Antitrust & Competition Policy Blog

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

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Monday, April 2, 2012

Dynamic Equilibrium Bunching

Posted by D. Daniel Sokol

Tao Wang (Queen's University) discusses Dynamic Equilibrium Bunching.

ABSTRACT: In this paper, we analyze the asymmetric pure strategy equilibria in a dynamic game of pure information externality. Each player receives a private signal and chooses whether and when to invest. In some of the periods, only a subgroup of the players make decisions, which we call bunching, while the rest of the players do not invest regardless of their signals. Bunching is different from herding; it occurs in the first period and recursively until herding takes place or the game runs out of undecided players. We find that any asymmetric pure strategy equilibrium is more efficient than the symmetric mixed strategy equilibrium. When players become patient enough, herding of investment disappears in the most efficient asymmetric pure strategy equilibrium, while the least efficient asymmetric pure strategy equilibrium resembles those in a fixed timing model, producing an exact match when the discount factor is equal to 1. Bun! ch sizes are shown to be independent of the total number of players; adding more players to the game need not change early players' behavior. All these are unique properties of the asymmetric pure strategy equilibria. We also show that the asymmetric pure strategy equilibria can accommodate small heterogeneities of the players in costs of acquiring signals, discount factors, or degree of risk aversion. In any of these environments, there exists a unique welfare maximizing equilibrium which provides a natural way for the players to coordinate.

April 2, 2012 | Permalink | Comments (0) | TrackBack (0)

2012 FTC Year in Review

Posted by D. Daniel Sokol

Federal Trade Commission Chairman Jon Leibowitz released the agency’s 2012 Annual Highlights (see here for video) at the spring meeting of the American Bar Association’s Section of Antitrust Law in Washington, DC.

The Highlights call to attention the FTC’s work in 10 broad categories, including:

 

  • Protecting Consumer Privacy: The FTC continues to raise the profile of privacy practices – online and off - through law enforcement, consumer education, and policy initiatives.
  • Fighting ‘Last Dollar’ Fraud: The FTC is stopping scammers who take advantage of the nation’s most financially fragile consumers through deceptive mortgage servicing practices, abusive debt collection tactics, bogus credit repair services, sham mortgage, tax, and debt relief offers, and fraudulent job and business opportunity schemes.
  • Promoting Competition in Health Care and Containing Costs of Prescription Drugs: The Commission works to prevent anticompetitive conduct and mergers involving the health care sector, from hospitals to pharmaceutical companies. One of the FTC’s top priorities continues to be restricting anticompetitive “pay-for-delay” patent settlements.
  • Trending in Technology: Nearly 100 years of experience gives the FTC a unique perspective when it comes to anticipating and evaluating new technology, and using appropriate measures of enforcement, education, and public engagement to address evolving markets and business models.

April 2, 2012 | Permalink | Comments (0) | TrackBack (0)

Competitive Neutrality in Public Procurement and Competition Policy: An Ongoing Challenge Analised in View of the Proposed New Directive

Posted by D. Daniel Sokol

Albert Sanchez Graells, Comillas Pontifical University has written on Competitive Neutrality in Public Procurement and Competition Policy: An Ongoing Challenge Analised in View of the Proposed New Directive.

ABSTRACT: The relevance of effective competition in the public procurement setting can hardly be overstated, particularly in terms of value for money and system efficiency. However, the assessment of competition impacts (or distortions) derived from procurement still does not always rank on top of public buyers’ priorities and concerns. Hence, advancing techniques and developing regulatory instruments for more competitively neutral tender design and procurement regulation reform deserves academic and policy-making attention.

This paper focuses on pro-competitive developments of EU public procurement law, particularly as a result of the 2011 EU Commission’s consultation on the modernisation of EU public procurement policy and the ensuing proposal for a revised and updated version of the (growing) family of EU public procurement Directives. In the conclusions, the paper critically appraises the main aspects of the proposed reform of EU procurement rules aimed at guaranteeing increased competitive neutrality.

April 2, 2012 | Permalink | Comments (0) | TrackBack (0)

Sunday, April 1, 2012

Best Passover Music Videos Antitrust Edition

Posted by D. Daniel Sokol

The elder Sokol girls (the baby was asleep) picked their favorite Passover music videos.

Firt Place

20 Things To Do With Matzah.

Second Place

Best Seder in the USA (The Passover Song)

Third Place

Matzo Man

Runner Up

Dayenu, Coming Home - The Fountainheads Passover Song

Mom and Dad's Favorite

Passover Rhapsody

For previous holiday picks by the Sokol girls:

Rosh Hashana

Chanukah

Purim

Shabbat

April 1, 2012 | Permalink | Comments (0) | TrackBack (0)

Antitrust Risk in NY Pizza - Predation or Just a Cheap Slice?

Posted by D. Daniel Sokol

There is a NY Times article today about pizza price wars. My favorite article excerpt:

For his part, Eli Halali made it clear that 75 cents was a temporary price point. He said he could not make money at that level and eventually would return to $1. He said that if Bombay/6 Ave. Pizza went back to $1, he would as well.

If it didn’t, he said, it better watch out.

His father, Joshua Halali, who acts as a consultant to 2 Bros., said, “I suggested to my children to go to 50 cents.”

Oren Halali said, “We might go to free pizza soon.”

Eli said: “We have enough power to wait them out. They’re not going to make a fool of us.”

April 1, 2012 | Permalink | Comments (0) | TrackBack (0)