Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Friday, February 18, 2011

Horizontal Mergers, Structural Remedies, and Consumer Welfare in a Cournot Oligopoly with Assets

Posted by D. Daniel Sokol

Thibaud Verg - Autorité de la Concurrence and CREST-LEI discusses Horizontal Mergers, Structural Remedies, and Consumer Welfare in a Cournot Oligopoly with Assets.

ABSTRACT: Competition authorities sometimes require that firms divest some of their assets to rivals in order to allow a merger to take place. This paper extends the results of Farrell and Shapiro [1990a] and shows that, in the absence of technological synergies, a merger is highly unlikely to benefit consumers, even if it is subjected to appropriate structural remedies. For instance, a merger may ultimately lead to a lower price only if at least two different firms acquire the divested assets, and if the merging parties had relatively important pre-merger market shares.

February 18, 2011 | Permalink | Comments (0) | TrackBack (0)

Transplanting Antitrust in China: Economic Transition, Market Structure, and State Control

Posted by D. Daniel Sokol

Wentong Zheng (Buffalo - Law) has posted Transplanting Antitrust in China: Economic Transition, Market Structure, and State Control.

ABSTRACT: This Article examines the compatibility of Western antitrust models as incorporated in China’s first comprehensive antitrust law – the Antimonopoly Law (“AML”) – with China’s local conditions. It identifies three forces that shape competition law and policy in China: China’s current transitional stage, China’s market structures, and pervasive state control in China’s economy. This Article discusses how these forces have limited the applicability of Western antitrust models to China in three major areas of antitrust: cartels, abuse of dominant market position, and merger review. Specifically, it details how these forces have prevented China from pursuing a rigorous anti-cartel policy, how they have led to a mismatch between monopoly abuses that are prohibited under the AML and monopoly abuses that are most prevalent in China’s economy, and how they have prevented the merger review process under the AML from being meaningfully applied to domestic firms. This Article demonstrates that despite having a Western-style antitrust law, China has not developed and likely will not develop a Western-style antitrust jurisprudence in the near future due to these local conditions. Finally, the Article explains how China developed a consensus on the need for a formal antitrust law despite local conditions that were not entirely compatible with such a law.

February 18, 2011 | Permalink | Comments (0) | TrackBack (0)

Has the European Commission Become More Severe in Punishing Cartles? Effects of the 2006 Guidelines

Posted by D. Daniel Sokol

John Connor (Purdue - Ag Econ) asks Has the European Commission Become More Severe in Punishing Cartles? Effects of the 2006 Guidelines.

ABSTRACT: This paper analyzes the first 13 cartel decisions of the European Commission under its 2006 revised fining guidelines. I find that the severity of the cartel fines is more than five times higher than those figured under the previous 1998 Guidelines. For the first time in antitrust history, I believe we are observing fines that regularly disgorge the monopoly profits accumulated by cartelists. Indeed, three firms’ fines ranged as high as 500% to 650% of affected sales – possible (but rare) examples of supra-deterrence.

Nearly all recent cartel decisions reward one or more participant with full or partial leniency, a much higher share than previously. There is no evidence that leniency discounts have led to larger percentage reductions in cartel-wide fines. Moreover, despite more severe fines, the share of defendants requiring reductions under the Commission’s 10% cap or ability-to-pay considerations has not risen.

The frequency and size of recidivism discounts has gone up markedly under the new guidelines. There is ample evidence that the Commission has been inconsistent in applying recidivism penalties in the manner promised it its 2006 Guidelines. In particular, it has been lenient by failing to account for numerous previous violations.

February 18, 2011 | Permalink | Comments (0) | TrackBack (0)

Thursday, February 17, 2011

Regulatory Barriers to Entry in Industrial Sectors

Posted by D. Daniel Sokol

Panayotis Kotsios, University of Macedonia has written on Regulatory Barriers to Entry in Industrial Sectors.

ABSTRACT: The entry of new competitors operates as a balancing force against high levels of industrial concentration and the abuse of dominant position by firms with large market shares. Entry increases supply, lowers prices, intensifies innovation and brings equilibrium to the markets that don’t operate in a socially desirable manner. This paper examines the impact of regulatory restrictions to the entry of new competitors in industrial sectors. It provides a short description of the 13 most important sources of regulatory barriers and assesses their role and importance as entry barriers. The conclusion is that regulatory restrictions can be a very important, almost insurmountable barrier to the entry of new competitors, but their role is not always socially harmful. The use of certain sources of regulatory barriers is effective in protecting social welfare instead of harming it. Barriers that promote new competition or are applied in order to protect consumer welfare are socially useful, while barriers that restrict competition and limit new competitor entry, in cases other than natural monopolies, are socially harmful.

February 17, 2011 | Permalink | Comments (0) | TrackBack (0)

Antitrust and Patent Law Analysis of Pharmaceutical Reverse Payment Settlements

Posted by D. Daniel Sokol

Herbert J. Hovenkamp, University of Iowa - College of Law provides Antitrust and Patent Law Analysis of Pharmaceutical Reverse Payment Settlements.

ABSTRACT: Patent settlements in which the patentee pays the alleged infringer to stay out of the market are largely a consequence of the Hatch-Waxman Act, which was designed to facilitate the entry of generic drugs by providing the first generic producer to challenge a pioneer drug patent with a 180 day period of exclusivity. This period can be extended by a settlement even if the generic is not producing, and in any event all subsequent generic firms are denied the 180 day exclusivity period, significantly reducing their incentive to enter.

The Circuit Courts of Appeal are split three ways over such settlements. The Sixth Circuit has declared them unlawful per se. The Second and Federal Circuits conclude they are legal, provided that the patent lawsuit was not a “sham” and the settlement does not reach beyond the scope of the patent. The Eleventh Circuit would apply a rule of reason. The FTC has consistently opposed these agreements as unlawful under FTC Act §5. The Antitrust Division has recently changed its position and now regards them as presumptively unlawful.

Reaching a reverse payment settlement is typically far more lucrative for a generic than defeating the patent in litigation. This fact substantially undermines the generic’s incentives to litigate infringement to a conclusion and makes it essential that post-settlement challenges be pursued by someone other than the generic firm.

Both the rules of virtual per se illegality and legality generally attempt to resolve antitrust challenges to these agreements without inquiring into patent validity or infringement. Rules of presumptive illegality rest on the premise that a very high payment itself is a strong indicator of patent invalidity. By contrast, antitrust’s rule of reason typically requires inquiry into validity and infringement. If the patent is valid and infringed, then even a large payment for the full remaining life of the patent represents a wealth transfer but causes consumer harm only if the payment increases the pioneer’s costs and thus may increase its drug price. At the other extreme, a patent that is invalid or not infringed should invite immediate generic entry, and the delay imposed by the reverse payment settlement represents competitive harm equivalent to that of any naked market division agreement. However, the costs attending a rule of reason inquiry makes it appropriate to consider alternatives that might be available within patent law, which this essay explores.

February 17, 2011 | Permalink | Comments (4) | TrackBack (0)

Pricing Dynamics in the Australian Airline Market

Posted by D. Daniel Sokol

Nicolas De Roos - University of Sydney, Gordon Mills - University of Sydney, and Stephen Whelan - University of Sydney address Pricing Dynamics in the Australian Airline Market.

ABSTRACT: We examine price dispersion in a large dataset of Australian domestic airfares. The airlines vary the lowest available fares on successive booking days by restricting the menu of available ticket types, and by changing the prices for some of those types. Our fixed-effects estimator allows us to characterise both of those mechanisms. The greatest price variation occurs on routes involving competition between the two main airlines, Qantas and Virgin; there is greater variation on monopoly routes than on routes pitting Virgin against the Qantas subsidiary, Jetstar. The lowest fares rise rapidly in the week before travel.

February 17, 2011 | Permalink | Comments (0) | TrackBack (0)

The Institutional Structure of Antitrust Enforcement

Posted by D. Daniel Sokol

Dan Crane (Michigan Law) has come out with The Institutional Structure of Antitrust Enforcement (Oxford University Press 2011).  I read a number of chapters in manuscript form.  This is a wonderful and insightful book and I urge everybody to buy a copy.  As someone who has written on institutional issues in antitrust recently myself, let me add that Dan's book makes some new and important contributions and is a sophisticated and yet easy to read page turner.

BOOK ABSTRACT: The Institutional Structure of Antitrust Enforcement , by Daniel A. Crane provides a comprehensive and succinct treatment of the history, structure, and behavior of the various U.S. institutions that enforce antitrust laws, such as the Department of Justice and the Federal Trade Commission. It addresses the relationship between corporate regulation and antitrust, the uniquely American approach of having two federal antitrust agencies, antitrust federalism, and the predominance of private enforcement over public enforcement. It also draws comparisons with the structure of institutional enforcement outside the United States in the European Union and in other parts of the world, and it considers the possibility of creating international antitrust institutions through the World Trade Organization or other treaty mechanisms. The book derives its topics from historical, economic, political, and theoretical perspectives.

Features 

  • Focuses on whether, and to what extent, antitrust enforcement should be administered primarily by problem-solving experts rather than generalist judges or juries
  • Considers debates about how intrusive antitrust authorities should be in regulating market economies
  • Provides a rigorous explanation and critique of antitrust's enforcement mechanisms to illuminate contemporary debates over contested topics
  • Provides historical context for current debates about antitrust institutions
  • Introduces antitrust institutions in the U.S., the European Union, and other jurisdictions

February 17, 2011 | Permalink | Comments (0) | TrackBack (0)

Farsighted Coalitional Stability of a Price Leadership Cartel

Posted by D. Daniel Sokol

Yoshio Kamijo (Waseda University) and Shigeo Muto (Tokyo Institute of Technology) describe Farsighted Coalitional Stability of a Price Leadership Cartel.

ABSTRACT: This paper analyzes the farsighted behaviour of firms that form a dominant price leadership cartel. We consider stability concepts such as the farsighted core, the farsighted stable sets, and the largest consistent set. We show that: (i) the farsighted core is either an empty set or a singleton set of the grand cartel; (ii) any Pareto efficient cartel is itself a farsighted stable set; and (iii) the set of cartels in which fringe firms enjoy higher profits than the firms in the minimal Pareto efficient cartel is the largest consistent set.

February 17, 2011 | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 16, 2011

Best Prices

Posted by D. Daniel Sokol

Judith A. Chevalier and Anil K. Kashyap (both U. Chicago Booth School of Business) have an interesting new paper on Best Prices.

ABSTRACT: We explore the role of strategic price-discrimination by retailers for price determination and inflation dynamics. We model two types of customers, "loyals" who buy only one brand and do not strategically time purchases, and "shoppers" who seek out low-priced products both across brands and across time. Shoppers always pay the lowest price available, the "best price. Retailers in this setting optimally choose long periods of constant regular prices punctuated by frequent temporary sales. Supermarket scanner data confirm the model's predictions: the average price paid is closely approximated by a weighted average of the fixed weight average list price and the "best price". In contrast to standard menu cost models, our model implies that sales are an essential part of the price plan and the number and frequency of sales may be an important mechanism for adjustment to shocks. We conclude that our "best price" construct provides a tractable input for constructing price series.

February 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Intellectual Property Rights and Their Interface with Competition Policy: In Balance or in Conflict?

Posted by D. Daniel Sokol

Singh Sumanjeet, University of Delhi asks Intellectual Property Rights and Their Interface with Competition Policy: In Balance or in Conflict?

ABSTRACT: Intellectual property rights create monopolies, while competition law battles monopolies. How do the two polices interact? Is there a balance or conflict? In this light, the present paper examined the survey of economic literature analyzing the interaction between intellectual property rights laws and competition policy and how the boundary between these two polices is drawn in practice. Further, paper examines the experience of a number of countries in grappling with the problems of reconciling the two fields of competition policy and intellectual property rights. The paper concludes that possible friction between IPRs and competition laws can be reduced if competition agencies are constrained, either by statutes or administrative policy from seeking to fine tune IPR protection. The paper has been divided into four sections. Section 1 deals with the rationality of protecting intellectual property rights. Section 2 explores the debate of conflict between the objectives of intellectual property rights and competition policy. In section 3, an attempt has been made to study the interface between intellectual property rights and competition policy and draw the attention to a number of specific issues which has arisen in the recent years. In section 4 concluding remarks are given.

February 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Does Antitrust Enforcement in High Tech Markets Benefit Consumers? Stock Price Evidence from FTC v. Intel

Posted by D. Daniel Sokol

Josh Wright (George Mason Law) has posted Does Antitrust Enforcement in High Tech Markets Benefit Consumers? Stock Price Evidence from FTC v. Intel.

ABSTRACT: Antitrust enforcement efforts in the United States and abroad have been ramped up in high-tech industries, rekindling stale and largely unresolved debates concerning the appropriate role of antitrust enforcement in high-tech markets. Like the previous enforcement actions against Microsoft, and likely enforcement efforts in the future against similarly situated business firms, recent enforcement efforts challenging Intel's business practices raise the same fundamental issues concerning the effectiveness of competition policy in dynamically competitive industries. While opinions and broad-sweeping assertions as to the appropriate role of antitrust in these markets are common, traditional empirical approaches have left fundamental issues unresolved. The enforcement actions against Intel, for example, have resulted in the assessment of over $3 billion in fines and consigned authority to the Federal Trade Commission to impose a variety of restrictions on Intel’s pricing practices, distribution arrangements, and product design choices. But what do we know about the likely effects of these enforcement actions on consumers? Empirical evaluation of business practices in high tech-markets is incredibly complex partly because these cases involve conduct that can theoretically prove either pro-competitive or anti-competitive, because regulators must act or forbear in light of "false positives" which can chill innovation, and because distinguishing pro-competitive from anti-competitive conduct in a technologically advanced setting is particularly difficult. This paper evaluates the likely competitive effects of Intel’s conduct through two approaches. The conventional approach focuses on traditional antitrust metrics in product markets: prices and output. The second, alternative approach involves turning to financial markets for valuable information. Competing antitrust economic theories can be tested against the collective wisdom of the market. In the case of Intel, where the disputed conduct in this case has been in the marketplace for nearly a decade and its competitive footprint is likely to be readily observable, this approach is especially attractive. Under either approach, the available data do not support the theory that Intel’s behavior harmed consumers.

February 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Federal Trade Commission Bureau of Economics Seminar Series Spring 2011

Posted by D. Daniel Sokol

Schedule of Speakers
Federal Trade Commission
Bureau of Economics Series
Spring 2011

Date

Speaker/Affliliation/Paper

Mar 3 Henry Schneider (Cornell)
Mar 10 Joel Waldfogel (Minnesota)
Bye, Bye, Miss American Pie? The Supply of New Recorded Music since Napster
Seminar will be held in 1800 M Street Building, Room 8089
Mar 17 Zahi Ben-David (Ohio State)
Do Financial Counseling Mandates Improve Mortgage Choice and Performance? Evidence from a Legislative Experiment
Mar 24 Allen Blackman (RFF)
Mar 31 Rachel Croson (NSF)
Seminar will be held in 1800 M Street Building, Room 8089
Apr 7 Emir Kamenica (Chicago)
Apr 14 Liran Einav (Stanford)
Apr 21 Brian Melzer (Northwestern)
Mortgage Debt Overhang: Reduced Investment by Homeowners with Negative Equity
May 5 Przemek Jeziorski (JHU)
May 12 Bob Hunt (Philadelphia Fed)
Seminar will be held in 1800 M Street Building, Room 8089

Unless otherwise noted, all seminars will take place on Thursdays at 2:30pm in the ground floor Conference Center located at 601 New Jersey Ave. NW.  No prior security clearance is necessary except for the seminars held in room 4100. Address inquiries to Loren Smith (lsmith2@ftc.gov) or Tammy John (tjohn@ftc.gov).

For seminars held in the 1800 M street building, proceed directly from the lobby of the building to the 8th floor. Security clearance is required upon arrival at the 8th floor.  Seminars in the 1800 M street building begin at 2:30pm unless otherwise noted.

February 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Entry, Exit, and the Endogenous Market Structure in Technologically Turbulent Industries

Posted by D. Daniel Sokol

Myong-Hun Chang, Cleveland State University - Economics has posted Entry, Exit, and the Endogenous Market Structure in Technologically Turbulent Industries.

ABSTRACT: Empirical studies have found high correlation between entry and exit across industries, indicating that industries differ substantially in their degree of firm turnover. I propose a computational model of dynamic oligopoly with entry and exit in a turbulent technological environment. I examine how industry-specific factors give rise to across-industries differences in turnover. An analysis of the endogenous relationships between firm turnover, industry concentration, and the performance variables shows: (1) the rate of turnover and industry concentration are positively related; (2) industry concentration and market price are positively related; (3) no general relationship exists between industry concentration and price-cost margin.

February 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 15, 2011

The Price Effect of Eliminating Potential Competition: Evidence from an Airline Merger

Posted by D. Daniel Sokol

John E. Kwoka, Northeastern University - Department of Economics and Evgenia Shumilkina, Northeastern University discuss The Price Effect of Eliminating Potential Competition: Evidence from an Airline Merger.

ABSTRACT: This paper analyzes the gain in pricing power that a firm achieves by merging with a potential competitor in its market. Using pricing data for the merger of USAir and Piedmont, empirical analysis finds that prices rose by 5.0 to 6.0 per cent on routes that one carrier served and the other was a potential entrant. This was more than half the increase on routes where the two carriers had been direct competitors. Other important factors included carrier size, market concentration, incumbent's identity and the potential entrant's presence at one or both endpoints.

February 15, 2011 | Permalink | Comments (0) | TrackBack (0)

Licensing a Vertical Product Innovation

Posted by D. Daniel Sokol

Changying Li, University of Colorado at Boulder - Department of Economics and Junmei Wang explore Licensing a Vertical Product Innovation.

ABSTRACT: This paper studies the case where an outside patent holder licenses its vertical product innovation to two Cournot competitors. It is found that, under a fixed-fee contract, the patent holder prefers exclusive licensing. However, under a royalty or two-part tariff contract, the patent holder favours non-exclusive licensing. Moreover, in contrast to the standard argument by Kamien and Tauman, we show that, from the perspective of the patentee, royalty licensing can be superior to fixed-fee licensing, if the degree of innovation is small. Two-part tariff licensing generates a monopoly outcome in the final market and hence reduces both consumer surplus and social welfare, if the innovation is low.

February 15, 2011 | Permalink | Comments (0) | TrackBack (0)

How is the Mobile Internet Different? Search Costs and Local Activities

Posted by D. Daniel Sokol

Anindya Ghose, New York University - Leonard N. Stern School of Business, Avi Goldfarb, University of Toronto - Joseph L. Rotman School of Management, and Sang Pil Han, New York University (NYU) - Leonard N. Stern School of Business address How is the Mobile Internet Different? Search Costs and Local Activities.

ABSTRACT: We explore how Internet browsing behavior varies between mobile devices and personal computers. Smaller screen sizes on mobile devices increase the cost to the user of reading information. In addition, a wider range of offline locations for mobile Internet usage suggests that geographically local activities can be particularly important. Using data on user behavior at a microblogging service (similar to Twitter), we exploit randomization in the ranking mechanism for the microblog posting feeds as a natural experiment to identify user search costs. We estimate a hierarchical Bayesian framework to better control for heterogeneity and show: (1) Search costs are higher on mobile devices: While links that appear at the top of the screen are always more likely to be clicked, this effect is much stronger on mobile devices; (2) The benefit of searching for geographically close matches is higher on mobile devices: Stores located in close proximity to a user are much more likely to be clicked on mobile devices. In this way, the mobile Internet is somewhat less “Internet-like”: search costs are higher and distance matters more. We speculate on how these changes may affect the future direction of Internet commerce.

February 15, 2011 | Permalink | Comments (1) | TrackBack (0)

DOJ Economic Analysis Group (EAG) Spring 2011 Seminar Series

Posted by D. Daniel Sokol

Economics Seminars

The Economic Analysis Group (EAG) presents a seminar series to advance recent economic analyses in the fields of industrial organization, antitrust, and applied microeconomics. Schedules are organized in the spring and fall.

Location: Seminars take place in the Liberty Square Building at 450 Fifth Street NW. The closest Metro stop is Gallery Place/Chinatown.
Time: Seminars take place 2:00 to 3:30 p.m. on Tuesdays unless otherwise noted.
Attendance: Seminars are free and open to the public, but prior arrangements must be made in order to pass through building security.
Contact: For more information or to arrange attendance, contact Thomas Jeitschko at 202-532-4826 or send e-mail to atr.eag@usdoj.gov or Thomas.Jeitschko@usdoj.gov.
Date Speaker Topic
March 8 David Ridley
Duke, Bus.
"Pricing Strategy under Inflation Constraints"
March 15 Ginger Jin
UMD, Econ.
"The imperfection of human inspectors: lessons from Florida restaurant inspections" (with Jungmin Lee, Sogang University & IZA)
March 22 Tracy Lewis
Duke, Bus.
"Default Rights & Efficient Long Term Contracts with Private Information"
March 29

Bob Marshall
Penn State

“Coordinated Effects in the 2010 Horizontal Merger Guidelines,” (with Wayne-Roy Gayle, Leslie Marx and Jean-Francois Richard)
April 5 Sergei Koulayev
Boston College
"Explaining adoption and use of payment instruments by US consumers"
April 13
Wednesday
Neil Gandal
Tel-Aviv University
"Ain't it "Suite?" Bundling in the PC Office Software Market"
(with Sarit Markovich and Michael Riordan)
April 19 Albert Ma
Boston University
"Public Report, Price, and Quality"
April 26 Pete Kyle
UMD, Fin.
"Reforming the OTC Derivatives Market"
May 3
Jeremy Verlinda
EAG
"Flexible Estimation in the Presence of Interval Regressors"
May 17 Mara Lederman
Toronto, Econ.
"Do Firms Game Quality Ratings? Evidence from the Mandatory Disclosure of Airline On-Time Performance"
May 24 Sean Chu
FRB
"A Dynamic Model of Mortgage Default and Prepayment,"
(with Pat Bajari, Denis Nekipelov and Minjung Park)
May 31 Eric Emch
EAG
"What is the full impact of entry? Measuring incumbent price responses to actual and potential LCC entry in airline markets"
June 8
Wednesday
Lars-Hendrik Röller
President of ESMT and former Chief Competition Economist of the European Commission
"Challenges in EU Competition Policy"

February 15, 2011 | Permalink | Comments (0) | TrackBack (0)

Regulating Cartels in Europe (2nd Edition)

Posted by D. Daniel Sokol

Christopher Harding (Department of Law and Criminology at the University of Wales) and Julian Joshua (Howrey) have published Regulating Cartels in Europe (2nd Edition) with Oxford University Press.

BOOK ABSTRACT: One of the most contentious and high-profile aspects of EU competition law and policy has been the regulation of those serious competition or antitrust violations now often referred to as 'hard core cartels'. Such cartel activity typically involves large and powerful corporate producers and traders operating across Europe and beyond, and comprise practices such as price fixing, bid rigging, market sharing, and limiting production in order to ensure 'market stability' and maintain and increase profits. There is little disagreement now, in terms of competition theory and policy at both international and national levels, regarding the damaging effect of such trading practices on public and consumer interests, and such cartels have been subject to increasing condemnation in the legal process of regulating and protecting competition.

Regulating Cartels in Europe provides critical evaluation of the way in which European-level regulation has evolved to deal with the activities of such anti-competitive business cartels. They trace the historical development of cartel regulation in Europe, comparing the more pragmatic and empirical approached favored in Europe with the more dogmatic and uncompromising American policy on cartels. In particular, the work considers critically the move towards the use of fully fledged criminal proceedings in this area of legal control, examining evolving aspects of enforcement policy such as the use of leniency programs and the deployment of a range of criminal law and other sanctions.

This new edition of the work covers emerging themes and arguments in the discipline, including the judicial review of decisions against cartels, the criminological and legal basis of the criminalization of cartel conduct, and the range and effectiveness of sanctions used in response to cartel activity.

Features

  • Provides an interdisciplinary approach combining legal, economic, and criminological analysis
  • Includes comparative analysis of European and US strategies for dealing with cartels
  • With an author team both academic and practitioner, it provides unique insights into the official investigation of cartels
  • Provides an extended discussion of new topics such as the judicial review of decisions against cartels, definition and evidence of cartel activity, the significance and operation of leniency programs, the criminological and legal basis of the criminalization of cartel conduct, the role of individual and corporate actors, and the range of sanctions which may be used to respond to cartel activity and the effectiveness of such sanctions

Table of Contents

Introduction and Overview: Talking About Cartels - The Main Elements of Analysis and Discussion 1. Business Cartels: Sleeping With The Enemy 2. Models of Legal Control: North America and Europe 3. Cartels In Europe, 1870-1945: Das Kartellproblem 4. Cartels in Europe, 1945-1970: From Registrable Agreement to Concerted Practice 5. A Narrative of Cartel Enforcement in Europe, 1970 to the Present Time 6. Proof of Cartel Delinquency: Fashioning the European Cartel Offence 7. The Judicial Review of Cartel Control: Testing the Evidence and Due Process 8. Negotiating Guilt: Leniency and Breaking the Code of Silence 9. The Pathology of Cartels: Addressing Issues of Agency and Responsibility 10. Sanctions: A Complex European and International Grid 11. Corporate and Individual Sanctions 12. The Shape of Things to Come: Cartel Law in the Twenty-first Century Bibliography 

Table of Contents

Introduction and Overview: Talking About Cartels - The Main Elements of Analysis and Discussion
1. Business Cartels: Sleeping With The Enemy
2. Models of Legal Control: North America and Europe
3. Cartels In Europe, 1870-1945: Das Kartellproblem
4. Cartels in Europe, 1945-1970: From Registrable Agreement to Concerted Practice
5. A Narrative of Cartel Enforcement in Europe, 1970 to the Present Time
6. Proof of Cartel Delinquency: Fashioning the European Cartel Offence
7. The Judicial Review of Cartel Control: Testing the Evidence and Due Process
8. Negotiating Guilt: Leniency and Breaking the Code of Silence
9. The Pathology of Cartels: Addressing Issues of Agency and Responsibility
10. Sanctions: A Complex European and International Grid
11. Corporate and Individual Sanctions
12. The Shape of Things to Come: Cartel Law in the Twenty-first Century
Bibliography

February 15, 2011 | Permalink | Comments (0) | TrackBack (0)

Incentives to Innovate in Oligopolies

Posted by D. Daniel Sokol

Paul Belleflamme, CORE and IAG, UCL (Université Catholique de Louvain), CESifo (Center for Economic Studies and Ifo Institute for Economic Research) and Cecilia Vergari, University of Bologna - Department of Economics explore Incentives to Innovate in Oligopolies.

ABSTRACT: In the spirit of Arrow (The Rate and Direction of Inventive Activity, Princeton, NJ, Princeton University Press, 1962), we examine, in an oligopoly model with horizontally differentiated products, how much a firm is willing to pay for a process innovation that it would be the only one to use. We show that different measures of competition (number of firms, degree of product differentiation, Cournot vs. Bertrand) affect incentives to innovate in non-monotonic, different and potentially opposite ways.

 

February 15, 2011 | Permalink | Comments (0) | TrackBack (0)

Monday, February 14, 2011

Cartelising Groups in Dynamic Hyperbolic Oligopoly with Antitrust Threshold

Posted by D. Daniel Sokol

Akio Matsumoto, Chuo University, Ugo Merlone, University of Turin - Department of Statistics and Applied Mathematics, and Ferenc Szidarovszky, University of Arizona - Department of Systems & Industrial Engineering (SIE), explore Cartelising Groups in Dynamic Hyperbolic Oligopoly with Antitrust Threshold.

ABSTRACT: Empirical evidence, and theoretical results have shown that, in an industry, higher concentration index indicates higher price-cost margin. In order to detect collusive behaviour the antitrust authorities often monitor the Herfindahl-Hirschman Index. We consider N-firm oligopolies where a group of firms partially cooperate with each other, and monitor the Herfindahl-Hirschman Index as well. After suspecting that the authorities might notice the violation of antitrust regulations, they stop their cooperation. The group will not cooperate again until the Index moves back to the legal domain. This flip-flop dynamical model is formulated, the equilibria are determined, and the asymptotic properties of the system are examined.

February 14, 2011 | Permalink | Comments (0) | TrackBack (0)