Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Tuesday, November 3, 2009

European Competition Law - A Commentary

Posted by D. Daniel Sokol

Rainer Bechtold, Ingo Brinker, Wolfgang Bosch and Simon Hirsbrunner(all Gleiss Lutz) have a book out on European Competition Law - A Commentary.

BOOK ABSTRACT: European Competition Law is now among the most important branches of European law, and is of considerable importance to business people all over the world, and to lawyers practising in competition (antitrust) law. Much of the law is now directly applicable in the courts of the Member States, and displaces the relevant domestic law. This Commentary covers in detail EC Treaty Articles 81 – 86, Council Regulation No 1/2003 on the implementation of the rules on competition, Six Block Exemption Regulations (namely Commission Regulation (EC) No 2659/2000 concerning categories of research and development agreements, Commission Regulation (EC) No 1400/2002 concerning vertical agreements and concerted practices in the motor vehicle sector, Commission Regulation (EC) No 2658/2000 concerning categories of specialisation agreements, Commission Regulation (EC) No 772/2004 concerning categories of technology transfer agreements, Commission Regulation (EC) No 358/2003 concerning certain categories of agreements, decisions and concerted practices in the insurance sector, Commission Regulation (EC) No 2790/1999 concerning categories of vertical agreements and concerted practices) and EC-Merger Regulation No 139/2004.

November 3, 2009 | Permalink | Comments (0) | TrackBack (0)

Monday, November 2, 2009

Welfare Enhancing Mergers Under Product Differentiation

Posted by D. Daniel Sokol

Tina Kao and (ANU - Econ) Flavio Menezes (Queensland - Econ) analyze Welfare Enhancing Mergers Under Product Differentiation.

ABSTRACT: This paper considers a model of duopoly with differentiated products to examine the welfare effects of a merger between two asymmetric firms. We find that for quantity competition, the parameter range for welfare enhancing merger widens if the products are closer substitutes. On the other hand, mergers are never welfare enhancing in this setting when firms compete in prices.

November 2, 2009 | Permalink | Comments (0) | TrackBack (0)

Assessing Competition with the Panzar-Rosse Model: The Role of Scale, Costs, and Equilibrium

Posted by D. Daniel Sokol

Jacob A. Bikker (University of Utrecht, Economics), Sherrill Shaffer (University of Wyoming, Department of Economics and Finance), and Laura Spierdijk (University of Groningen, Faculty of Economics & Business) write on Assessing Competition with the Panzar-Rosse Model: The Role of Scale, Costs, and Equilibrium.

ABSTRACT: The Panzar-Rosse model has been widely applied to assess competitive conduct, often in specifications controlling for firm scale or using a price equation. We show that neither a price equation nor a scaled revenue function yields a valid measure for competitive conduct. Moreover, even an unscaled revenue function generally requires additional information about costs and market equilibrium. Our theoretical findings are confirmed by an empirical analysis of competition in banking, using a sample covering more than 110,000 bank-year observations on almost 18,000 banks in 67 countries during 1986-2004.

November 2, 2009 | Permalink | Comments (0) | TrackBack (0)

State Resale Price Maintenance Laws After Leegin

Posted by D. Daniel Sokol

Michael Lindsey (Dorsey & Whitney) has created a very useful guide on State Resale Price Maintenance Laws After Leegin.

November 2, 2009 | Permalink | Comments (0) | TrackBack (0)

Hotelling's Spatial Competition Reconsidered

Posted by D. Daniel Sokol

Takatoshi Tabuchi (Faculty of Economics, University of Tokyo) analyzes Hotelling's Spatial Competition Reconsidered.

ABSTRACT: Oligopoly models are usually analyzed in the context of two firms anticipating that market outcomes would be qualitatively similar in the case of three or more firms. This is not an exception in the literature on Hotelling's location-then-price competition. In this paper, we show that the main findings in Hotelling's duopoly, brand bunching and the max-min principle of product differentiation no longer hold once three or more firms are allowed to enter the market. That is, oligopolists with three or more firms proliferate brands and neither maximize nor minimize product differentiation.

November 2, 2009 | Permalink | Comments (0) | TrackBack (0)

Competitive Pressure and the Adoption of Complementary Innovations

Posted by D. Daniel Sokol

Tobias Kretschmer (Institute for Communication Economics, LMU Munich), Eugenio Miravete (Department of Economics, University of Texas at Austin), and José Pernías (Department of Economics, Universidad Jaume I de Castellón) explain Competitive Pressure and the Adoption of Complementary Innovations.

ABSTRACT: Liberalization of the European automobile distribution system in 2002 limits the ability of manufacturers to impose vertical restraints, leading to a substantial restructuring of the industry and increasing the competitive pressure among dealers. We estimate an equilibrium model of profit maximization to evaluate how dealers change their innovation strategies with this regime change. Using French data we evaluate the existence of complementarities among adoptions of innovations and the scale of production. We conclude that as firms expand their scale of production they concentrate their effort in one type of innovation only. Results are robust to the existence of unobserved heterogeneity.

November 2, 2009 | Permalink | Comments (0) | TrackBack (0)