Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Monday, September 12, 2011

Harmonizing Antitrust and Patent Law

Posted by D. Daniel Sokol

Elizabeth I. Winston, Catholic University of America (CUA) - Columbus School of Law attempts Harmonizing Antitrust and Patent Law.

ABSTRACT: Antitrust and intellectual property laws promote innovation and competition. As long as the costs of promotion do not exceed the benefit to society, then the laws act in harmony. Discord arises when patent holders use public and private ordering to restrain competition, restrict downstream trade, prevent the development of competing products and limit output by competitors. Using the Patent Act and the misperception of antitrust immunity to create a parallel and under-regulated legal system allows a small number of patent holders to coordinate their behavior to maximize profits and minimize competition. The Patent Act provides no shield to prosecution for antitrust violations - such is a patent misperception only. Harmony comes from balancing the costs of protection with the benefit to society. Innovation is best protected through the protection of intellectual property rights and the protection of competition.

September 12, 2011 | Permalink | Comments (0) | TrackBack (0)

One-stop shopping behavior, buyer power, and upstream merger incentives

Posted by D. Daniel Sokol

Vanessa von Schlippenbach, Christian Wey (both Heinrich Heine University of Dusseldorf) explain One-stop shopping behavior, buyer power, and upstream merger incentives.

ABSTRACT: We analyze how consumer preferences for one-stop shopping affect the bargaining relationship between a retailer and its suppliers. One-stop shopping preferences create demand complementarities among otherwise independent products which lead to two opposing effects on upstream merger incentives: first a standard double mark-up problem and second a bargaining effect. The former creates merger incentives while the later induce suppliers to bargain separately. When buyer power becomes large enough, then suppliers stay separated which raises final good prices. Such an outcome is more likely when one-stop shopping is pronounced.

September 12, 2011 | Permalink | Comments (0) | TrackBack (0)

Price Cycles and Price Leadership in Gasoline Markets: New Evidence from Canada

Posted by D. Daniel Sokol

David P. Byrne, University of Melbourne and Roger Ware, Queen's University discuss Price Cycles and Price Leadership in Gasoline Markets: New Evidence from Canada.

ABSTRACT: This paper studies the determinants of Edgeworth Cycles, price leadership and coordination in retail gasoline markets using daily station-level price data for 110 markets in Ontario, Canada for 2007-2008. We find an "inverse-U" relationship between markets' propensity to exhibit price cycles and their size. More concentrated markets are less likely to exhibits cycles and we highlight regional clustering among cycling and non-cycling markets. Within cycling markets, we find brands' stations (Esso, Shell, Petro-Canada, Sunoco) lead price jumps and coordinate market prices, while independents (Ultramar, Pioneer, Olco, MacEwen) aggressively undercut prices over the cycle.

September 12, 2011 | Permalink | Comments (0) | TrackBack (0)