Antitrust & Competition Policy Blog

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

Monday, August 1, 2011

Market Power Screens Willingness-to-Pay

Posted by D. Daniel Sokol

E. Glen Weyly (Harvard) Jean Tirole (Toulouse) have a new paper on Market Power Screens Willingness-to-Pay.

ABSTRACT: What is the best way to reward innovation? While prizes avoid deadweight loss, intellectual property screens out projects generating low consumer surplus per unit sold. We propose a stretch parameterization of demand under which innovations di er in both the size of the market they create and consumers' average willingness-to-pay for them. We solve the resulting multidimensional screening problem by decomposing the analysis into a separate choice of the level and structure of rewards for innovations. Optimal policy generally calls for some market power but never full monopoly pricing. The appropriate degree of market power is determined by a value-weighted average of the innovation supply elasticity multiplied by the log-variance of the ratio of the monopoly prices to quantities, opening our analysis to empirical calibration. Our results also shed light on the pricing of platforms, incentives within rms for product development and public infrastructure.

August 1, 2011 | Permalink | Comments (0) | TrackBack (0)

Call for Papers: Antitrust and the Economic Crisis

Posted by D. Daniel Sokol

The Italian annual journal CONCORRENZA E MERCATO invites submissions of full papers for publication in the Journal’s coming issue (2012). Contributions should reflect on

Overview of the topic:
The present economic crisis shows some signs of abating but its full effects have yet to be felt. The repercussions that economic crises have had on antitrust, both in Europe and other jurisdictions, have been examined in the past but merit a fresh look in view of what appears to be a more hard‐line approach by competition authorities in the current crisis. This for example is evidenced by the words of the former EU Commissioner for Competition Neelie Kroes, who said that competition law was part of the solution to the current economic problems, and by the enforcement action of DG Competition in the face of state aids to banks.

The journal seeks contributions that confront the role that competition law plays in economic crises. We welcome papers that consider this either with an analysis of the way the current law addresses the crises, or with a historical perspective on how competition law has responded in times of crisis; and papers with a national, regional, or a global focus; as well as papers that consider this issue from a wider
theoretical perspective.

Another angle from which we would like to invite contributions is that the current economic crisis is not impacting all countries in the same way and that some (e.g. China) are seeing a period of growth: what are the implications of this uneven economic development on competition law, domestically and internationally?

Completed papers shall be submitted via email to the editorial staff (Fabio Di Cristina and Marilena Filippelli) via email at
by December 31, 2011 (see note).

Authors will be notified of acceptance by February 28, 2012 and will be asked to submit the final version of the paper, taking into account the comments of referees and editors, by April 30, 2012.

Submitted papers should not have been published by, or be in submission to another journal.

A selection of papers will be presented at the annual conference of CONCORRENZA E MERCATO to be held in May 2012. Fully edited papers will be published in the 2012

The Board of Directors (Gustavo Ghidini, Piergaetano Marchetti, Marcello Clarich, Fabiana Di Porto) and members of the Scientific and Editorial Board (Laura Ammannati, Sandro Amorosino, Emanuela Arezzo, Francesco Denozza, Joseph Drexl,
Valeria Falce, Alberto Maria Gambino, Mario Libertini, Pier Giuseppe Monateri, Giorgio Monti, Giulio Napolitano, Antonio Nicita, Anthony Ogus, Gustavo Olivieri, Ugo Pagano, Pier Luigi Parcu, Roberto Pardolesi, Alberto Pera, Riccardo Perissich, Luigi Prosperetti, Mario Siragusa, Andrea Stazi, Marina Tavassi, Giuseppe Tesauro, Richard Whish) will select the works and appoint referees.

Papers can be either in Italian, English, Spanish or French (other languages may be accepted upon approval of the Scientific and Editorial Board).

CONCORRENZA E MERCATO also welcomes contributions on competition law and economics dealing with issues others than that of the present Call for papers. By December 31, 2011 these contributions should be submitted to be anonymously peer reviewed in view to be published in the forthcoming issue of the Journal.


August 1, 2011 | Permalink | Comments (0) | TrackBack (0)

Patterns of Technology, Industry Concentration, and Productivity Growth Without Scale Effects

Posted by D. Daniel Sokol

Colin Davis (Institute for International Education, Doshisha University) and Ken-ichi Hashimoto (Graduate School of Economics, Kobe University) address Patterns of Technology, Industry Concentration, and Productivity Growth Without Scale Effects.

ABSTRACT: This paper investigates the relationship between geographic patterns of industrial activity and endogenous growth in a two region model of trade that exhibits no scale effect. The in-house process innovation of manufacturing firms drives productivity growth and is closely associated with firm-level scales of production and relative levels of accessible technical knowledge. Focusing on long-run industry shares and a cross-region productivity gap, we find that dispersed equilibria with positive industry shares for both regions always produce higher growth rates than core-periphery equilibria with all industry locating in one region. Moreover, the highest growth rate arises in a symmetric steady state that features no productivity gap and equal shares of industry leading to the conclusion that the geographic concentration of industry has a negative impact on overall growth. Convergence towards a dispersed equilibrium, howev! er, is contingent on the levels of inter-regional transport costs and knowledge dispersion. Finally, we explore the implications of greater economic integration arising from reduced transport costs and greater knowledge dispersion for patterns of industry and productivity, and for regional welfare levels within a dispersed equilibrium.

August 1, 2011 | Permalink | Comments (0) | TrackBack (0)

How Dishonesty Killed the Cartel Offence

Posted by D. Daniel Sokol

Andreas Stephan, University of East Anglia (UEA) - Centre for Competition Policy explains How Dishonesty Killed the Cartel Offence.

ABSTRACT:This paper argues that the UK cartel offence, introduced by the Enterprise Act of 2002 is no longer workable in its current form. The inclusion of dishonesty was designed to signal the seriousness of cartel practices to the business community and wider public, but dishonesty hinges on a contemporary judgement that requires attitudes to be sufficiently hardened to begin with. The finding in Norris that secret price fixing cannot in itself be dishonest, poor case selection by the OFT and the collapse of the first full trial, all suggest the offence should be repealed or reformed.

August 1, 2011 | Permalink | Comments (0) | TrackBack (0)

Sunday, July 31, 2011

Is China's AML Merger Policy Protectionist?

Posted by D. Daniel Sokol

The FT has a story about claims regarding the uneven use of Chinese merger control against foreign firms. This would make for a great empirical project since the story has too much of a speculative bent to know one way or another whether there is proectitionism at play.

July 31, 2011 | Permalink | Comments (0) | TrackBack (0)