Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Friday, August 27, 2010

The impact of competition on technology adoption: an apples-to-PCs analysis

Posted by D. Daniel Sokol

Adam Copeland and Adam Hale Shapiro describe The impact of competition on technology adoption: an apples-to-PCs analysis.

ABSTRACT: We study the effect of market structure on a personal computer manufacturer’s decision to adopt new technology. This industry is unusual because there exist two horizontally segmented retail markets with different degrees of competition: the IBM-compatible (or PC) platform and the Apple platform. We first document that, relative to Apple, producers of PCs typically have more frequent technology adoption, shorter product cycles, and steeper price declines over the product cycle. We then develop a parsimonious vintage-capital model that matches the prices and sales of PC and Apple products. The model predicts that competition is the key driver of the rate at which technology is adopted

August 27, 2010 | Permalink | Comments (0) | TrackBack (0)

Managerial Incentives and Stackelberg Equilibria in Oligopoly

Posted by D. Daniel Sokol

Marcella Scrimitore (University of Salento) has written on Managerial Incentives and Stackelberg Equilibria in Oligopoly.

ABSTRACT: The paper investigates both quantity and price oligopoly games in markets with a variable number of managerial and entrepreneurial firms which defines market structure. Following Vickers (Economic Journal, 1985) which establishes an equivalence between the equilibrium under unilateral delegation and the Stackelberg quantity equilibrium, the outcomes of these games are compared with the ones in sequential multi-leaders and multi-followers games. The profitability of a managerial/entrepreneurial attitude vs leadership/followership is shown to critically depend upon the kind of strategy, price or quantity, and upon the assumed market structure. Indeed, the latter turns out to be crucial in determining the equivalence result that is shown to be contingent on the assumption that just one leader or one managerial firm operate in the market. A welfare analysis finally highlights the differences between the delegation and the se! quential games, focusing on the impact of market structure and imperfect substitutability on the equilibria of the two games.

August 27, 2010 | Permalink | Comments (0) | TrackBack (0)

Thursday, August 26, 2010

Joint Defense or Research Joint Venture? Reassessing the Patent-Challenge-Bloc's Antitrust Status

Posted by D. Daniel Sokol

Joseph Scott Miller (Lewis & Clark Law) has posted Joint Defense or Research Joint Venture? Reassessing the Patent-Challenge-Bloc's Antitrust Status.

ABSTRACT: A patent challenger who defeats a patent wins spoils that it must share with the world, including all its competitors. This forced sharing undercuts an alleged infringer's incentive to stay in the fight to the finish - especially if the patent owner offers an attractive settlement. Too many settlements, and too few definitive patent challenges, are the result. I have argued previously that a litigation-stage bounty would help correct this tilt against patent challenges, for it would provide cash prizes to successful patent challengers that they alone would enjoy. Even the best-designed bounty, however, would likely fail to encourage patent validity challenges in all the cases where such encouragement would be salutary. Others have urged that, going forward, post-grant administrative review is a more promising approach to weeding out weak patents. A new post-grant review procedure, however, will do nothing to encourage worthy challenges to thousands of extant weak, overasserted patents.

This article explores another litigation-stage approach to overcoming the free rider problem that undercuts patent validity challenges - namely, strong-form joint defense agreements among multiple accused infringers. Strong-form agreements, which go beyond light coordination and information sharing, have long been condemned as unlawful buyers' cartels. The seminal case remains Jones Knitting Corp. v. Morgan. But current doctrine’s condemnation trades on a category mistake rooted in a fatally simplistic view that patents are commodity property (rather than what they are, which is probabilistic exclusion rights). Contrary to conventional wisdom, a binding commitment among accused infringers jointly to fund a full challenge to patent infringement allegations is not, nor is it akin to, a buyers’ cartel for buying commodities. Rather, it is a research joint venture, the goal of which is to generate valuable - but otherwise inappropriable - information about the patent's true validity or scope.

August 26, 2010 | Permalink | Comments (0) | TrackBack (0)

Public Monopoly and Economic Efficiency: Evidence from the Pennsylvania Liquor Control Board's Entry Decisions

Posted by D. Daniel Sokol

Katja Seim (Wharton) and Joel Waldfogel (Wharton) have a paper on Public Monopoly and Economic Efficiency: Evidence from the Pennsylvania Liquor Control Board's Entry Decisions.

ABSTRACT: While private monopolists are generally assumed to maximize profits, the goals of public enterprises are less well known. Using the example of Pennsylvania's state liquor retailing monopoly, we use information on store location choices, prices, wholesale costs, and sales to uncover the goals implicit in its entry decisions. Does it seek to maximize profits or welfare? We estimate a spatial model of demand for liquor that allows us to calculate counterfactual configurations of stores that maximize profit and welfare. We find that welfare maximizing networks have roughly twice as many stores as would maximize profit. Moreover, the actual network is much more similar in size and configuration to the welfare maximizing configuration. An alternative to a state monopoly would be the common practice of regulated private entry. While such regimes can give rise to inefficient location decisions, little is known about the size of the resulting inefficiencies. Even for a given number of stores, a simple characterization of free entry with our model results in a store configuration that produces welfare losses of between 3 and 9% of revenue. This is a third to half of the overall loss from unregulated free entry.

August 26, 2010 | Permalink | Comments (0) | TrackBack (0)

Death by Market Power. Reform, Competition and Patient Outcomes in the National Health Service

Posted by D. Daniel Sokol

Martin Gaynor (Carnegie Mellon University and University of Bristol), Rodrigo Moreno-Serra (Imperial College), and Carol Propper (Imperial College, University of Bristol) have a new paper on Death by Market Power. Reform, Competition and Patient Outcomes in the National Health Service.

ABSTRACT: The effect of competition on the quality of health care remains a contested issue. Most empirical estimates rely on inference from non experimental data. In contrast, this paper exploits a pro-competitive policy reform to provide estimates of the impact of competition on hospital outcomes. The English government introduced a policy in 2006 to promote competition between hospitals. Patients were given choice of location for hospital care and provided information on the quality and timeliness of care. Prices, previously negotiated between buyer and seller, were set centrally under a DRG type system. Using this policy to implement a difference-in-differences research design we estimate the impact of the introduction of competition on not only clinical outcomes but also productivity and expenditure. Our data set is large, containing information on approximately 68,000 discharges per year per hospital from 160 hospitals. We find that the effect of competition is to save lives without raising costs. Patients discharged from hospitals located in markets where competition was more feasible were less likely to die, had shorter length of stay and were treated at the same cost.

August 26, 2010 | Permalink | Comments (0) | TrackBack (0)

The Impact of Competition on Management Quality: Evidence from Public Hospitals

Posted by D. Daniel Sokol

Nicholas Bloom, Carol Propper, Stephan Seiler, and John van Reenan (all Centre for Market and Public Organisation Bristol Institute of Public Affairs University of Bristol) explore The Impact of Competition on Management Quality: Evidence from Public Hospitals.

ABSTRACT: In this paper we examine the causal impact of competition on management quality. We analyze the hospital sector where geographic proximity is a key determinant of competition, and English public hospitals where political competition can be used to construct instrumental variables for market structure. Since almost all major English hospitals are government run, closing hospitals in areas where the governing party has a small majority is rare due to fear of electoral punishment. We find that management quality - measured using a new survey tool - is strongly correlated with financial and clinical outcomes such as survival rates from emergency heart attack admissions (AMI). More importantly, we find that higher competition (as indicated by a greater number of neighboring hospitals) is positively correlated with increased management quality, and this relationship strengthens when we instrument the number of local hospitals ! with local political competition. Adding another rival hospital increases the index of management quality by one third of a standard deviation and leads to a 10.7% reduction in heart-attack mortality rates.

August 26, 2010 | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 25, 2010

Horizontal Mergers of Online Firms: Structural Estimation and Competitive Effects

Posted by D. Daniel Sokol

Yonghong An, Michael R. Baye, Yingyao Hu, John Morgan, and Matt Shum have an interesting new paper on Horizontal Mergers of Online Firms: Structural Estimation and Competitive Effects.

ABSTRACT: This paper (1) presents a general model of online price competition, (2) shows how to structurally estimate the underlying parameters of the model when the number of competing firms is unknown or in dispute, (3) estimates these parameters based on UK data for personal digital assistants, and (4) uses these estimates to simulate the competitive effects of horizontal mergers. Our results suggest that competitive effects in this online market are more closely aligned with the simple homogeneous product Bertrand model than might be expected given the observed price dispersion and number of firms. Our estimates indicate that so long as two firms remain in the market post merger, the average transaction price is roughly unaffected by horizontal mergers. However, there are potential distributional effects; our estimates indicate that a three-to-two merger raises the average transaction price paid by price sensitive "shoppers" b! y 2.88 percent, while lowering the average transaction price paid by consumers "loyal" to a particular firm by 1.37 percent.

August 25, 2010 | Permalink | Comments (0) | TrackBack (0)

Competition Among Mass Media

Posted by D. Daniel Sokol

Maksymilian Kwiek (University of Southampton) addresses Competition Among Mass Media.

ABSTRACT: This paper investigates how mass media provide information to readers or viewers who have diverse interests. The problem of a mass medium comes from the fact that there is a constraint on how much information can be delivered. It is shown that the mass medium optimally provides information that is somewhat useful to all agents, but not perfect to anybody in particular. This benchmark model is then used to investigate competition among mass media with differentiated products. In the equilibrium of the example studied, mass media differentiate their news fully, as if they were monopolies on the subset of readers to which they tailor their news. However, prices are disciplined by competition.

August 25, 2010 | Permalink | Comments (0) | TrackBack (0)

The Supreme Court Invalidates State Restriction on Federal Class Actions in Shady Grove v. Allstate

Posted by D. Daniel Sokol

Aidan Synnott, Paul, Weiss & Daniel Crane, Univ. of Michigan explain how The Supreme Court Invalidates State Restriction on Federal Class Actions in Shady Grove v. Allstate.

ABSTRACT: The United States Supreme Court recently held that Federal Rule of Civil Procedure 23 trumps a state rule that forbids all class action relief based on a state statutory penalty. With the Court splitting along ideologically diverse lines, three separate opinions vigorously debated matters of state policy prerogative and legislative interpretation. The Justices appeared to agree, however, that the decision will surely result in increased forum shopping for class action plaintiffs under the Class Action Fairness Act, 28 U.S.C. § 1332(d) (2006) ("CAFA"). The irony, not lost on the dissent, was that CAFA was enacted to protect class action defendants from state judges overeager to certify large classes. It now acts to submit the same defendants to federal class action liability where state class action liability does not exist.

The ripples from Shady Grove likewise reach antitrust law. For instance, the same state rule at issue in Shady Grove also restricts class action relief under New York's antitrust provision, the Donnelly Act. Coupled with CAFA, Shady Grove may lead to more antitrust class actions in federal court based on state law provisions like the Donnelly Act.

August 25, 2010 | Permalink | Comments (0) | TrackBack (0)

English Court of Appeal’s Judgment in Cooper Tire and Ors v. Dow Deutschland and Ors

Posted by D. Daniel Sokol

Ruchit Patel, Cleary Gottlieb explains English Court of Appeal’s Judgment in Cooper Tire and Ors v. Dow Deutschland and Ors.

ABSTRACT: On July 23, 2010, the English Court of Appeal rejected an appeal brought by Dow Deutschland and others against a 2009 decision of the English High Court concerning the jurisdiction of English courts over damages actions following-on from a cartel infringement decision of the European Commission.

The appeal focused on whether a follow-on damages claim filed with the English High Court could be struck out at a preliminary stage on the basis that the only companies domiciled in the United Kingdom were subsidiaries or affiliates of the addressees of a Commission decision (i.e., where the English-domiciled companies were not themselves addressees of the Commission decision). The appeal also considered whether proceedings in England should be stayed until concurrent proceedings in Italy related to the same Commission decision had been concluded.

As explained in greater detail below, the CoA held that an English court should not strike out a follow-on claim at a preliminary stage (i.e., before disclosure-the English term for discovery) where it cannot exclude that the English-domiciled subsidiary on which jurisdiction is based had engaged in, or was aware of, the anticompetitive conduct that was the subject of the Commission decision. Accordingly, provided that the claim makes an "arguable" case that the English subsidiary engaged in, or was aware of, anticompetitive conduct, the case may not be dismissed summarily. The CoA's judgment creates a relatively low jurisdictional standard, implying that, if it is subsequently determined that the English-domiciled defendant(s) did not engage in anticompetitive conduct and was not aware that other companies within the group engaged in such conduct, the English courts would: (1) no longer be able to hold the English defendant(s) liable and (2) likely decline jurisdiction.

In addition, the CoA noted that the High Court was right not to impose a stay on proceedings in England despite the existence of concurrent proceedings in Italy, because the "careful balancing of competing interests carried out by the High Court did not stray outside the reasonable range of options open to it." The CoA was not persuaded that the fact that the Italian court was first seized could act as a form of trump card, describing it as "speculative and imponderable at best." The CoA also held that a judge was entitled to take into account the fact that a decision in the Italian case was not imminent.

Section II below summarizes the background to the follow-on damages actions in question, Section III outlines the proceedings before the CoA and its judgment, and Section IV considers the implications of that judgment.

August 25, 2010 | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 24, 2010

Posted Pricing as a Plus Factor

Posted by D. Daniel Sokol

Joe Harrington (Johns Hopkins - Econ) discusses Posted Pricing as a Plus Factor.

ABSTRACT: This paper identifies conditions under which an industry-wide practice of posted (or list) pricing is a plus factor sufficient to conclude that firms violated Section 1 of the Sherman Act. For certain classes of markets, it is shown that, under competition, all firms setting a list price with a policy of no discounting is contrary to equilibrium. Thus, if all firms choose posted pricing, it is to facilitate collusion by making it easier for them to coordinate their prices. It is then argued that the adoption of posted pricing communicates the necessary intent and reliance to conclude concerted action.

August 24, 2010 | Permalink | Comments (0) | TrackBack (0)

Strategic Collusion in Auctions with Externalities

Posted by D. Daniel Sokol

Omer Biran (CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - CNRS : UMR7534 - Université Paris Dauphine - Paris IX) addresses Strategic Collusion in Auctions with Externalities.

ABSTRACT: We study a first price auction preceded by a negotiation stage, during which bidders may form a bidding ring. We prove that in the absence of external effects the all-inclusive ring forms in equilibrium, allowing ring members to gain the auctioned object for a minimal price. However, identity dependent externalities may lead to the formation of small rings, as often observed in practice. Potential ring members may condition their participation on high transfer payments, as a compensation for their expected (negative) externalities if the ring forms. The others may therefore profitably exclude such "demanding" bidders, although risking tougher competition in the auction. We also analyze ring inefficiency in the presence of externalities, showing that a ring may prefer sending an inefficient member to the auction, if the efficient member exerts threatening externalities on bidders outside the ring, which in turn leads to a higher winning price.

August 24, 2010 | Permalink | Comments (0) | TrackBack (0)

The End of the Monopoly of Peer Review

Posted by D. Daniel Sokol

Is peer review going the way of the dodo?  The NY Times reports on some changes in the humanities.  See here.

HT: Javier Tapia

August 24, 2010 | Permalink | Comments (0) | TrackBack (0)

Recent Developments In Antitrust Class Actions in the United Kingdom

Posted by D. Daniel Sokol

Robert O’Donoghue, Brick Court Chambers discusses Recent Developments In Antitrust Class Actions in the United Kingdom.

ABSTRACT: Somewhat fitful attempts at promoting antitrust damages litigation have taken place in the EU in the last several years. These attempts have been stymied to a certain extent by a coalition of disparate, but cumulatively powerful, factors. For one thing, the EU Commission (and also, to an extent, certain national competition authorities) has sought to strike a delicate balance between competing considerations. A paramount consideration has been the jealous guarding of the Commission's leniency/amnesty policy in cartels-a policy that has been the major source of the very large majority of Commission cartel cases in the last 15 years. Fostering a private antitrust damages litigation culture is seen by some within the Commission as potentially undermining its leniency policy; in particular, if private litigation were to lead to a risk of discovery of corporate leniency statements by plaintiffs. Allied to this is a real fear on the part of many national legal systems of importing the perceived excesses of U.S. style class action lawsuits, coupled with (a somewhat surprising) resistance in many countries to EU harmonization of national civil procedure laws (perhaps reflecting the fact that the EU law has, with very, very limited exceptions, not sought to harmonize national legal procedural laws).

On the other hand, there is also recognition that administrative fines by the Commission do not, directly anyway, benefit EU consumers, and that the political legitimacy of EU competition law could be significantly increased by consumer recovery of damages in civil litigation. At least some within the Commission also appear to accept that civil damages actions could be an important complement to public enforcement, particularly if the non-disclosure of corporate leniency statements could be guaranteed. The EU Courts, too, have recognized that there is a substantive individual right, under EU law, to compensation for damages caused by a breach of EU competition law (rather than merely a right that claims for damages under EU competition law should be effective and treated no differently, in procedural terms, to claims under national law).

For plaintiffs' lawyers, at least, key to the success of an effective private damages action system is the need to cater for collective forms of redress. Because in many cases harm caused by, say, a cartel is atomized among a large group of purchasers and sub-purchasers whose individual losses may not be huge, the incentives of any individual plaintiff to sue (usually large and well-resourced) defendants is sometimes limited. The same may be true of small- and medium-sized enterprises affected by anticompetitive behavior.

As things currently stand, however, EU Commission reforms in this area appear to envisage a very limited form of collective action redress. In the draft of the EU Directive intended to legislate for a minimum level of common procedures for private damages actions, the Commission only provided for: (1) an opt-in collective redress procedure whereby two or more named plaintiffs could, in general, be joined in the same action, and (2) a representative action procedure, whereby certain nominated or "qualified" State bodies or not-for-profit entities would be able to pursue collective actions. While, in (2), the action could be brought on behalf of a group that did not involve individual named plaintiffs (i.e., something more akin to an opt-out action), the reservation of such actions to essentially public bodies would seriously limit its practical effectiveness. Moreover, the fate of the draft Directive remains unclear following its withdrawal and the change in EU Competition Commissioner in February 2010.

Given the somewhat schizophrenic, and uncertain, approach of the EU authorities to private damages actions in the competition arena, it will likely, in the short- to medium-term anyway, be left to national legal systems in the EU to decide to what extent, if any, they wish to promote collective redress procedures in competition law cases. The United Kingdom has long been regarded as being at the vanguard of EU jurisdictions likely to be attractive, to plaintiffs at any rate, for private damages actions. Reasons for the U.K.'s attractiveness include the availability of full disclosure of documents as of right (unlike most civil law systems where specific (or, even, no) disclosure is the norm), the use of English as the lingua franca of competition law, and the generally high quality, probity, and speed of justice in the United Kingdom. Perhaps recognizing these attractions one of the leading U.S. class action law firms, Hausfeld LLP, established an office in London for the express purpose of bringing class action law suits.

This short article examines recent developments in multi-party litigation, including competition litigation, in the United Kingdom. 

August 24, 2010 | Permalink | Comments (0) | TrackBack (0)

Dukes v Wal-Mart Stores: En Banc Ninth Circuit Lowers the Bar for Class Certification and Creates Circuit Splits in Approving Largest Class Action Ever Certified

Posted by D. Daniel Sokol

Donald Falk, Archis Parasharami, & Marcia Goodman (Mayer Brown) explore Dukes v Wal-Mart Stores: En Banc Ninth Circuit Lowers the Bar for Class Certification and Creates Circuit Splits in Approving Largest Class Action Ever Certified.

ABSTRACT: The U.S. Court of Appeals for the Ninth Circuit has issued a significant decision affirming the certification of the largest class action since the adoption of Federal Rule of Civil Procedure 23. In Dukes v. Wal-Mart Stores, Inc., a divided en banc court ruled, 6 to 5, that the district court did not abuse its discretion in certifying a class of as many as 1.5 million female employees who worked in Wal-Mart's 3,400 stores at any time after December 1998 for gender discrimination claims based on pay. The effect of the Ninth Circuit's decision will reach far beyond the employment context and is likely to ease the path to certify class actions under antitrust and California unfair competition theories as well.

The Ninth Circuit's decision creates or deepens conflicts with other circuits on at least three key class certification issues:

1. Whether the district court must resolve Daubert objections to the admissibility of experts used in support of class certification before ruling on the class certification motion;

2. Whether the use of "sample cases" is consistent with the defendant's right to present affirmative defenses against each class member's claims at trial; and

3. Under what circumstances claims for injunctive relief predominate over claims for monetary relief so as to permit class certification under Rule 23(b)(2), which excuses plaintiffs from satisfying the "predominance" and "superiority" requirements imposed by Rule 23(b)(3) on class actions for damages.

Dukes is likely to affect certification of antitrust class actions (and thus, the incentives to settle cases of questionable merit). As one court has put it, because of the enormous stakes involved in class actions, the "basic truth about class action litigation" is that "the fight over class certification is often the whole ball game." Because Dukes lowers the bar to class certification in the Ninth Circuit, businesses that may be targeted by antitrust class actions should be prepared to face more litigation there, and should be sure to preserve important issues for potential Supreme Court review.

August 24, 2010 | Permalink | Comments (0) | TrackBack (0)

Monday, August 23, 2010

Competition, product and process innovation: an empirical analysis

Posted by D. Daniel Sokol

Carlos D. Santos (Dpto. Fundamentos del Análisis Económico) explains Competition, product and process innovation: an empirical analysis.

ABSTRACT: Competition has long been regarded as productivity enhancing. Understanding the mechanism by which competition affects innovation and productivity is therefore an important topic for economic policy. The main contribution of this paper is to disentangle the relationship between competition and two sides of innovation: product and process. I write down a model and discuss the conditions under which we can identify the causal mechanism. Overall I find that competition, measured by the number of competitors or market shares, has negative effects on product innovation and no effects on process innovation. The explanation is very simple. By shifting demand, competition directly changes the optimality condition for product but not for process innovation. Thus, competition has no direct effects on process innovations or, as a consequence, productivity.

August 23, 2010 | Permalink | Comments (0) | TrackBack (0)

Nondiscriminatory Pricing: Is Standard Setting Different?

Posted by D. Daniel Sokol

Anne Layne-Farrar (LECG) asks Nondiscriminatory Pricing: Is Standard Setting Different?

ABSTRACT: The debate surrounding a RAND licensing promise (for reasonable and nondiscriminatory licensing) made within standard setting has focused on what the "R" means; far less attention has been given to what is implied by the "ND." The goal of this paper is to offer courts and competition agencies guidance on evaluating when differing intellectual property (IP) licensing within standard setting rises to the level of anticompetitive behavior. The paper reviews the economics literature on price discrimination in traditional markets for goods and services and on licensing IP outside of standard setting to identify lessons that can be applied to licensing within standards. There are a number of important teachings relevant for competition policy. Price discrimination is not necessarily harmful, and can even increase consumer welfare. Most IP licensing is characterized by "discrimination" in that rates and terms differ across licensees, making the task of disentangling anticompetitive practices difficult. Proof of market power must remain the first step in any inquiry on allegations of anticompetitive IP licensing. Moreover, as of yet, no widely applicable benchmarks or rules for distinguishing harmful from beneficial or nonharmful licensing discrimination have emerged, meaning that a careful, quantitative effects-based analysis remains the best approach.

August 23, 2010 | Permalink | Comments (0) | TrackBack (0)

Online Advertising: Defining Relevant Markets

Posted by D. Daniel Sokol

James D. Ratliff (Compass Lexecon) and Daniel L. Rubinfeld (Berkeley Law) discuss Online Advertising: Defining Relevant Markets.

ABSTRACT: This paper provides an overview of the development of Internet advertising. We offer a broad overview of both online and offline advertising and the economic models that allow one to evaluate competition among advertisers. We focus on the extent to which various types of online advertising compete with one another and with offline advertising. We also ask whether various types of online ads are competitive with each other.

August 23, 2010 | Permalink | Comments (1) | TrackBack (0)

Department of Justice and USDA Announce Agenda for August 27 Livestock Workshop in Colorado

Posted by D. Daniel Sokol

Department of Justice and USDA Announce Agenda for August 27 Livestock Workshop in Colorado

8:30 a.m - 8:45 a.m. MDT Opening Remarks

Eric Holder, Attorney General, U.S. Department of Justice
Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture

8:45 a.m. - 9:45 a.m. MDT Keynote Roundtable Discussion

Eric Holder, Attorney General, U.S. Department of Justice
Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture
Christine Varney, Assistant Attorney General, Antitrust Division, U.S. Department of Justice
Betsy Markey, Congresswoman, U.S. House of Representatives
Bill Ritter Jr., Governor, state of Colorado
John Suthers, Attorney General, state of Colorado
Steve Bullock, Attorney General, state of Montana
John Stulp, Commissioner of Agriculture, state of Colorado

9:45 a.m. - 10:15 a.m. MDT Coffee Break

10:15 a.m. - 11:45 a.m. MDT Producer/Feeder Presentation of Issues

This panel will be an opportunity to hear first-hand from producers or feeders as they share their experiences and perspectives on the industry.

Moderators: Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture
Christine Varney, Assistant Attorney General, Antitrust Division, U.S. Department of Justice

Mike Harper, sheep producer, Eaton, Colo.
Dr. Taylor Haynes, rancher, Cheyenne, Wyo.
Robbie LeValley, rancher, Hotchkiss, Colo.
Harry Livermont, rancher, Interior, S.D.
Chris Petersen, hog farmer, Clear Lake, Iowa
Allen Sents, feedlot owner, Marquette, Kan.
Alden Zuhlke, rancher, Brunswick, Neb.

11:45 a.m. - 12:30 p.m. MDT Lunch

12:30 p.m. - 1:30 p.m. MDT Public Testimony

1:30 p.m. - 2:45 p.m. MDT Panel I - Trends in the Livestock Industry

This panel will discuss trends in the livestock industry, including issues associated with contracting, price transparency and the effects of concentration.

Moderator: Philip Weiser, Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice

Jerry Bohn, general manager, Pratt Feeders, Pratt, Kan.
Libby Cook, co-founder, Wild Oats Markets and Sunflower Farmers Markets
Mark Greenwood, vice president, commercial lending, AgStar Financial Services
Bill Heffernan, professor emeritus of rural sociology, University of Missouri
Mark Lauritsen, international vice president, director food processing, packing and manufacturing division, United Food and Commercial Workers International Union
Gilles Stockton, rancher, Range, Mont.
Armando Valdez, rancher, La Jara, Colo.
Clem Ward, professor and extension economist, Oklahoma State University

2:45 p.m. - 4:00 p.m. MDT Panel II - Market Structure

This panel will include a variety of market participants who will discuss market structure issues in the livestock industry.

Moderator: James MacDonald, Chief, Agricultural Structure and Productivity Branch, Economic Research Service, U.S. Department of Agriculture

Bruce Cobb, general manager, Consolidated Beef Producers
David Domina, attorney, Domina Law Group
Mark Dopp, attorney, American Meat Institute
James Herring, president and chief executive officer, Friona Industries
Robert Mack, cattle producer/feeder, Watertown, S.D.
Bob Miller, rancher, Okmulgee, Okla.
William Rishel, Richel Angus, Platt, Neb.
Charlie Rogers, owner/general manager, Clovis Livestock Auction

4:00 p.m. - 4:15 p.m. MDT Break

4:15 p.m. - 6:30 p.m. MDT Public Testimony

6:30 p.m. MDT Concluding Remarks

Additional information, including submitted public comments and transcripts for past workshops can be found at the Antitrust Division's agriculture workshop website at www.justice.gov/atr/public/workshops/ag2010/index.htm. While no streaming webcast will be available, transcripts and video will be available for this workshop at a later date on the Antitrust Division's website. Individuals seeking more information on the workshops should contact agriculturalworkshops@usdoj.gov.

August 23, 2010 | Permalink | Comments (0) | TrackBack (0)

Pitfalls in vertical arrangements

Posted by D. Daniel Sokol

Gianpaolo Rossini and Cecilia Verga (both Bologna - Economics) describe Pitfalls in vertical arrangements.

ABSTRACT: A popular way of obtaining essential inputs requires the establishment of an input production joint venture (IPJV) in the upstream (U) section of the vertical chain of production by firms competing and selling final goods in the downstream (D) section of the vertical chain. In spite of the apparently simple arrangement there are many possible governances for the management of the IPJV according to the ownership structure and to the degree of delegation granted to the IPJV by parent firms. We explore the best sustainable governance arrangement for the IPJV. We address this question in a duopoly framwork and we find a large area of impossible vertical arrangements associated with technological asymmtery. The most likely governance of the vertical arrangment associated to the IPJV is total independence.

August 23, 2010 | Permalink | Comments (0) | TrackBack (0)