition between vertically differentiated manufacturers of A when there is a monopoly in B. The paper is motivated by competitive interactions between Intel, AMD and Microsoft, two semiconductor manufacturers and a monopolist supplier of operating systems.

Regulatory Reform, Development and Distributive Concerns (2007)
Jordi Gual, Francesc Trillas and Gianandrea Staffiero

In the first part of the project, now under review by the “Journal of Economic Surveys”, a review was made of the literature about “Regulation of network and redistribution companies in developing countries”, based on contributions by Laffont, Waddams-Price, Easterly and Servén, Kessides and Shirley, among others. For the second phase, an international team has been created with the aim of analyzing the effects of the liberalization of network markets, of competition in mobile phone network and of the companies productivity. Regulatory institutions in developing countries will also be studied.

Stochastic Market Sharing, Partial Communication and Collusion (2007)
Heiko Gerlach

This paper analyzes the role of communication between firms in an infinitely repeated Bertrand game in which firms receive an imperfect private signal of a common value i.i.d. demand shock. It is shown that firms can use stochastic, inter-temporal market sharing as a perfect substitute for communication in low demand states.

Information Sharing: Economics and Antitrust (2007)
Xavier Vives

Firms may exchange information about current and past behavior, such as customer transaction data as well as cost and demand conditions. This paper will survey the incentives to share information and the welfare consequences in static (non-collusive) models, the analysis of the collusive potential of information exchange, the impact of information technology on transparency and unilateral and coordinated exercise of market power, and some competition policy implications.

Good governance of public companies and regulatory bodies (2007)
Xavier Vives

The project analyzes the best practices of good governance in public and regulatory bodies with the aim of giving recommendations on what measures should be taken to stimulate them.

Contracts, Entry and Communication (2007)
Heiko Gerlach

This paper analyzes the incentives of an innovative firm to announce entry when the incumbent can write long-term contracts with consumers. It investigates the impact of the entrant's information provision on the optimal contract proposal by the incumbent and show that the incentives to announce are highly non-linear in the innovation step size. From a social planner's point of view the incumbent introduces too high switching costs for consumers and there is too little announcement of big innovations. Consumers might be better off with higher switching cost and less announcements. In an extension it is shown that the entrant might be better off by announcing entry to the incumbent only and set the contracts terms collusively.

Determinants of Entry Modes Choice in Emerging Economies: Bargaining Between Host States and Investors in the Water Industry (2006)
Hugo Zarco-Jasso

In recent years, the functioning of public and private organizations has been subjected to ever increasing demands from society. Nowadays, private participation in infrastructure projects is referred to as public-private partnerships (PPPs). Emphasis is no longer on deciding whether to delegate some activities to the private sector, nor on discussing the advantages of large private firms versus public agencies. What are the determinants of entry modes as the outcome of bargaining between host countries and private investors? This is the question that we seek to address in this paper.

A Simple Access Pricing Rule to Achieve the Ramsey Outcome in Two-Way Access (2005)
Doh-Shin Jeon

This project on the telecommunications industry provides a general approach to the issue of access pricing among interconnected networks and presents some novel results.

Study on a Methodology for the Selection of Criteria for Priority Setting and Impact Assessment in the Anti-trust Field (2004)
Núria Mas and Jordi Gual

The main objective of this study is to develop a methodology that allows the European Commission to better target its administrative and human resources in the enforcement of Articles 81, 82 and 86 of the EC Treaty. Our goal is to develop a method for detecting in which industries anti-trust infringements (articles 81 and 82) are more likely to take place. Then we combine these probabilities of an infringement to occur with a ranking of the different anti-competitive practices according to their impact on consumer welfare.

Workers’ Pay Incentives in a Regulated Labor Market Environment (2004)
José E. Galdón Sánchez, Jordi Gual and Maia Güell

In this paper, a unique plant level data set is used to investigate how firms set workers’ pay incentives in a regulated labor market environment. In particular, we study the problem of setting incentives when firms are also facing union constraints. Our data comes from a survey of firms from Spain, which is probably the OECD country with the most regulated labor market. Moreover, we study to what extent optimal deviations from full incentives come from the imposition of wage floors by unions.

Analysis of the Effect of M&A Amongst US Hospitals for the Adoption of New Technologies (2004)
Núria Mas and Giovani Valentini

During the 1990s, the US healthcare market experienced a wave of hospital mergers that raised the average hospital Herfindahl-Hirschman Index (HHI) in health services areas from 0.19 to 0.26. The purpose of this study is twofold: first, to analyze the impact of such consolidation on the adoption of new medical technologies; second, to determine the effect that different hospital characteristics have on the different types of mergers.

Models of competition in electrical sector
Xavier Vives

The research proposes to model the competition in generation in electrical sector by means of a model of strategic game in functions of offer in which the companies have privated information about the costs of production (for example, the availability of their headquarters). There will be analyzed which is the number of companies necessary for a given level of competitiveness.