Approaches[ edit ] In general, two types of evidence can be distinguished when performing a meta-analysis: The aggregate data can be direct or indirect. AD is more commonly available e.
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In addition, recent papers are now available on the Department of Justice website at http: Department of Justice, Washington, DC. Any errors are my own. Abstract State franchise laws prohibit auto manufacturers from making sales directly to consumers.
This paper advocates eliminating state bans on direct manufacturer sales in order to provide automakers with an opportunity to reduce inventories and distribution costs by better matching production with consumer preferences.
Much attention in the plans has centered on getting labor costs under control. Among other measures addressed are ways to cut distribution costs. As part of its cost-cutting effort, GM has announced that it will reduce its dealership network from over 6, dealers today to 4, The cost of the auto distribution system in the United States has been estimated as averaging up to 30 percent of vehicle price.
GM initiated a build-to-order sales model in Brazil for its Chevrolet Celta economy car over eight years ago. Inthe Celta was among the sales leaders in Brazil. These bans on direct manufacturer sales are part of a broad array of state laws that bar manufacturer ownership of dealers and regulate entry and exit of dealers through territorial restrictions and provisions on dealer termination.
Analysis of the economic effects of these laws has led some to conclude that they harm consumers and should be eliminated.
Then the essential features of the direct manufacturer distribution model are described and compared with the traditional method of selling autos.
Discussion of the benefits of a direct distribution model to auto consumers and manufacturers follows, along with economic analysis of some of the concerns of dealers.
A conclusion addresses the question of federal involvement in this issue. The Auto Dealer Franchise System Early in the evolution of the auto industry direct manufacturer sales to consumers were not uncommon.
At that time, production processes had not yet been standardized and industry sales volumes were low. Introduction by Ford of the assembly line technique early in the twentieth century enabled high-volume production and ushered in the era of mass-market sales in the United States.
Ever since then manufacturers have sold cars through franchised dealerships. Selling through dealerships has offered several benefits to manufacturers historically. Auto production is a capital-intensive business and a franchise system allowed manufacturers to concentrate their resources upstream while accessing capital through franchise fees from independent entrepreneurs at the retail level.
Economies of scale in auto production also required having relatively few, large manufacturing operations located near essential supplies like steel.
This contrasted with the nationwide distribution network needed to reach consumers, who could be more effectively served through local dealerships in a better position to assess demand in particular markets and to provide service and repairs.
Since running a dealership can require making a substantial investment in real estate and assets like showrooms and service facilities, the franchise system also had to offer terms that would make it attractive to dealers.
This was accomplished voluntarily by contract, through franchise agreements, even prior to enactment of state franchise laws.
Typically such franchise agreements give a dealer exclusive rights to a particular geographic sales territory of a manufacturer. This type of arrangement allows dealers to realize a return on their investment while giving them incentives to undertake advertising and promotional activities and to provide services, like showroom displays, test drives and other types of consumer information, valuable to manufacturers in marketing their vehicles.
With the advent of the internet, some of the mutually beneficial nature of the franchise system for manufacturers and dealers has diminished, as information and access to services historically provided primarily by dealers has become more readily available.
Online buying services are an obvious example.
In addition, a variety of auto information, including pricing data and reviews, can be found online from sites like Edmunds and Consumer Reports. This raises the prospect of disintermediation, broadly defined as direct-to-consumer sales through reduction or elimination of the role of retailers.
With respect to autos, unlike the situation with books and CDs, most customers probably will continue to want some hands-on contact with the product before purchasing, likely implying a continuing, though possibly changed, role for dealers. Since the internet can potentially provide manufacturers with better information on consumer preferences than the traditional local franchised dealer, direct manufacturer sales may be one way through which that changed dynamic occurs.
Comparison of Direct Manufacturer Sales with Traditional Auto Distribution There are substantial differences between the auto industry and the personal computer PC industry in which Dell pioneered the direct manufacturer distribution model. Auto production is currently characterized by integral and closed product architecture where product design is critical.
There is much more product variety in autos than in PCs and the myriad auto components tend to be non-standardized without a common interface across models or companies.A comprehensive resource for transportation benefit cost analysis, maintained and updated by volunteers affiliated with the Transportation Research Board Transportation Economics Committee.
Other NEJM Group Learning. Clinical Examination of the Shoulder; Essential information students and residents need to approach residency with confidence: practical training information, career. Type or paste a DOI name into the text box. Click Go. Your browser will take you to a Web page (URL) associated with that DOI name.
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|You are here||These papers are intended to stimulate discussion and criticism of economic issues related to industries and activities in which the creation and promotion of competition may replace either monopoly or government regulation or both.|
|Technical Reports | Department of Computer Science, Columbia University||RCT1 Holcomb et al. The placebo was non-magnetic and the active device was an inhomogeneous mT G quadrapolar array.|
|Economic Effects - Transportation Benefit-Cost Analysis||The reason is that central banks react to variables, such as inflation and the output gap, which are endogenous to monetary policy shocks.|
|This difference is known as the on-the-run premium.|
So far, decomposition analyses of the drivers of national CO 2 emissions have typically considered the combined energy mix as an explanatory factor without an explicit consideration or separation of renewables.
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