Antitrust & Competition Policy Blog

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

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Monday, January 25, 2010

It is Not too late to register for the NYU/AALS/ABA Antitrust conference this Friday

Posted by D. Daniel Sokol

I have read a number of the papers already. The Next Generation of Antitrust Scholarship Conference will be a very worthwhile conference to attend.  You can still register for free (and with free lunch and CLE credits no less!) here.

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

The Organization of Professional Sports Leagues: A Comparison of European and North-American Leagues from the Perspective of Platform Organization

Posted by D. Daniel Sokol

Helmut Dietl (Institute for Strategy and Business Economics, University of Zurich) and Tobias Duschl (Institute for Strategy and Business Economics, University of Zurich) ponder The Organization of Professional Sports Leagues: A Comparison of European and North-American Leagues from the Perspective of Platform Organization.

ABSTRACT: In this paper, we compare European and North-American sports leagues from the perspective of platform organization. We find that European leagues can be characterized as open, not only in the sense of promotion and relegation, but also in the sense of attenuated/dispersed property rights and free access on all market sides. North American leagues, on the other hand, are organized as closed platforms with exclusive/concentrated property rights and high entry barriers on all market sides. This difference explains why European clubs outperform their North American counterparts in terms of revenue generation, i.e. value creation, and why North American clubs are much more profitable than most European clubs. European leagues are organized as open platforms, which invite and facilitate participation from all relevant market sides. The absence of concentrated property rights and the possibility of free market entry, however, limit the opportunities of value appropriation.

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

A dynamic analysis of consolidation in the broadcast television industry

Posted by D. Daniel Sokol

Jessica C. Stahl (Federal Reserve) addresses A dynamic analysis of consolidation in the broadcast television industry.

ABSTRACT: This paper estimates a dynamic oligopoly model in order to separately identify the demand-side and cost-side advantages of consolidation in the broadcast television industry. I exploit an exogenous change in regulation that led to significant industry consolidation. Using revenue and ownership data for broadcast stations over the past ten years, I estimate the effect of ownership changes on revenue. I recover costs by examining patterns in ownership changes that are left unexplained by revenue estimation. I model firms' purchasing decisions as a dynamic game, and estimate the game using a two-step estimation method recently developed by Bajari, Benkard & Levin (2007). This is the first paper to estimate a model of merger activity in a dynamic, strategic setting. I find that there are both revenue and cost advantages to consolidation, but they operate through different mechanisms. Access to a wider audience enables firms to increase per-station advertising revenue, while simply owning more stations enables firms to reduce per-station operating costs. A firm's ability to realize these benefits is affected by its stations' network affiliations, locations and viewers.

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

Multisided Media Markets: Applying the Theory of Multisided Markets to Media Markets

Posted by D. Daniel Sokol

Nadine Lindstädt (Department of Environmental and Business Economics, University of Southern Denmark) undertakes Multisided Media Markets: Applying the Theory of Multisided Markets to Media Markets.

ABSTRACT: Media markets recently have been identified as multisided markets. The application of the theory of multisided markets provides a better understanding of such markets. It enriched the hitherto economic approach and led to new insights and perspectives especially for the antitrust authorities when evaluating competition constraints and mergers. This paper reviews the theory of multisided markets and subsequently applies it to media markets. Finally the paper draws attention to the new perspectives and insights the theory provides but also brings open research questions to light.

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

The Interaction between Antitrust and Intellectual Property: the Interoperability Issue in the Microsoft Europe Case

Posted by D. Daniel Sokol

Alessandro Diego Scopelliti (Department of Economics, University of Warwick) explains The Interaction between Antitrust and Intellectual Property: the Interoperability Issue in the Microsoft Europe Case.

ABSTRACT: The present work analyzes the interaction between antitrust policy and intellectual property protection, with particular reference to the cases of refusal to supply, when it concerns ideas or inventions protected by an IP right. For this purpose, the paper preliminarily discusses the governing principles of antitrust policy on abuse of dominance and refusal to deal, as they have been implemented in the decisions of the EU Competition Authority, and it presents the specific issues related to the implementation of antitrust policy in the innovative industries. Then, the paper examines in particular the Microsoft Europe Case, as decided by the European Commission in 2004, focusing on the issue of the interoperability between the operating systems for personal computers and the operating systems for work group servers. The theoretical model, developed as an extension of the framework proposed by Choi and Stefanadis (2001) to! the case of refusal to deal, suggests an explanation of the case, alternative to the one adopted by the Commission, if not necessarily in the final outcome of the decision, at least in the analytical arguments and in the dynamics of the market structure. In particular, we show that the refusal to supply the compatibility between the two complementary products was determined not only by the intention to leverage its dominant position to the adjacent market of server operating systems, but especially by the concern for keeping the monopoly on its core market, that is the one of PC operating system, given the future evolution of the software market, due to the diffusion of cloud computing.

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

Sunday, January 24, 2010

For Readers of the Blog - Make Some Connections

Posted by D. Daniel Sokol

I have created a networking site for readers of the blog on linkedin, which from what I can tell is Facebook but for professionals.  You can access it here.

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