Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Monday, March 1, 2010

Bertrand competition with non-rigid capacity constraints

Posted by D. Daniel Sokol

Prabal Roy Chowdhury (Indian Statistical Institute, New Delhi) offers his thoughts on Bertrand competition with non-rigid capacity constraints.

ABSTRACT: We examine a model of Bertrand competition with non-rigid capacity constraints, so that by incurring an additional per unit cost of capacity expansion, firms can produce beyond capacity. We find that there is an interval of prices such that a price can be sustained as a pure strategy Nash equilibrium if and only if it lies in this interval. We then examine the properties of this set as [a] the number of firms becomes large and [b] the capacity cost increases.

March 1, 2010 | Permalink | Comments (0) | TrackBack (0)

Looking for a Great Competition Law Job in London: Competition Commission Looking for Chief Legal Adviser

Posted by D. Daniel Sokol

Job description and salary

Closing date

Chief Legal Adviser

Circa £100,000

We are looking for someone with an excellent track record as a barrister or solicitor with wide experience of a number of areas of law, litigation and the UK legislative process. You will provide strong leadership to the legal team, and contribute more widely to the leadership of the CC as part of the Senior Management Team. Your strong communication skills will also enable you to act as an effective ambassador for the CC and to build strong relationships with our key stakeholders. The quality of our legal advice is fundamental to our credibility as a world class competition authority, so this is a pivotal role in our organisation. You will report directly to the Chief Executive and work closely with the Chairman and CC’s Council to ensure the provision of sound and robust legal advice.



The deadline for applications is Noon, 19 March 2010. To find out more about this role and how to apply, please visit www.veredus.co.uk quoting reference 10492. Alternatively for an informal and confidential discussion please call Katie Yeo on 020 7932 4237 or Shelagh Szulc on 07795 827 384.



March 1, 2010 | Permalink | Comments (1) | TrackBack (0)

Brands, Competition and the Law

Posted by D. Daniel Sokol

Deven R. Desai, Thomas Jefferson School of Law and Spencer Weber Waller, Loyola University Chicago School of Law explain Brands, Competition and the Law.

Brands matter. In modern times, brands and brand management have become a central feature of the modern economy and a staple of business theory and business practice. Coca-Cola, Nike, Google, Disney, Apple, Microsoft, BMW, Marlboro, IBM, Kellogg’s, Louis-Vuitton, and Virgin are all large companies, but they are also brands that present powerful, valuable tools for business. Business is fully aware of that power and value. Contrary to the law’s conception of trademarks, brands are used to indicate far more than source and/or quality. Indeed those functions are far down on the list of what most businesses want for their brands. Brands allow businesses to reach consumers directly with messages regarding emotion, identity, and self-worth such that consumers are no longer buying a product but buying a brand. Businesses pursue that strategy to move beyond price, product, place, and position and create the idea that a consumer should buy a branded good or service at a higher price than the consumer might otherwise pay. Branding explicitly contemplates reducing or eliminating price competition as the brand personality cannot be duplicated. In addition, this practice can be understood as a product differentiation tactic which allows a branded good to turn a commodity into a special category that sees higher margins compared to the others in that market space. In other words, brands have important effects on competition and the marketplace.

Given that both trademark law and antitrust law address business competition, one might expect them to address brands as they fit into each doctrine’s areas of concern and that together trademark and antitrust law would offer a coherent legal regime to manage the way in which brands affect competition. That, however, is not the case. This article begins the process of broadening the legal understanding of brands by explaining what brands are and how they function, how trademark and antitrust law have misunderstood brands, and the implications of continuing to ignore the role brands play in business competition. We conclude that branding is so central to the business world, the modern economy, and the law that legal discourse must understand the brand or it will continue to reach incoherent results as it tries to navigate the realities of business competition in the 21st century.

March 1, 2010 | Permalink | Comments (0) | TrackBack (0)

Competition, Innovation and Maintaining Diversity Through Competition Law

Posted by D. Daniel Sokol

Wolfgang Kerber, Philipps University Marburg - Department of Business Administration and Economics has an interesting piece on Competition, Innovation and Maintaining Diversity Through Competition Law.

ABSTRACT: The analysis of the advantages of competition as a process of parallel experimentation is a neglected dimension of competition. Innovation competition as a trial and error-process can be analyzed as an evolutionary process of variation and selection of new problem solutions, which allows to apply arguments and models of evolutionary innovation economics. Both through the analysis of the general benefits of diversity as well as from the analysis of the advantages of parallel research, it can be shown that a larger number and diversity of independently experimenting competitors can have a positive effect on innovation. Since there might be also advantages of a larger firm size, a trade off might occur leading to the notion of an optimal number of parallel experimenting firms. From this perspective, mergers and R&D agreements, which might reduce the number and diversity of parallel experiments, might have a negative impact on the effectiveness of competition as a knowledgegenerating process of parallel experimentation. Therefore the question arises whether competition law should also protect this dimension of competition. The Innovation Market Analysis in US antitrust policy already developed interesting criteria and policy conclusions for maintaining competition between parallel research projects and protecting diversity - but without an appropriate theoretical reasoning about the benefits of protecting parallel research.

March 1, 2010 | Permalink | Comments (1) | TrackBack (0)

Sunday, February 28, 2010

Earthquake in Chile

Posted by D. Daniel Sokol

As many of you know, I spent this past summer teaching antitrust at the Catholic University of Chile.  My family and I read about the disaster yesterday with particular concern for our many friends there.  I have been in touch with a number of our friends in Chile at the FNE, TDLC, various universities and law firms.  They all suggest that the worst is behind them and that the important effort now is in rebuilding the country and its infrastructure.  To help with those less fortunate who have suffered, I suggest a donation to the Red Cross International Response Fund. 

 If you wish to designate your donation to Chilean relief please do so at the time of your donation by either contacting 1-800-HELP NOW or 1-800-257-7575 (Spanish), or mailing your donation with the designation to the American Red Cross, P.O. Box 37243, Washington, D.C. 20013 or to your local American Red Cross chapter. Internet users can make a secure online contribution by visiting www.redcross.org.

February 28, 2010 | Permalink | Comments (0) | TrackBack (0)