Tuesday, February 9, 2016
Monoposony Exploitation in Professional Sport: Evidence from Major League Baseball Position Players, 2000-2011
Brad R. Humphreys (West Virginia University, Department of Economics) ; Hyunwoong Pyun (West Virginia University, Department of Economics) examine Monoposony Exploitation in Professional Sport: Evidence from Major League Baseball Position Players, 2000-2011.
ABSTRACT: Some professional athletes still face monoposony power in labor markets, underscoring the importance of estimating players' marginal revenue product (MRP) to assess its effects. We introduce two new empirical approaches, spline revenue functions and fixed-effects stochastic production functions, into the standard Scully (1974) approach to MRP estimation, and calculate Monoposony Exploitation Ratios (MERs) for position players in Major League Baseball over the 2001-2011 seasons. Estimates indicate that MERs are about 0.89 for rookie players, 0.75 for arbitration eligible players, and 0.21 for free agents. Recent collective bargaining agreements have reduced MERs for free agents, but had no effect on MERs for other players.
Ho, Katherine; Hogan, Joseph and Scott Morton, Fiona think about The Impact of Consumer Inattention on Insurer Pricing in the Medicare Part D Program.
ABSTRACT: Medicare Part D presents a novel privatized structure for a government pharmaceutical benefit. Incentives for firms to provide low prices and high quality are generated by consumers who choose among multiple insurance plans in each market. To date the literature has primarily focused on consumers, and has calculated how much could be saved if they chose better plans. In this paper we take the next analytical step and consider how plans will adjust prices as consumer search behavior improves. We use detailed data on enrollees in New Jersey to demonstrate that consumers switch plans infrequently and imperfectly. We estimate a model of consumer plan choice with inattentive consumers. We then turn to the supply side and examine insurer responses to this behavior. We show that high premiums are consistent with insurers profiting from consumer inertia. We use the demand model and a model of firm pricing to calculate how much lower Part D program costs would be ! if consumer inattention were removed and plans re-priced in response. Our estimates indicate that consumers would save $601 each over three years when firms’ choice of markup is taken into account. Cost growth would also fall: by the last year of our sample government savings would amount to $224 million per year or 4.1% of the cost of subsidizing the relevant enrollees.
Monday, February 8, 2016
Associate - Litigation & Trial Practice/Antitrust
The Washington, DC, office of Alston & Bird has an immediate opening for a Litigation & Trial Practice/Antitrust associate with 1-3 years' experience to join a growing antitrust team with a focus on government enforcement/merger matters. Experience with antitrust law (litigation, investigations, and/or counseling) is required, and previous work on Hart-Scott-Rodino Act filings is desired. Candidates must have excellent academic credentials as well as strong verbal, written, and interpersonal skills. Cover letters may be addressed to Stephanie Denney, Attorney Hiring Manager. Alston & Bird is accepting applications from all sources.
Applicants: please click here to be considered for this position.
Search Firms: please click here to submit your candidate for this position.
Zack Cooper; Stuart Craig; Martin Gaynor and John Van Reenen ask The Price Ain't Right? Hospital Prices and Health Spending on the Privately Insured.
ABSTRACT: We use insurance claims data for 27.6 percent of individuals with private employer-sponsored insurance in the US between 2007 and 2011 to examine the variation in health spending and in hospitals' transaction prices. We document the variation in hospital prices within and across geographic areas, examine how hospital prices influence the variation in health spending on the privately insured, and analyze the factors associated with hospital price variation. Four key findings emerge. First, health care spending per privately insured beneficiary varies by a factor of three across the 306 Hospital Referral Regions (HRRs) in the US. Moreover, the correlation between total spending per privately insured beneficiary and total spending per Medicare beneficiary across HRRs is only 0.14. Second, variation in providers' transaction prices across HRRs is the primary driver of spending variation for the privately insured, whereas variation in the quantity of care prov! ided across HRRs is the primary driver of Medicare spending variation. Consequently, extrapolating lessons on health spending from Medicare to the privately insured must be done with caution. Third, we document large dispersion in overall inpatient hospital prices and in prices for seven relatively homogenous procedures. For example, hospital prices for lower-limb MRIs vary by a factor of twelve across the nation and, on average, two-fold within HRRs. Finally, hospital prices are positively associated with indicators of hospital market power. Even after conditioning on many demand and cost factors, hospital prices in monopoly markets are 15.3 percent higher than those in markets with four or more hospitals.
Fink, Nikolaus ; Schmidt-Dengler, Philipp ; Stahl, Konrad and Zulehner, Christine present empirical findings in Registered cartels in Austria: An overview.
ABSTRACT: Cartels were legal to a large extent in Austria until the country's EU Accession in 1995. We examine archival material on registered horizontal cartels to learn about their inner working. Applying content analysis to legally binding cartel contracts, we comprehensively document different collusion methods along the lines described by Stigler (1964). Quota cartels employ regular reporting schemes and use compensation mechanisms for departures from set quotas. Specialization cartels divide markets, and rely the least on information exchange and punishment. Price and payment condition cartels primarily aim to prevent secret price cuts, requiring information provision upon request, allow for discretionary decision-taking and (sometimes immediate) punishment. These stylized facts on the contractual arrangements suggest that the possibility to write legally binding agreements was employed to address the usual obstacles to sustaining collusion.
Nancy Galini, UBC has an interesting paper on Promoting Competition by Coordinating Prices: When Rivals Share Intellectual Property. Worth downloading!
ABSTRACT: The paper examines technology agreements and the standards process from which they emerge when members supply inputs to the alliance while simultaneously competing with it. Under this overlapping ownership structure, pool members are horizontally related. I show that strategic complementarity between the downstream products owned by a member and those arising from the collaboration is sufficient for a pool to be pro-competitive. Although patent pools are more efficient than uncoordinated pricing, consumers are better off if an outside firm rather than a pool member owns the non-pool competing product. Antitrust rules facilitating efficient IP agreements under overlapping ownership and their implications for the direction of technological change are derived.
Gabszewicz, Jean J. ; Marini, Marco A. and Tarola, Ornella comment on Endogenous Mergers in Vertically Differentiated Markets.
ABSTRACT: This paper studies the incentives for firms competing in vertically differentiated markets to sign binding collusive agreements, as in the case of mergers and alliances. Empirical investigations show that firms involved in mergers and acquisitions revise prices and qualities as to maximize their joint profits. In a few cases merging firms are also observed shutting down some lines of activities (so called market pruning). In this paper we attempt to test these predictions by modelling a three-stage game in which, at the first stage, three firms selling goods independently in a vertically differentiated market can commit to sign either a full or a partial voluntary agreement (with a subset of firms) via a sequential game of coalition formation while, at the second and third stage they can optimally revise their qualities and prices, respectively. In such a setting we study whether some binding agreements (as full or partial mergers) can be sustained as sub! game perfect equilibria of the coalition formation game. Moreover, we analyse the final effects of different coalition structures on equilibrium qualities, prices and profits accruing to firms. We obtain the following results: (i) initial firms' heterogeneity appears a crucial factor for mergers to arise; (ii) although profitable, the grand coalition of firms (i.e. the whole market merger) is not the outcome of the finite-horizon negotiation, where only partial mergers arise; (iii) all stable mergers comprehends the firm producing the bottom quality good; (iv) all stable mergers reduce the number of variants on sale (market pruning); (v) stable mergers always increase the quality gap among variants. All model findings seem compatible with the existing empirical observations.
Sunday, February 7, 2016
Saturday, February 6, 2016
Job Number: 10366
Support the advancement of the Strategic Orientations of the Secretary-General, in particular as they relate to competition.
Assist in providing support to the Sherpa and the Sherpa team on targeted policy advice and on the Organisation’s contributions in the area of competition, including to the G20 and G7.
Contribute to ensure the global impact of the OECD competiton work, including through increased engagement with key partners, and in line with the global relation strategy of the OECD.
Contribute to flagship corporate initiatives such as NAEC, and horizontal projects such as Inclusive Growth, Innovation Strategy, Gender, among others.
In line with the Strategic Orientations of the Secretary-General, identify policy priorities, new directions of work and strategies in the area of competition law and policies, which will position the Competition Committee and the OECD as the leading source of analysis, policy advice and cross-country co-operation. Develop relevant projects that will deliver value to member and partner countries, and the OECD. Integrate the competition perspective into high priority OECD-wide projects and ensure the continued relevance of the work undertaken in light of the evolving needs of governments.
Design, plan, organise and supervise the Competition Division’s programme of work and its effective implementation, ensuring effective contributions to corporate outputs as well as coherence with the rest of the work of the Organisation.
Oversee and contribute to the development of key substantive OECD publications and working documents.
Promote understanding, awareness, use, and, where appropriate, adherence to the OECD’s flagship competition instruments and policy tools, including the OECD Recommendations on International Co-operation on Competition Investigations and Proceedings; on Fighting Bid Rigging in Public Procurement; on Competition Assessment and its related Toolkit; on Structural Separation in Regulated Industries; on Merger Review; on Effective Action against Hard Core Cartels.
Supervise, motivate and contribute to the professional development and performance management of staff to ensure delivery of high-quality work within set deadlines, effective working methods, a constructive working atmosphere and good communication.
Assist in mobilising and securing funding to support the programme.
Ensure optimal utilisation of available resources to meet the commitments of the Division in the conduct of its work.
Participate actively as a member of the Management Team of the Directorate.
Respond to briefing requests from the Secretary-General’s Office and other parts of the Organisation, co-ordinating the Division’s contributions, and, as appropriate, in co-operation with others in the Directorate.
Ensure effective communication with key stakeholders, the media and the general public in order to maximise the value, visibility and impact of the work of the Division.
Represent the OECD at high-level meetings and conferences involving senior competition policy makers and representatives of business, labour, academia, NGOs and the media. Lead high-level missions to OECD and other economies.
Build collaborative working relationships throughout the OECD and across other international organisations. Establish and maintain close contacts with national authorities, the private sector, academia, research institutes and the media.
Take responsibility for increasing co-operation with emerging and developing countries in these areas of work.
An advanced university degree in law and/or economics, preferably with a specialisation in competition law, industrial organisation or regulatory economics.
At least ten to fifteen years’ experience at a senior level, with at least four years in the application of competition policy and /or regulatory policy in one or more regulated industries, preferably acquired in a national or international administration responsible for the enforcement of competition law or for economic regulation, including managerial duties in addition to substantive area responsibility.
Additional private sector experience, e.g. in the competition practice of an economic consulting firm, would be an advantage.
Experience in participating in international high level meetings and dealing with Competition Authorities would be an asset.
Proven ability in setting strategic policy targets in the area of competition and in leading teams of multidisciplinary professionals to the succesful accomplishment of these targets.
Experience in the implementation of competition policies would be a desirable addition to the stategic, analytical and management competencies.
Fluency in one of the two OECD official languages (English and French) and knowledge of the other with a commitment to reach a good working level.
Knowledge of other languages would be an asset.
Please refer to the full list of OECD Core Competencies and the level 5 indicators.
Three-year fixed term appointment, with the possibility of renewal.
Monthly base salary starting from 9,395 EUR, plus allowances based on eligibility, exempt of French income tax
Friday, February 5, 2016
Competition Law Enforcement of Viet Nam and the Necessity of a Transparent Regional Competition Policy
Phan Cong THANH (Vietnam Competition Authority) addresses Competition Law Enforcement of Viet Nam and the Necessity of a Transparent Regional Competition Policy.
ABSTRACT: Competition is becoming an important issue among the countries of the Association of Southeast Asian Nations (ASEAN). However, having a transparent and positive competition policy is much more difficult than enacting a competition law. Competition policy strongly depends on the enforcement of competition law and the way the government positions competition law in its general policy for developing the national economy. This paper discusses the enforcement of Viet Nam’s competition law and argues for the need for a regional competition policy for ASEAN and the East Asia area which enhances an individual country’s competition policy and prevents conflicts of interest among countries.
Vince Eng Teong SEE (University of Malaya Centre of Regulatory Studies) analyzes The Competition Act 2010—the Issues and Development since Coming into Force.
ABSTRACT: Competition law was almost unheard of in the first hundred years after the Sherman Act was passed. However, the number of jurisdictions with a competition law increased dramatically in the last 20 years. One of the countries that joined the rank is Malaysia when it passed Competition Act 2010 and Competition Commission Act 2010. Competition Act 2010 represents an attempt to reduce the hitherto European competition jurisprudence to a concise piece of legislation supported by other guidelines. This paper will attempt to examine the two pieces of legislation, and explore various issues, both normative and practical. It will also look at some development that has taken place since the law came into force in January 2012, some cases, and initiatives of the Commission.
Jidong Zhou theorizes Competitive Bundling.
ABSTRACT: This paper proposes a model of competitive bundling with an arbitrary number of firms. In the regime of pure bundling, we find that relative to separate sales pure bundling tends to raise market prices, benefit firms, and harm consumers when the number of firms is above a threshold. This is in contrast to the findings in the duopoly case on which the existing literature often focuses. Our analysis also sheds new light on how consumer valuation dispersion affects price competition more generally. In the regime of mixed bundling, having more than two firms raises new challenges in solving the model. We derive the equilibrium pricing conditions and show that when the number of firms is large, the equilibrium prices have simple approximations and mixed bundling is generally pro-competitive relative to separate sales. Firms' incentives to bundle are also investigated.
Thursday, February 4, 2016
AOKI Reiko and ARAI Yasuhiro describe Evolution of Standards and Innovation.
ABSTRACT: We examine how a standard evolves when both a standard consortium or firm (incumbent) and an outside firm (potential entrant) innovate to improve the technology. The incumbent improves to deter entry, and the entrant can invest to counter the incumbent's attempt. We show that only when the technology is mature and inertia is sufficiently low will there be entry leading to the coexistence of both standards. When the technology is in its infancy, the incumbent deters entry by technology improvement (upgrade) for any level of inertia. The entrant is never able to drive the incumbent out of the market (replacement). Our results suggest that competition policy to control inertia is not a substitute for policies to promote technological innovation, and that coordination of the two policies is essential.
Apostolos Baltzopoulos (Konkurrensverket); Jaewon Kim (Konkurrensverket) and Martin Mandorff (Konkurrensverket) offer UPP Analysis in Five Recent Merger Cases.
ABSTRACT: A recent development in merger review has been the shift from an approach committed to market definitions, market shares and concentration index appraisals to more effect-based analyses. In this paper we Review and summarize the underpinnings of what has become a popular tool in identifying potentially problematic mergers, known as the Upwards Pricing Pressure (UPP) methodology and discuss how it has been applied in five recent cases reviewed by Konkurrensverket (the Swedish Competition Authority). The paper attempts to provide an all-in one guide for practitioners who are interested in getting a full grasp of how the UPP framework has been developed and how to apply it.
Corbae, Dean (University of Wisconsin‒Madison) and D'Erasmo, Pablo (Federal Reserve Bank of Philadelphia) analyze Foreign competition and banking industry dynamics: an application to Mexico.
ABSTRACT: The authors develop a simple general equilibrium framework to study the effects of global competition on banking industry dynamics and welfare. They apply the framework to the Mexican banking industry, which underwent a major structural change in the 1990s as a consequence of both government policy and external shocks. Given the high concentration in the Mexican banking industry, domestic and foreign banks act strategically in the authors’ framework. After calibrating the model to Mexican data, the authors examine the welfare consequences of government policies that promote global competition. They find relatively high economy-wide welfare gains from allowing foreign bank entry.
Lambie-Hanson, Lauren (Federal Reserve Bank of Philadelphia) and Lambie-Hanson, Timothy (Haverford College) explore Agency and incentives: vertical integration in the mortgage foreclosure industry.
ABSTRACT: In many U.S. states, the law firms that represent lenders in foreclosure proceedings must hire auctioneers to carry out the foreclosure auctions. The authors empirically test whether processing times differ for law firms that integrate the mortgage foreclosure auction process compared with law firms that contract with independent auction companies. They find that independent firms are able to initially schedule auctions more quickly, but when postponements occur, they are no faster to adapt. Since firms schedule the initial auction before contracting, independent auction companies have an incentive to conform to the law firms’ schedules in order to secure the contracts. The authors argue that this is evidence of a cost of integration stemming from poorly aligned incentives within the firm.
Wednesday, February 3, 2016
Readers are invited to vote for the cases, law firms, lawyers, economists and enforcers they believe excelled in 2015. You can vote for the 2016 awards here, until midnight EST on Friday 26 February.
Votes are limited to one per person.
The winners will be announced at GCR’s 6th Annual Awards Dinner on Tuesday 5 April in Washington, DC. At the dinner, we also will recognise the Lifetime Achievement Award honouree. Click here for more information on the awards dinner.
All nominations link to the relevant GCR news article on the matter in question. If you feel you or your organisation have not been properly represented on a case, please email GCRAwards@globalcompetitionreview.com
Thank you to everyone who submitted nominations. Vote early, and...just once!
The nominees are:
Merger control matter of the year – Americas
Creative, strategic and innovative competition work on a landmark merger control matter in the Americas.
Merger control matter of the year – Europe
Creative, strategic and innovative competition work on a landmark merger control matter in Europe.
Medialaan/Jim Mobile/Mobile Vikings
Merger control matter of the year – Asia-Pacific, Middle East and Africa
Creative, strategic and innovative competition work on a landmark merger matter in Asia-Pacific, the Middle East or Africa.
ITOCHU/CP and CITIC
DENKA/DuPont Neoprene business
Litigation of the year – Cartel defence
Creative, strategic and innovative litigation on behalf of a defendant.
Litigation of the year – Non-cartel defence
Creative, strategic and innovative litigation on behalf of a defendant.
Watson v Bank of America
Litigation of the year – Cartel prosecution
Creative, strategic and innovative litigation on behalf of a plaintiff or class.
CDS settlements in the US
Litigation of the year – Non-cartel prosecution
Creative, strategic and innovative litigation on behalf of a plaintiff or class.
Streetmaps v Google
Oracle v HP in Spain
Nationwide v South African Airways
KPN/Base abuse of dominance challenge
Behavioural matter of the year (Agency) – Americas
Creative, strategic and innovative work carried out in a behavioural matter on behalf of a defendant, a competition authority or a third party in the Americas.
Behavioural matter of the year (Agency) – Europe
Creative, strategic and innovative work carried out in a behavioural matter on behalf of a defendant, a competition authority or a third party in Europe.
Airplane engines and components inquiry
Behavioural matter of the year (Agency) – Asia-Pacific, Middle East and Africa
Creative, strategic and innovative work carried out in a behavioural matter on behalf of a defendant, a competition authority or a third party in Asia-Pacific, the Middle East or Africa.
BGF bid data in Korea
Matter of the year
Merger control, cartel, unilateral conduct, litigation or any other competition matter worldwide. Creative, strategic and innovative work by teams of in-house and external lawyers and economists.
Agency of the year – Americas
An agency in the Americas whose work in 2015 was particularly effective, strategic or innovative.
Agency of the year – Europe
An agency in Europe whose work in 2015 was particularly creative, strategic and innovative.
Agency of the year – Asia-Pacific, Middle East and Africa
An agency in Asia-Pacific, the Middle East or Africa whose work in 2015 was particularly creative, strategic and innovative.
Enforcement action of the year
The best decision or enforcement action from a competition authority or court in 2015.
Academic Excellence Award
An academic competition specialist who has made an outstanding contribution to national and/or international competition policy in 2015.
Economist of the year
A competition economist whose superior technical skill, practical judgement and excellence in client service in 2015 demonstrates that he or she is among the very best in the field.
Corporate counsel of the year
An in-house competition lawyer whose superior technical skill and practical judgement on behalf of his or her company in 2015 demonstrates that he or she is among the very best in the field.
Litigator of the year
A competition litigator whose superior technical skill, practical judgement and excellence in serving clients in court in 2015 demonstrate that he or she is among the very best in the field.
Dealmaker of the year
A lawyer whose superior knowledge, practical judgement and negotiation skills in merger clearance matters in 2015 demonstrate that he or she is among the very best in the field.
Lawyer of the year - Under 40
A competition lawyer under the age of 40 whose superior technical skill, practical judgement and excellence in client service in 2015 demonstrates that he or she is among the very best in the field.
Lawyer of the year
A competition lawyer whose superior skill, practical judgement and excellence in client service in 2015 demonstrate that he or she is among the very best in the field.
Regional firm of the year – Americas
A firm based solely in North, South or Central America that has had an outstandingly successful 2015in terms of the quality and quantity of its competition work.
Regional firm of the year – Europe
A firm based solely in Europe which has had an outstandingly successful 2015 in terms of the quality and quantity of its competition work.
Regional firm of the year – Asia-Pacific, Middle East and Africa
A firm based solely in Asia-Pacific, the Middle East and Africa which has excelled in 2015 through the quality and quantity of its competition work.
Shin & Kim
Johnson Winter & Slattery
Bergman, Mats A. (Department of Economics, Sodertorn University); Lundberg, Johan (Department of Economics, Umea University); Lundberg, Sofia (Department of Economics, Umea University) and Stake, Johan Y. (Department of Economics, Sodertorn University) are Using spatial econometrics to test for collusive behavior in procurement auction data.
ABSTRACT: In this paper we evaluate whether spatial econometric techniques can be used to test for collusive bidder behavior in public procurement auctions, using the submitted bids and procurement characteristics. The proposed method is applied to the so-called Swedish asphalt cartel, which was discovered in 2001. As our dataset covers the period 1995-2009, we are able to test for conditional independence between complementary cartel bids before and after the detection. Our estimates show a significant positive correlation between complementary cartel bids during the cartel period, whereas a non-significant (and negative) correlation is shown during the later period. The parameter estimate of interest also differs in magnitude between periods. Hence, we argue that the method suggested can be used to verify or possibly screen for collusive bidding behavior. The main advantage of this method is its relatively small data requirements.
Mariko WATANABE is Identifying Competition Neutrality of SOEs in China.
ABSTRACT: This paper attempts to identify competition neutrality of state-owned enterprises (SOEs) in three consumer electronics industries in China. First, I draw a benefit-price indifference curve at the mode of consumer surplus for each year, and a benefit-price supply curve by manufacturers and ownership types based on the demand estimates for the color TV (CTV), mobile phone, and air conditioning industries in the 2000s. These exercises indicate heterogeneous situations of market neutrality of SOEs in the Chinese consumer electronics industries. The air conditioning market shows a clear positive relationship between benefit and price for all ownership types. At the same time, no clear correlation between ownership and strategies focusing on price or benefit is observed. On the other hand, SOEs and privately-owned enterprises (POEs) in CTV and mobile phone markets concentrate their products based on lower prices and lower benefit area, namely, cost advantage strategies. Ownership type and strategies appear to have a correlation. Furthermore, prices become independent to the level of benefit for local firms. These tendencies are clearly observed in the price-benefit supply curve of the two markets. A simple model of differentiated competition with one agent committing predatory pricing in expropriating soft financial constraint shows that the price set by the rivals of a soft constrained firm is independent to the benefit.
Standardisation, Innovation and Consumers – What is Next in FRAND Licensing? 2 March 2016, 14:00-18:00
Standardisation, Innovation and Consumers – What is Next in FRAND Licensing? 2
March 2016, 14:00-18:00 BIICL, 17 Russell Square, London
This is a public event, open to both Competition Law Forum (CLF) members and non-members. This event will foster a balanced debate on antitrust issues in FRAND licensing in light of recent developments such the CJEU's Huawei v. ZTE ruling and the IEEE's patent policy change and their implications on consumer protection and innovation. The event will be followed by a drinks reception and networking.
- Mathew Heim, Vice President, Government Affairs, Qualcomm Inc.
- James Killick, Partner, White & Case LLP
- Dr Liza Lovdahl-Gormsen, Director of Competition Law Forum and Senior Research Fellow in Competition Law, BIICL
- Adrian Majumdar, Partner with RBB Economics London
- Thomas Vinje, Partner, Chairman, Global Antitrust Practice Group at Clifford Chance US LLP
- Dr Mike Walker, Chief Economic Adviser, Competition Markets Authority
Further speakers tbc
Find out more at www.biicl.org/event/1156