Friday, October 31, 2008
Posted by D. Daniel Sokol
The winners of the 2008 Compass Lexecon Prize have been announced. According to the press release:
The Compass Lexecon Prize Selection Committee is pleased to announce the winner of the second annual Compass Lexecon Prize. The Compass Lexecon Prize is awarded to a published or forthcoming paper in a peer-reviewed journal that, in the opinion of the Selection Committee, makes the most significant contribution to the understanding and implementation of competition policy. The 2008 winner, whose authors will share $10,000, is:
Ilya Segal of Stanford University and Michael Whinston of Northwestern University, for their paper, published in the American Economic Review, entitled “Antitrust in Innovative Industries”
“Antitrust in Innovative Industries,” by Ilya Segal and Michael Whinston, is a seminal paper that provides, for the first time, an analytic framework for studying the static and dynamic impacts of antitrust policy towards innovative industries in an integrated fashion. The framework developed by Segal and Whinston fosters coherent approaches to the age-old and much debated question whether competitive concerns about static efficiency should give way to the perceived needs of dynamic entry and investment. The authors introduce elegant representations of antitrust policy into growth models where successful entrants become continuing incumbents that must in turn grapple with new generations of innovative entrants. Here, the effects of antitrust policy on innovation incentives result from the policy’s net impact on an innovator's profits both when it is a new entrant and when it is subsequently an incumbent.