Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Friday, January 28, 2011

Input Price Discrimination When Buyers Operate in Multiple Markets

Posted by D. Daniel Sokol

Anil Arya, Ohio State University (OSU) - Fisher College of Business and Brian Mittendorf, Ohio State University (OSU) - Fisher College of Business analyze Input Price Discrimination When Buyers Operate in Multiple Markets.

ABSTRACT: This paper revisits third degree price discrimination when input buyers serve multiple product markets. Such circumstances are prevalent since buyers often use the same input to produce different outputs, and even homogenous outputs are routinely sold through different locations. The typical view is that price discrimination stifles efficiency (and welfare) by resulting in price concessions to less efficient firms. When buyers serve multiple markets, price discrimination leads to price breaks for firms in markets with lower demand. When lower demand markets also have less competition, price discrimination can provide welfare gains by shifting output to less competitive markets.

January 28, 2011 | Permalink | Comments (0) | TrackBack (0)

Sokol - Do I really Look Like "The Greatest Insurance Agent of All Time" in the Nationwide Ads?

Posted by D. Daniel Sokol

I read through my student evaluations this morning from last semester (good news: high marks).  A number of the evaluations noted that I had a more than passing resemblance to the guy in the Nationwide Insurance ads and that we have similar mannerisms.  What do you readers think?

 

 

January 28, 2011 | Permalink | Comments (2) | TrackBack (0)

The Re-Emergence of Prices Surveillance

Posted by D. Daniel Sokol

David Charles Cousins, Monash University - Faculty of Law and Allan Fels, Australia and New Zealand School of Government address The Re-Emergence of Prices Surveillance.

ABSTRACT: In an election year with inflation starting to creep up and beyond the Reserve Bank of Australia’s target zone, it is not surprising that the focus of the major parties turned to prices. In particular, petrol prices were of significant consumer concern, having risen by some 15 cents per liter over the January – June 2007 period from an already historical high. In June, the Australian Competition and Consumer Commission (‘ACCC’) raised concerns that local prices had remained high despite a significant fall in international prices. Shortly after this, the Federal Opposition announced that if elected, it would ‘appoint a national Petrol Commissioner with the sole responsibility to formally monitor and investigate price gouging and collusion’. The ACCC then recommended to the Treasurer that a general inquiry into petrol prices be conducted by the ACCC, and this was agreed to by the Treasurer the following day. The inquiry was to be completed by the end of October, before the election date later in November, but was subsequently given an extension of time. Also in July, the Opposition Leader made what was billed as a major statement on the cost of living in Australia. He promised, if in government, to strengthen the powers of the ACCC to monitor supermarket prices and to direct the ACCC to hold a National Grocery Pricing Inquiry. The ACCC would also be directed to publish a periodic survey of grocery prices at supermarkets for a typical shopping basket to be published on a dedicated website. The petrol and groceries inquiries subsequently undertaken by the ACCC were both substantial exercises requiring extensive involvement by the Chairman and a number of the Commissioners. They were the first significant prices surveillance inquiry references given by the Federal Government to the ACCC since its establishment through the merger of the Trade Practices Commission and the Prices Surveillance Authority. The provisions of the old Prices Surveillance Act 1983 (Cth) were generally incorporated into Part VIIA of the Trade Practices Act 1974 (Cth) in 2004. This paper summarises the key aspects of these two inquiries and comments on the policy recommendations made by them. Whilst generally supporting the views the ACCC has put, there are some areas where we have a different emphasis. Some further general observations on the use of the prices surveillance powers conclude the paper.

January 28, 2011 | Permalink | Comments (1) | TrackBack (0)

Preventing Merger Unilateral Effects: A Nash-Cournot Approach to Asset Divestitures

Posted by D. Daniel Sokol

Patrice Bougette, Université de Nice Sophia Antipolis - Groupe de Recherche en Droit, Economie et Gestion (GREDEG), Université de Montpellier 1 explores Preventing Merger Unilateral Effects: A Nash-Cournot Approach to Asset Divestitures.

ABSTRACT: This paper aims to analyze the effectiveness of asset transfers in preventing unilateral effects of a merger. We show that asset divestitures allow the remedying of certain price increases. Market size negatively impacts the scope of the divestiture package, while the number of merging firms increases with it. In spite of the required asset sale, parties’ profitability remains ensured in most cases. Buyers always make profit from their purchase if industry fixed costs are rather low. We also add the alternative of a second buyer and compare outcomes with both consumer and welfare standards. Furthermore, as many mergers lead to efficiency gains, we integrate specific cost synergies and show that the higher the synergies, the smaller the divestiture share. In the case when no buyers are available, we show that the option of divesting to a start-up entity is bound to fail if firms’ technology remains the same. Lastly, we find that product differentiation can reduce the efficiency of the asset transfer.

January 28, 2011 | Permalink | Comments (1) | TrackBack (0)

Thursday, January 27, 2011

Price-Concentration Analysis in Merger Cases with Differentiated Products

Posted by D. Daniel Sokol

Walter Beckert, University of London, Birkbeck College - School of Economics, Mathematics and Statistics and Nicola Mazzarotto, discusses Price-Concentration Analysis in Merger Cases with Differentiated Products.

ABSTRACT: This paper aims to analyze the effectiveness of asset transfers in preventing unilateral effects of a merger. We show that asset divestitures allow the remedying of certain price increases. Market size negatively impacts the scope of the divestiture package, while the number of merging firms increases with it. In spite of the required asset sale, parties’ profitability remains ensured in most cases. Buyers always make profit from their purchase if industry fixed costs are rather low. We also add the alternative of a second buyer and compare outcomes with both consumer and welfare standards. Furthermore, as many mergers lead to efficiency gains, we integrate specific cost synergies and show that the higher the synergies, the smaller the divestiture share. In the case when no buyers are available, we show that the option of divesting to a start-up entity is bound to fail if firms’ technology remains the same. Lastly, we find that product differentiation can reduce the efficiency of the asset transfer.

January 27, 2011 | Permalink | Comments (0) | TrackBack (0)

On the Effects of Selective Below-Cost Pricing in a Vertical Differentiation Model

Posted by D. Daniel Sokol

Pu Chen, University of Bielefeld - Department of Business Administration and Economics has thoughts On the Effects of Selective Below-Cost Pricing in a Vertical Differentiation Model.

ABSTRACT: We analyse the effects of predation in a vertical differentiation model, where the highquality incumbent is able to price discriminate while the low-quality entrant sets a uniform price. The incumbent may act as a predator, that is, it may price below its marginal costs on a subset of consumers to induce the rival's exit. We show that the entrant may adopt an aggressive attitude to make predation unprofitable for the incumbent. In this case predation does not occur and the equilibrium prices are lower than the equilibrium prices which would emerge in a contest of explicitly forbidden predation. Moreover, we show that when the incumbent may choose whether to price discriminate or not before the game starts, if the quality cost function is sufficiently convex, there always exists a parameter space on which the incumbent prefers to commit not to price discriminate.

January 27, 2011 | Permalink | Comments (0) | TrackBack (0)

Intellectual Liability in Context

Posted by D. Daniel Sokol

John M. Golden, University of Texas School of Law has responded to Intellectual Liability in Context.

ABSTRACT: In Intellectual Liability, Daniel Crane reemphasizes that a “right to exclude” is only one part of a Hohfeldian package of rights, privileges, powers, or immunities that government can grant an intellectual property (IP) owner. Crane points out that an overly vigorous right to exclude, one backed up by a strong presumption of injunctive relief against continued infringement, could result in a suboptimal IP package even from the IP owner’s perspective. Drawing on examples of antitrust-influenced behavior of collective-rights organizations and standard-setting organizations, Crane argues that forgoing property-rule treatment in the Calabresi–Melamed sense can be more than compensated, socially and possibly even privately, by IP owners’ gains of privileges and powers to participate in one or more practices of “bundling,” as through a collective-rights organization or standard-setting organization, or through acquisition of large numbers of patents in the manner of a so-called “patent troll.” Crane’s bottom line thus expands on the prescription underlying Louis Kaplow’s “ratio test” of more than a quarter century ago: the optimal package to be granted IP owners should be developed by providing “those rights that grant just enough reward to induce... inventive or creative activity at the lowest social cost possible.”

January 27, 2011 | Permalink | Comments (0) | TrackBack (0)

Strategic Delegation Improves Cartel Stability

Posted by D. Daniel Sokol

Martijn A. Han, University of Amsterdam - Amsterdam Center for Law & Economics has written on Strategic Delegation Improves Cartel Stability.

ABSTRACT: Fershtman and Judd (1987) and Sklivas (1987) show how strategic delegation in the one-shot Cournot game reduces firm profits. However, with infinitely repeated interaction, strategic delegation allows for an improvement in cartel stability compared to the infinitely repeated standard Cournot game, thereby actually increasing profits.

January 27, 2011 | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 26, 2011

Tying, Bundling, and Loyalty/Requirement Rebates

Posted by D. Daniel Sokol

Nic Economides (NYU - Stern School of Business) has a chapter on Tying, Bundling, and Loyalty/Requirement Rebates.

ABSTRACT: I discuss the impact of tying, bundling, and loyalty/requirement rebates on consumer surplus in the affected markets. I show that the Chicago School Theory of a single monopoly surplus that justifies tying, bundling, and loyalty/requirement rebates on the basis of efficiency typically fails. Thus, tying, bundling, and loyalty/requirement rebates can be used to extract consumer surplus and enhance profit of firms with market power. I discuss the various setups when this occurs.

January 26, 2011 | Permalink | Comments (0) | TrackBack (0)

Vertical integration in the Czech agriculture – focus on dairy and meat sectors

Posted by D. Daniel Sokol

Karel Jonda (Charles University) explores Vertical integration in the Czech agriculture – focus on dairy and meat sectors.

ABSTRACT: In this paper we provide an overview of the two most important sectors in the Czech agriculture: the dairy farming and the meat production. Since the focus of our paper in on the vertical integration, we provide this overview along the whole production vertical line. We start with the suppliers for the farmers and continue through the farm production, distribution and milk and meat processing and storage facilities. The final links in the production vertical structure are wholesale and retail consumers. In both of the considered vertical lines we concentrate on the key analytical parameters which are price transmission elasticities and we provide an overview of their values obtained in the Czech agricultural economic research. Since the question of competition and strategic relations inside the vertical supply-demand structure is an important topic in industrial organization theory and policy, we also pay attention to ma! jor cases of alleged fair competition violations in the Czech meat and diary industry.

January 26, 2011 | Permalink | Comments (0) | TrackBack (0)

Automobile engine variants and price discrimination

Posted by D. Daniel Sokol

Øyvind Thomassen (Katholieke Universiteit Leuven) investigates Automobile engine variants and price discrimination.

ABSTRACT: Using a structural model of demand for automobile engine variants, this paper finds that there is second-degree price discrimination: markups increase with engine size. Still, average markups are lower than when models have just one engine. The paper develops the first empirical demand framework suitable for markets with variants. There is an unobserved product characteristic and a consumer-specific logit term for classes of products, but both are fixed across variants. Fixed effects control for unobservables. The literature’s assumption of orthogonality between unobserved and observed product characteristics is not needed.

January 26, 2011 | Permalink | Comments (0) | TrackBack (0)

Cartel Risks & Compliance

Posted by D. Daniel Sokol

Attend IBC Legal's 4th annual Cartel Risks & Compliance conference (29th March 2011 in Brussels) to minimise your exposure to cartel risks and to learn how to deal with the consequences of any such activities.

All of today's most challenging topics will be analysed, for example your overall strategy when dealing with multi-jurisdictional investigations and the implementation of the European Commission's settlement package as in the DRAM case. - more topics on the programme.

Your speaker line-up includes:

  • Johan Ysewyn, Partner, Linklaters LLP, Belgium
  • Edward Anderson, Head of Competition Law, Sainsbury's Supermarkets Ltd, UK
  • Laurent Geelhand, General Counsel Europe, Michelin Group, France
  • Anny Tubbs, European Competition Counsel, Unilever European Legal Services, Belgium
  • Kris de Keyser, Head of Unit, Cartel Settlements, DG Competition, European Commission, Belgium (subject to final confirmation)
  • Nicola Northway, Managing Director, Group Competition Law, Barclays Bank plc, UK
  • Peter Camesasca, Partner, Covington & Burling, Belgium
  • Miguel Odriozola, Partner, Clifford Chance LLP, Spain
  • Laurent Garzaniti, Partner, Freshfields Bruckhaus Deringer LLP, Belgium
  • Dr Till Schreiber, Legal Counsel, Cartel Damage Claims, Belgium

Plus another 6 experts - see the full list.

Accreditation: 6.5 SRA hours, Bar Council hours will also be available.

"Extremely interesting conference. The choice of speakers made this event truly enjoyable and worth every minute to be there!" (M Peristeraki, Mayer Brown International LLP)

To benefit from the £200 early bird saving remember to book by the end of this Friday:

              > Visit the website
              > Email [email protected]  

              > Call +44 (0) 20 7017 5503

You will need to quote VIP Code: FNDQXGS in all correspondence.

January 26, 2011 | Permalink | Comments (0) | TrackBack (0)

Two-Sided B2B Platforms

Posted by D. Daniel Sokol

Bruno Jullien (Toulouse - Econ) summarizes Two-Sided B2B Platforms.

ABSTRACT: This chapter provides a roadmap to the burgeoning literature on two-sided markets with a specific focus on BtoB market places. On-line intermediation involves two-sided network effects between buyers and sellers, and the implications for optimal BtoB platforms’ tariffs are discussed. The chapter discusses first the monopoly case, drawing attention to the distinction between upfront registration and transaction fees. Then the competitive case is discussed, with different degrees of differentiation, the distinction between single-homing and multi-homing, and different business models. The last section is devoted to non-price issues such as tying, the design of the matching process and the ownership structure.

January 26, 2011 | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 25, 2011

More Ian Norris - 3rd Circuit Appeals brief on whether outside counsel can serve as a "conduit" to the grand jury of a false statement

Posted by D. Daniel Sokol

There is an interesting crim law - antitrust intersection development in the Ian Norris case.  See the recent story in Corporate Counsel Magazine.  The policy question is whether an outside counsel can serve as a "conduit" to the grand jury of a false statement. That is, is any omission of a fact to your defense attorney equivalent to false testimony before the grand jury?

I attach Appealant's brief (authored by the White & Case team of J Mark Gidley and Christopher M Curran). Download 2011-01-21_Appellant's_Brief[1]

January 25, 2011 | Permalink | Comments (0) | TrackBack (0)

Product differentiation on a platform: the informative and persuasive role of advertising

Posted by D. Daniel Sokol

Dries De Smety and Patrick Van Cayseele (both Katholic University of Leuven - Econ) explain Product differentiation on a platform: the informative and persuasive role of advertising.

ABSTRACT: Both sides of a two-sided market are usually modeled as markets without product differentiation. Often however,it will be profit maximizing to differentiate one or two sides in two or more types. In a simple theoretical model,inspired by Yellow Pages,we show that this decision crucially depends on the appreciation of these differentiated types by the other side. We argue that this consists of two parts: first, a preference for informative advertisement by users and second, the effect of persuasive advertisements on users. The relation between both effects drives the monopolist decision to engage in product differentiation. We test this conceptual framework in an empirical investigation of Yellow Pages. We find that Yellow Pages publishers offer large ads even though users don't value them at all. The economic rationale for this is that each advertisement type contributes directly (by the price paid for it) and indirectly! (by increased usage) to revenues. Large ads are mainly set for this direct contribution, small ads for this indirect contribution. If a platform can choose the size, it will make the size difference between small and large ads as large as possible, in order to attract as much users as possible, but also to induce self selection among advertisers.

January 25, 2011 | Permalink | Comments (0) | TrackBack (0)

Vertical control of a distribution network - an empirical analysis of magazines

Posted by D. Daniel Sokol

Stijn Ferrari (National Bank of Belgium and Catholic University of Leuven) and Frank Verboven (Catholic University of Leuven) addresses Vertical control of a distribution network - an empirical analysis of magazines.

ABSTRACT: How does an upstream firm determine the size of its distribution network, and what is the role of vertical restraints? To address these questions we develop and estimate two models of outlet entry, starting from the basic trade-o¤ between market expansion and fixed costs. In the coordinated entry model the upstream firm sets a market-specific wholesale price to implement the first-best number of outlets. In the restricted/free entry model the upstream firm has insufficient price instruments to target local markets. It sets a uniform wholesale price, and restricts entry in markets where market expansion is low, while allowing free entry elsewhere. We apply the two models to magazine distribution. The evidence is more consistent with the second model where the upstream firm sets a uniform wholesale price and restricts the number of entry licenses. We use the model to assess the profitability of modifying the vertical rest! raints. A government ban on restriced licensing would reduce profits by a limited amount, so that the business rationale for restricted licensing should be sought elsewhere. Furthermore, introducing market-specific wholesale prices would implement the first-best, but the profit increase would be small, providing a rationale for the current uniform wholesale prices.

January 25, 2011 | Permalink | Comments (0) | TrackBack (0)

Mergers and Partial Ownership

Posted by D. Daniel Sokol

Øystein Foros (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration), Hans Jarle Kind (Dept. of Economics, Norwegian School of Economics and Business Administration), and Greg Shaffer (University of Rochester and University of East Anglia) address Mergers and Partial Ownership.

ABSTRACT: In this paper we compare the profitability of a merger between two firms (one firm fully acquires another) and the profitability of a partial ownership arrangement between the same two firms in which the acquiring firm obtains corporate control over the pricing decisions of the acquired firm. We find that joint profit can be higher in the latter case because it may result in a greater dampening of competition with respect to an outside competitor. We also derive comparative statics on the prices of the acquiring firm, the acquired firm, and the outside firm and use them to explain puzzling features of the pay-TV markets in Norway and Sweden.

January 25, 2011 | Permalink | Comments (0) | TrackBack (0)

State aids law and the application of competition law to exclusive rights

Posted by D. Daniel Sokol

State aids law and the application of competition law to exclusive rights
CENTRE FOR LAW AND ECONOMICS FACULTY OF LAWS
8 Masters level seminars
from 27 January - 17 March 2011
on Thursday from 6 - 8pm
at the UCL Faculty of Laws
Convened by Dr Ioannis Lianos (UCL)

About the Course
The course will examine the EU competition law provisions that apply to State anticompetitive practices.
In particular, the course will focus on the State aids control in the European Union and on the application of EU competition law to public undertakings and undertakings operating services of general economic interest. This is an area of particular practical importance in Europe and beyond as almost all economies have an hybrid nature, with an important part of economic activity being performed or controlled by
the State. The course will provide a clear practical analysis of this complex area of EU competition law focusing on compliance.

By the end of the course, participants should be able to:
● demonstrate a critical knowledge of EU competition law applied to the State (in particular State aids control and competition rules that apply to public undertakings)
● understand the underpinning theories and policies that explain European regulation of State activities in competitive markets

Course Outline:
27 January State Aids I: Foundations of State aids law
Overview of the system of State aid control under Arts 107-108 TFEU; definition of
state aid; effect, aims and causes of State aids; forms of state aids
Taught by Kelyn Bacon

3 February State Aids II: Foundations of State aids law
Advantage, beneficiary of aid, private operator in a market economy test, compensation for public service obligations
Taught by Kelyn Bacon

10 February State Aids III: Tax Exemptions
Tax exemptions, parafiscal and other tax charges, differential taxation, regional taxation, general fiscal measures.
Taught by Kelyn Bacon

17 February State Aids IV: Case studies in State aid law.
The objective of this seminar will be to focus on some practical but complex questions and fact patterns in order to illustrate the principles learned in the previous seminars
Taught by Alexandros Stratakis

24 February State Aids V: Enforcement of State aid law
The administrative procedure before the Commission, the role of the European
Court, and the role of national courts
Taught by Kelyn Bacon

3 March State Aids VI: An economic approach to state aids law – a compliance toolkit
The first half of the seminar will focus on the evolution of state aids law towards an
economic approach and will illustrate how economic arguments might be employed in a practical context. The second half of the seminar will focus on the issue of compliance to state aids law and will develop a set of clear principles to be aware of in order to avoid being caught under the prohibition of the treaty!
Taught by Ioannis Lianos and Alexandros Stratakis

10 March Exclusive rights and the application of Article 106(1)
The seminar will delve into the analysis of the case law of the European court and
the European Commission on the scope of the prohibition principle included in
Article 106(1) TFEU.
Taught by Juliette Twumasi-Anokye

17 March Exclusive rights and the application of Article 106(2)
Member States can argue that exclusive rights are essential for the provision of
services of general economic interest and other public interest objectives in order
to benefit from the exception to the prohibition rule under Article 106(2) TFEU. This
lecture will analyze the case law and will also provide clear and practical advice for a more effective use of Article 106(2).
Taught by Juliette Twumasi-Anokye

About the Teachers:
Kelyn Bacon is a senior junior with extensive experience in competition and EU law. She has appeared in numerous landmark cases in the High Court, Court of Appeal, House of Lords, CFI and ECJ, as well as the Competition Appeal Tribunal and proceedings before the Competition Commission and European Commission. Her clients have included major domestic and international private clients such as GE, Microsoft, Intel, Umbro, Adidas, Visa, BUPA, O2, Vodafone and BSkyB, as well as government departments and sectoral regulators. She also regularly appears for the UK government in preliminary references to the ECJ Kelyn is currently acting for Intel in its appeal to the European Court against an Article 102 infringement decision, for Meridiana in European Court proceedings relating to State aid granted to Alitalia, and for the OFT in the Construction Cartel appeals in the Competition Appeal Tribunal. Kelyn is cited in Chambers and Partners as one of the leading juniors in Competition/EU law, Administrative and Public law and Telecommunications, and in the Legal 500 as one of the leading juniors in EU and competition law. She was awarded ‘Competition/EU Junior of the Year’ at the 2008 Chambers Bar Awards. Kelyn is the editor and main co-author of European Community Law of State Aid (OUP, 2009) and numerous other publications in state aids law and competition law in general.

Dr. Ioannis Lianos is a Reader in Competition Law and Economics at UCL Laws, director of the UCL Centre for Law and Economics and co-director of the Jevons Institute of Competition Law and Economics. He has published extensively prize-winning monographs, articles in journals such as Antitrust Law Journal, Journal of Competition Law and Economics, Common Market Law Review, Cambridge Yearbook of European Legal Studies, Columbia Business Law Review and collected volumes. Ioannis is actively involved in competition policy as a non-governmental advisor at the ICN, a research partner with UNCTAD in Geneva or having contributed to European Commission’s consultations. His main research interest is the analysis of economic evidence by courts and competition authorities. Ioannis is a qualified attorney at the Paris and Athens bars.

Alexandros Stratakis is a Senior Associate in the EU, Competition and Trade Department of Baker & McKenzie, London. His practice covers EU, UK, (including Greek and Cypriot) competition law, State aid and regulatory law as well as general EU Law. He has provided advice on a wide variety of complex competition (merger control, Articles 101 and 102 TFEU) and state aid issues and represented clients before antitrust authorities and European and national courts. In the area of State aid, Alex has advised governments, governmental organizations and private companies active on various industries. Alex was admitted to practice in Greece (Athens Bar Association) in 2004 and in England and Wales in 2009. He holds an LL.B (Athens Law School) and a MJur (LL.M) in European and Comparative Law (University of Oxford). He also holds an LL.M (James Ken Scholar) from Columbia Law School, New York.

Dr Juliette Twumasi-Anokye is a lawyer by profession and is currently a Principal for Postcomm the UK independent regulator and advisory body on postal services. Her role involves providing specialist legal advice to the regulator. She has several years experience in competition law, competition policy and economic regulation. She has advised on major cases including cartels, abuse of dominant positions, vertical price restraints, competition in professional services, price controls and the establishment of regulatory frameworks. She has a particular interest in Article 106(2), services of general economic interest, utility regulation, and the application of competition law in the public services sector. Previously, Juliette worked as a Principal Case Officer at the Office of Fair Trading, and as a solicitor in private practice. She holds a PhD from King’s College London (Thesis: competition law and public services: a reconciliatory approach) and an LLM from University College, London.

Download Ucl_stateaids_2011

January 25, 2011 | Permalink | Comments (0) | TrackBack (0)

A Test of Monopoly Price Dispersion Under Demand Uncertainty

Posted by D. Daniel Sokol

Brad Humphreys (University of Alberta, Department of Economics) and Brian Soebbing (University of Alberta, Physical Education and Recreation offer A Test of Monopoly Price Dispersion Under Demand Uncertainty.

ABSTRACT: Dana (2001) developed a model of price dispersion under demand uncertainty. The model predicts that, in the face of uncertain demand and inflexible prices, monopolists maximizes pro fits using ex ante price discrimination. We test the predictions of this model using a unique data set from Major League Baseball (MLB). Estimation of a two-way fixed effects model indicate that ticket price dispersion changes systematically with demand uncertainty in MLB, verifying the predictions of the model.

January 25, 2011 | Permalink | Comments (0) | TrackBack (0)

Monday, January 24, 2011

Welcome Shearman & Sterling Antitrust Blog - Antitrust Unpacked

Posted by D. Daniel Sokol

Law firm Shearman & Sterling has a new antitrust blog called Antitrust Unpacked.  Welcome to the blogosphere. 

January 24, 2011 | Permalink | Comments (0) | TrackBack (0)