Antitrust & Competition Policy Blog

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

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Saturday, April 9, 2011

2nd CUTS-CIRC International Conference - REVIEWING THE GLOBAL EXPERIENCE ON ECONOMIC REGULATION

Posted by D. Daniel Sokol

2nd CUTS-CIRC
International Conference
REVIEWING THE GLOBAL EXPERIENCE ON ECONOMIC REGULATION
– A forward
looking perspective

 

April, 18-20,
2011
Venue: Hotel
Le Meridien, Windsor Place, Janpath, New Delhi 110001,
India

 

 

CUTS International alongwith CUTS Institute for Regulation and Competition is organising the 2nd International Conference, ‘Reviewing the global experience on economic regulation – a forward looking perspective’ in New Delhi from April, 18-20, 2011.

 

The term ‘regulation’ is associated with such broad usage that its relevance is seen in almost all walks of life. It has, therefore, been classified into various types, one major class being ‘economic regulation’ or regulation that directly affects the number of firms operating in markets, the quantity transacted in each market and shares of participating firms in the transacted amount, and finally, the prices at which these transactions are carried out. While there is a fair bit of consensus on the definition of ‘economic regulation’ there is wide disagreement and confusion about the rationale for such regulation.

This conference would be a humble attempt to forge some agreement on the mentioned issue by putting on
display different approaches for rationalising and evaluating regulation as well as defining stakeholder participation in such regulation; and then inviting discussion and debate among students, experts and practitioners with varying perspectives from different parts of the world.

 

Please find the Agenda of the conference at:
http://www.cuts-ccier.org/pdf/Agenda-CONF_Reviewing_Global_Experience_Economic_Regulation.pdf

April 9, 2011 | Permalink | Comments (0) | TrackBack (0)

Ghosh on Google/ITA

Posted by D. Daniel Sokol

See Shubha's comments on Marketplace regarding the Google/ITA merger.

April 9, 2011 | Permalink | Comments (0) | TrackBack (0)

Friday, April 8, 2011

Antitrust Law Amidst Financial Crisis

Posted by D. Daniel Sokol

Ioannis Kokkoris (University of Redding Law) & Rodrigo Olivares-Caminal (SOAS) have published Antitrust Law Amidst Financial Crisis.

BOOK ABSTRACT: The ultimate goal of competition law is to promote competition and, in most jurisdictions, to enhance consumer welfare. Competition policy may be set aside due to special and exceptional circumstances, such as a financial crisis that threatens the stability of an economy. It is therefore important to have a clear understanding of competition law and the exceptions to it. The key issue that this book addresses is whether a financial crisis can justify the adoption of a more lenient approach to established legal standards as a result of the risks of the systemic crisis to the entire market. It provides an analysis of exceptions to competition law and policy, particularly in the context of a financial crisis, explores the rationale of competition law in the light of conflicting interests, and serves as a valuable practical guide for policy makers as well as practitioners in the field.

April 8, 2011 | Permalink | Comments (0) | TrackBack (0)

A Neo-Chicago Approach to Concerted Action

Posted by D. Daniel Sokol

William Page (University of Florida - Law) has posted A Neo-Chicago Approach to Concerted Action.

ABSTRACT: In this article, I offer an approach to concerted action that builds on traditional Chicago School analyses of the issue, but adds a focus on the role of communication. Chicago scholars uniformly identify cartels as the primary target of antitrust enforcement. They have also established much of the framework within which courts and economists analyze concerted action. George Stigler’s seminal theory of oligopoly, which sought to identify the determinants of effective collusion, has spawned an enormous literature in game theory that models the pricing behavior of oligopolists. Richard Posner’s early analysis of tacit collusion - rivals’ coordination of noncompetitive pricing without express communication - extended Stigler’s analysis to the domain of law and policy. His approach to oligopoly pricing drew on economic theory and evidence both to define tacit collusion as concerted action and to identify structural and behavioral characteristics of markets that suggested its presence.

I argue that Posner’s approach, refocused on the role of communication, provides the most promising way forward in the analysis of concerted action. After recounting the history of the Chicago School’s analysis of concerted action, I propose a modified definition of concerted action and suggest how the change might affect the search for instances of concerted action. I argue that Section 1 does not reach tacit collusion, but neither does it require a verbal agreement; instead, actions are concerted if rivals coordinate them in part by communicating their intentions. I argue that this focus on communicative concerted action, despite its departure from Posner’s legal position, is consistent with the Chicago tradition, particularly error cost analysis. Its neo-Chicago character lies in its reliance on the most recent economic literature on the role of communication in collusion. In the last part of the article, I examine a small but important subset of that literature: studies of how real-world cartels use communication and facilitating practices to achieve their aims. Based on these studies, I suggest how plaintiffs and enforcement agencies might discover concerted action by examining changing patterns in the use of facilitating practices.

April 8, 2011 | Permalink | Comments (0) | TrackBack (0)

Price discrimination and competition in two-sided markets: Evidence from the Spanish local TV industry

Posted by D. Daniel Sokol

Richard Gil (IESE Business School) and Daniel Riera-Crichton (Bates College) address Price discrimination and competition in two-sided markets: Evidence from the Spanish local TV industry.

ABSTRACT: In this paper, we empirically test the relation between price discrimination and product market competition in a two-sided market setting using a new data set of Spanish local TV stations that provides information on subscription and advertising prices per station for 1996, 1999 and 2002. During these years, changes in regulation in this sector had a deep impact on the degree of local market competition. We use differences in market structure across markets and across years to study the relation between competition and price discrimination in this setting. Our findings suggest that stations in more competitive markets are less likely to use price discrimination. We also find evidence that stations price discriminating in a market are also more likely to price discriminate on the other market. Finally, cable subscription fees and advertising prices are higher in more competitive markets which suggests that tougher competi! tion may increase market segmentation through station differentiation, driving stations to charge higher uniform prices to more loyal customers. This may indicate that less price discrimination may be associated with lower consumer surplus in all markets.

April 8, 2011 | Permalink | Comments (0) | TrackBack (0)

Thursday, April 7, 2011

Does intellectual monopoly stimulate or stifle innovation?

Posted by D. Daniel Sokol

Angus C. Chu, Shanghai University of Finance and Economics, Guido Cozzi, Durham Business School, Durham University and Silvia Galli, Hull University Business School, University of Hull ask Does intellectual monopoly stimulate or stifle innovation?

ABSTRACT: This study develops an R&D-based growth model that features both vertical and horizontal innovation to shed some light on the current debate on whether patent protection stimulates or stifles innovation. Specifically, we analyze the growth and welfare effects of patent protection in the form of profit division between sequential innovators along the quality ladder. We show that patent protection has asymmetric effects on vertical innovation (i.e., quality improvement) and horizontal innovation (i.e., variety expansion). Maximizing the incentives for vertical (horizontal) innovation requires a profit-division rule that assigns the entire flow profit to the entrant (incumbent) of a quality ladder. In light of this finding, we argue that in order to properly analyze the growth and welfare implications of patent protection, it is important to disentangle its different effects on vertical and horizontal innovation.

April 7, 2011 | Permalink | Comments (0) | TrackBack (0)

Product innovation when consumers have switching costs

Posted by D. Daniel Sokol

Evens Salies (Observatoire Frarcais des Conjonctures Economiques, Sciences Po) describes Product innovation when consumers have switching costs.

ABSTRACT: Economists have long recognized that in free markets, incentives to innovate will be diluted unless some factors grant innovators with a temporary monopoly. Patenting is the most cited factor in the economic literature. This survey concentrates on another factor that confers innovators with first-mover advantage over their competitors, namely consumer switching costs, whereby a consumer makes an investment specific to her current seller, that must be duplicated for any new seller. In this survey, we list several components of switching costs that are relevant as regards to firm innovation behaviour. The aim of this classification is twofold. First, consumer switching cost theory has matured to the point that some classification of switching costs for both understanding innovative firm behaviour and building policy-oriented models is necessary. Second, the classification included in this paper addresses the confusion that! has been existing so far regarding the distinction between ‘good’ or ‘bad’ switching costs, perceived or paid switching costs, and between switching and search costs. This paper then surveys the existing literature on the effect of switching costs on product innovation by firms and the way they compete for consumers. We also raise several important regulation and competition policy questions, using examples from the real world.

April 7, 2011 | Permalink | Comments (0) | TrackBack (0)

Competition Law and Transnational Private Regulatory Regimes: Marking the Cartel Boundary

Posted by D. Daniel Sokol

Imelda Maher, University College Dublin (UCD) - School of Law has published Competition Law and Transnational Private Regulatory Regimes: Marking the Cartel Boundary.

ABSTRACT:Cartels today are prohibited under competition regimes around the world, although seen historically (in Europe at least) as a public good to be tolerated or even encouraged by governments. Despite the prohibition, illegal cartels are still prevalent, and there are circumstances where cartel-like conduct is allowed under competition rules. This article explores the extent to which such conduct can be both subject to one regulatory regime (competition law) while also carrying out regulatory functions, and hence can be construed as transnational private regulatory regimes (TPRERs). There are three categories of cartel-like arrangements: private contractual arrangements that fall outside the realm of competition law; self-regulatory arrangements designed to exclusively advance the interests of regulatees; and hybrid regimes where private arrangements have been co-opted as a form of regulation which operate in the shadow of competition law and are often seen as advancing competition objectives.

April 7, 2011 | Permalink | Comments (0) | TrackBack (0)

THE LAW AND ECONOMICS OF SEARCH ENGINES AND ONLINE ADVERTISING

Posted by D. Daniel Sokol



THE LAW AND ECONOMICS OF SEARCH ENGINES AND ONLINE ADVERTISING

GEORGE MASON LAW & ECONOMICS CENTER

Thursday, June 16, 2011
George Mason University School of Law
Arlington, VA


The Henry G. Manne Program in Law & Economics and Google present a conference on The Law and Economics of Search Engines and Online Advertising to be held at George Mason University School of Law, Thursday, June 16th, 2011. The conference will run from 8:30 A.M. to 5:00 P.M.


OVERVIEW:

This conference is organized by Henry N. Butler, Executive Director of the Law & Economics Center and George Mason Foundation Professor of Law at George Mason University School of Law, and Joshua D. Wright, Associate Professor of Law at George Mason University School of Law.

Search and online advertising are important parts of the economy. They are also young industries. As such, understanding both the way in which search and online advertising operate as well as how these markets may evolve is fundamental to any economic and policy discussion. A deep understanding of the technology and economics of search, network effects, the antitrust economics of market definition, and the relationship between search and online advertising are required to facilitate sensible policies in this area. This conference seeks to address these issues by inviting experts in the field to present their views and engage with each other about the economic realities of search and online advertising.


REGISTRATION:

Attendance for this conference is by invitation only. To receive an invitation, please send a message with your name, affiliation, and full contact information to:

CONTACT: Jeff Smith
Email: jsmithQ@gmu.edu

AGENDA:

Thursday, June 16, 2011:

7:30 - 8:20 A.M.: Registration and Breakfast

8:30 - 10:00 A.M.: Panel 1: What Role Do Network Effects Play In the Search Market?

Network effects often play an important role in analyzing competition in high-tech markets. Network effects present opportunities for enhanced consumer welfare, but also can create the potential for competitive harms. Potential network effects must be examined in a market and technology specific-context in order to understand their likely effects. This panel takes up this question by re-examining what network externalities and network effects are and analyzing whether they are present in search and related technologies.

Panelists:

- Michael L. Katz, Sarin Chair in Strategy and Leadership, University of California, Berkeley
- Geoffrey A. Manne, Executive Director, International Center for Law & Economics
- Stanley J. Liebowitz, Ashbel Smith Professor of Economics, University of Texas at Dallas
- William H. Page, Marshall M. Criser Eminent Scholar, University of Florida Levin College of Law (moderator)

10:30 A.M. - 12:00 P.M.: Panel 2: Competition and Online
Advertising

Defining online markets is a complex and difficult task. Are advertising markets the same across web properties? What is the relationship between online and offline
properties or text ads and display ads? Is the ad market for search services and content services different? This panel explores competition and online advertising.

Panelists:

- David S. Evans, Founder, Market Platform Dynamics
- Daniel L. Rubinfeld, Robert L. Bridges Professor of Law
and Professor of Economics, University of California, Berkeley
- Catherine Tucker, Douglas Drane Career Development
Professor in IT and Management and Assistant Professor of Marketing, MIT Sloan School of Management
- Michael R. Baye, Bert Elwart Professor of Business and Professor of Business Economics & Public Policy, Indiana University Kelley School of Business (moderator)

12:00 - 1:30 P.M.: Lunch and Keynote (Speaker TBD)

1:30 - 3:30 P.M.: Panel 3: Competition and Search Markets

Much of the policy discussion on competition and search has centered on firms who participate in the search market in the traditional sense, such as Bing, Yahoo!, Blekko, Google, and others. However, the Internet provides many other ways for users to engage with and take advantage of its benefits. Vertical search markets such as Amazon or travel sites present examples of competition in search. Social media platforms (e.g., Facebook and Twitter) and the rise of mobile apps also present a competitive challenge for search. Furthermore, news sites, direct navigation, and
offline information relate to our understanding of the proper market definition in search. This panel examines how platforms compete against search and the implications of that competition.

Panelists:

- Benjamin G. Edelman, Assistant Professor of Business Administration, Harvard Business School
- Randal C. Picker, Leffman Professor of Commercial Law, University of Chicago Law School
- Paul Liu, Senior Economist, Google, Inc.
- Thomas M. Lenard, President and Senior Fellow, Technology Policy Institute (moderator)

3:30 - 5:00 P.M.: Panel 4: The Potential Costs and
Benefits of Search Regulation

Some commentators have raised the question of whether search providers are sufficiently "neutral" in presenting results, which begs the question of whether concepts such as "objectivity" and "neutrality" are desirable or even achievable in the search industry. This panel will examine these questions and explore what impact regulatory efforts to impose "neutrality" principles might have on consumer welfare and on the innovation being driven by companies like Google, Bing, and Facebook.

Panelists:

- Eric Goldman, Associate Professor of Law and Director of the High Tech Law Institute, Santa Clara University School of Law
- David Balto, Senior Fellow, Center for American Progress
- Frank Pasquale, Schering-Plough Professor in Health Care Regulation and Enforcement, Seton Hall University School of Law
- Joshua D. Wright, Associate Professor of Law, George Mason University School of Law (moderator)


VENUE:

George Mason University School of Law
3301 Fairfax Drive
Arlington, VA 22201


CONFERENCE HOTEL:

The Westin Arlington Gateway
801 North Glebe Road
Arlington, VA 22203
(703) 717-6200

http://www.starwoodhotels.com/westin/property/overview/index.html?propertyID=1513


FURTHER INFORMATION:

For more information regarding this conference or other
initiatives of the Law & Economics Center, please visit:

http://www.MasonLEC.org

Call or send an email to:

Tel: (703) 993-8040
Email: lec@gmu.edu

The Henry G. Manne Program in Law & Economics honors the legacy of Henry G. Manne, Dean Emeritus of George Mason Law School and founder of the Law & Economics Center. Manne was a trailblazer in the development of law and economics, not only as a prominent and influential scholar, but also as an academic entrepreneur. He spurred the development of law and economics into the most influential area of legal scholarship through his Economics Institutes for Law
Professors and Law Institutes for Economics Professors. The Manne Program promotes law-and-economics scholarship by funding faculty research and hosting research roundtables and academic conferences.

http://www.MasonManne.org

April 7, 2011 | Permalink | Comments (0) | TrackBack (0)

Loyalty discounts

Posted by D. Daniel Sokol

Ioana Chioveanu (Universidad de Alicante) and Ugur Akgun (Charles Rivers Associates) discuss Loyalty discounts.

ABSTRACT: This paper considers the use of loyalty inducing discounts in vertical supply chains. An upstream manufacturer and a competitive fringe sell differentiated products to a retailer who has private information about the level of stochastic demand. We provide an analysis of the market outcomes when the manufacturer uses two-part tariffs (2PT), all-unit discounts (AU) and market share discounts (MS). We show that retailer’s risk attitude affects manufacturer’s preferences over these three pricing schemes. When the retailer is risk-neutral, it bears all the risk and all three schemes lead to the same outcome. When the retailer is risk-averse, 2PT performs the worst from manufacturer’s perspective but it leads to the highest total surplus. For a wide range of parameter values (but not for all) the manufacturer prefers MS to AU. By limiting retailer’s product substitution possibilities MS makes the demand for manufacturer’s product more inelastic. This reduces the amount (share of profits) the manufacturer needs to leave to the retailer for the latter to participate in the scheme.

April 7, 2011 | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 6, 2011

Multiproduct firms and price-setting: theory and evidence from U.S. producer prices

Posted by D. Daniel Sokol

Saroj Bhattarai (Penn State Econ) and Raphael Schoenle (Brandeis Econ) describe Multiproduct firms and price-setting: theory and evidence from U.S. producer prices.

ABSTRACT: In this paper, we establish three new facts about price-setting by multiproduct firms and contribute a model that can explain our findings. Our findings have important implications for real effects of nominal shocks and provide guidance for how to model pricing decisions of firms. On the empirical side, using micro-data on U.S. producer prices, we first show that firms selling more goods adjust their prices more frequently but on average by smaller amounts. Moreover, the higher the number of goods, the lower is the fraction of positive price changes and the more dispersed the distribution of price changes. Second, we document substantial synchronization of price changes within firms across products and show that synchronization plays a dominant role in explaining pricing dynamics. Third, we find that within-firm synchronization of price changes increases as the number of goods increases. On the theoretical side, we prese! nt a state-dependent pricing model where multiproduct firms face both aggregate and idiosyncratic shocks. When we allow for firm-specific menu costs and trend inflation, the model matches the empirical findings.

April 6, 2011 | Permalink | Comments (0) | TrackBack (0)

Can Vertical Separation Reduce Non-Price Discrimination and Increase Welfare?

Posted by D. Daniel Sokol

Duarte Brito (Universidade Nova de Lisboa and CEFAGE-UE), Pedro Pereira (Autoridade da Concorrência and IST), and João Vareda (Autoridade da Concorrência and CEFAGE-UE) ask Can Vertical Separation Reduce Non-Price Discrimination and Increase Welfare?

ABSTRACT: We investigate if vertical separation reduces non-price discrimination and increases welfare. Consider an industry consisting of a vertically integrated firm and an independent retailer, which requires access to the vertically integrated firm's wholesaler services. The wholesaler can degrade the quality of input it supplies to either of the retailers. Discrimination occurs if one of the retailers is supplied an input of lower quality than its rival. We show that separation of the vertically integrated firm reduces discrimination against the independent retailer, although it does not guarantee no-discrimination. Furthermore, with separation, the wholesaler may discriminate against the vertically integrated firm's retailer. Vertical separation impacts social welfare through two e¤ects. First, through the double-marginalization effect, which is negative. Second, through the quality degradation effect, which can be positive! or negative. Hence, the net welfare impact of vertical separation is negative or potentially ambiguous.

April 6, 2011 | Permalink | Comments (0) | TrackBack (0)

Noisy Signaling Monopoly

Posted by D. Daniel Sokol

Leonard J. Mirman, University of Virginia - Department of Economics and Marc Santugini, HEC Montreal, Institute of Applied Economics discuss Noisy Signaling Monopoly.

ABSTRACT: We provide a closed-form solution of the monopoly problem when the price imperfectly signals quality to the uninformed buyers, as well as expressions for the effects of noise on output, price, and information flows.

April 6, 2011 | Permalink | Comments (0) | TrackBack (0)

Effects of Entry Deterrent Strategies on Size Distribution of Firms in the Indian Manufacturing

Posted by D. Daniel Sokol

Hariprasad C.G., Competition Commission of India has posted Effects of Entry Deterrent Strategies on Size Distribution of Firms in the Indian Manufacturing.

ABSTRACT: The paper intends to study the relationship between firm size and growth, effects of entry-deterrent-strategies (EDS) on firms’ size distribution (FSD) and determining factors of inequality of firm sizes. One approach is the ‘Law of Proportionate Effect’ (LPE) hypothesis by Gibrat (1931), implicitly suggests that increasing concentration and resulting lognormal distribution are due purely to random process. Another approach we propose is due to systematic processes whereby strategic entry deterrents such as advertising expenditure, intangibles, R & D expenditure and excess capacity are expected to have positive impact on inequality of firm sizes. In practice, though the prevalence of lognormal distributions of firm size indicates that there are stochastic forces at work, such stochastic processes operate along with more systematic influences on concentration. Hence, we propose to study systematic effects such as entry deterrent strategies may be seen as either accelerating or decelerating the stochastic process and it is to these systematic influences on inequality of firm size that we direct our analysis on in this paper. The empirical analysis of the present study is for 8 sectors over 1990-2007 using CMIE-PROWESS data base.

We model inequality as a function of EDS and other control variables referring to Bloch (1981) and estimated results show strong and statistically significant relationship between inequality of firm size and EDS. Intangibles, R&D expenditure, excess capacity and mean firm size are statistically significant and inequality increasing. Number of firms operating and export openness are statistically significant and inequality decreasing. We presume that the analysis has some use to concerned competition policies.

April 6, 2011 | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 5, 2011

Antitrust Merger Efficiencies in the Shadow of the Law

Posted by D. Daniel Sokol

Daniel Sokol (University of Florida Law - also better known as "me", "Danny", or "that tall and lanky guy who talks fast") and Jim Fishkin (Dechert) have a new piece and I think interesting article that was just published in the Vanderbilt Law Review (En Banc) on Antitrust Merger Efficiencies in the Shadow of the Law. We think that this piece makes an important contribution to the discussion of merger efficiencies.

ABSTRACT: This Essay provides an overview of U.S. antitrust merger practice in addressing efficiencies both in terms of actual practice before the agencies and in scholarly work as a response to Jamie Henikoff Moffitt‘s Vanderbilt Law Review article Merging in the Shadow of the Law: The Case for Consistent Judicial Efficiency Analysis.

April 5, 2011 | Permalink | Comments (0) | TrackBack (0)

Partnering with Competitors - Effects of Alliances on Airline Entry and Capacity Decisions

Posted by D. Daniel Sokol

Jun Li, University of Pennsylvania - The Wharton School and Serguei Netessine, INSEAD explain Partnering with Competitors - Effects of Alliances on Airline Entry and Capacity Decisions.

ABSTRACT: The formation of an airline alliance is one of the most important and difficult decisions that has to be made by airline management. In particular, domestic airline alliances have always caused controversy due to the possibility of attenuating the competition, which has been a key concern of policy makers. Before approving such alliances, government authorities therefore pay a lot of attention to how many overlapping routes the two airlines attempting to join forces already have. In this paper we go beyond this point of view and attempt to understand the competitive effects of domestic alliances by analyzing how flight networks change dynamically after an alliance. We analyze six major US airlines from 1998 to 2006 and estimate the changes in their entry/exit/stay behavior by adopting a concept analogical to the difference-in-difference estimation approach. We show that, in the post-alliance era, airlines are more likely to enter/stay and build higher capacity in markets where their alliance partners hold strong market power, compared to markets where non-partners dominate. We show that this tendency is likely to be induced by higher pricing power in the markets dominated by the alliance partners rather than by higher demand in those markets. In a typical duopoly market, the two allied partners are able to charge nearly $9 more per one-way ticket coupon as compared to non-allied competitors. Our findings have important implications for both policy makers and airline practitioners. In addition to reviewing the current overlapping routes before an alliance, it is crucial for policy makers to be aware of how airlines may change their networks dynamically after the alliance, and how this will affect the competition structure. We also find that the allied airlines may have been over-optimistic about the demand-increasing effect of alliances on markets shared with partners, since we find a decrease in load-factors in these markets.

April 5, 2011 | Permalink | Comments (0) | TrackBack (0)

On the Move: Fred McChesney from Northwestern to Miami

Posted by D. Daniel Sokol

Fred McChesney is leaving cold and windy Northwestern Law for the University of Miami Law School. This is a huge pick-up for Miami and a homecoming for Fred who received his JD from Miami (and was a student of Tim Muris).  Welcome to the Sunshine State Fred.

HT: Truth on the Market

April 5, 2011 | Permalink | Comments (0) | TrackBack (0)

Rethinking Merger Efficiencies

Posted by D. Daniel Sokol

Dan Crane (Michigan law) is Rethinking Merger Efficiencies.

ABSTRACT: The two leading merger systems—those of the United States and the European Union—treat the potential benefits and risks of mergers asymmetrically. Both systems require considerably greater proof of efficiencies than they do of potential harms if the efficiencies are to offset concerns over the accumulation or exercise of market power. The implicit asymmetry principle has important systemic effects for merger control. Not only does it stand in the way of some socially desirable mergers, but it may indirectly facilitate the clearance of some socially undesirable mergers. Neither system explicitly justifies this asymmetry and none of the plausible justifications is normatively supportable. The most likely positive explanations for the asymmetry stem from institutional frictions between the lawyer and economist classes in the antitrust agencies, self-preservationist biases by antitrust regulators, and misplaced ideological opposition to industrial concentration. In principle, the probability-adjusted net present value of merger risks should be treated symmetrically with the probability-adjusted net present value of merger efficiencies.

April 5, 2011 | Permalink | Comments (0) | TrackBack (0)

Spotlight on Fiona Scott Morton

Posted by D. Daniel Sokol

Scottmortonf

Christine Varney made official what had been known unofficially for a few weeks - replacing Carl Shapiro at DOJ as Chief Economist will be Fiona Scott Morton of the Yale School of Management.  She is an excellent IO economist who has done some very interesting work in health care competition issues. For those of you who remember my Best of the Best: Top Female Antitrust Economics and Law Professors, Fiona Scott Morton made that list. When I published the list in May of 2010, I hoped that the US antitrust agencies would take the list seriously and think about picking from it for a chief economist. I am glad to see that DOJ stepped up to the plate.

April 5, 2011 | Permalink | Comments (0) | TrackBack (0)

The Development of General Principles for EU Competition Law Enforcement – The Protection of Legal Professional Privilege

Posted by D. Daniel Sokol

Michael J. Frese, Amsterdan Center for Law & Economics (ACLE) explains The Development of General Principles for EU Competition Law Enforcement – The Protection of Legal Professional Privilege.

ABSTRACT: This papers discusses the scope of the EU principle of legal professional privilege ('LPP') and the mechanisms for bottom-up integration. LPP refers to the confidential nature of certain written communications between lawyer and client. Bottom-up integration is the process whereby domestic legal principles are elevated to EU legal principles. The recent Akzo Nobel judgment of the European Court of Justice revisits the principle of LPP and clarifies the conditions for bottom-up integration.

April 5, 2011 | Permalink | Comments (0) | TrackBack (0)