Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Sunday, February 22, 2015

Regulation, Antitrust and Promotion of Innovation? Challenges and experiences from communications to payment systems

Organised The Jevons Institute for Competition Law & Economics
 
Thursday 12 March 2015, 6pm-7.30pm
Followed by a drinks reception
         
 
with David Evans (Global Economics Group / UCL) Steve Unger (Ofcom) Andrea Coscelli (CMA) Hannah Nixon (Payment System Regulators) John Fingleton (Fingleton Associates)
 
Chaired by Antonio Bavasso (UCL / Allen & Overy LLP)
 
This panel discussion with some of the leading experts and regulators in this this area will explore the theme of innovation in regulatory regimes and competition enforcement in sectors that are affected by a range of new business models. The panel will discuss the international experience and compares lessons learned across different sectors from communications to payments. It will considers the possible benefits and harms posed by different types of innovation (unilateral, collaborative, "permissionless" innovation) and the challenges that regulators, market players and their advisers face in this area.
 
This event is accredited with 1.5 CPD hours from the SRA and BSB. 
 

February 22, 2015 | Permalink | Comments (0) | TrackBack (0)

Friday, February 20, 2015

The Parent-Subsidiary Relationship in EU Antitrust Law and the AEG Telefunken Presumption: Between the Effectiveness of Competition Law and the Protection of Fundamental Rights

Lorenzo Federico Pace, Università degli Studi del Molise - Facolta di Economia discusses The Parent-Subsidiary Relationship in EU Antitrust Law and the AEG Telefunken Presumption: Between the Effectiveness of Competition Law and the Protection of Fundamental Rights.

ABSTRACT: This paper discusses how the protection of fundamental rights has become an issue in European Antitrust Law especially with reference to the parent-subsidiary relationship and the so-called AEG Telefunken presumption.

February 20, 2015 | Permalink | Comments (0) | TrackBack (0)

Optimal Deterrence of Illegal Behavior Under Imperfect Corporate Governance

Cedric Argenton, Tilburg Law and Economics Center (TILEC); Tilburg University - Center and Faculty of Economics and Business Administration and Eric Van Damme, TILEC and CentER, Tilburg University have an interesting paper on Optimal Deterrence of Illegal Behavior Under Imperfect Corporate Governance.

ABSTRACT: We study the optimal design of liability schemes (at the corporate or individual level) when the objective is to deter socially harmful corporate behavior without discouraging productivity enhancements. We assume that firms face agency problems between shareholders and managers (moral hazard) and that unlimited sanctions on individuals are not available. We show that pure corporate liability rules can induce the first-best outcome only if firms can condition compensation on detection and the enforcement system is good enough. In other circumstances, unless individual sanctions can be very high, optimal mechanisms typically impose both corporate and individual liability.

February 20, 2015 | Permalink | Comments (0) | TrackBack (0)

Nowhere to Hide? Extradition in Antitrust Cases from a European Perspective

Markus Rohrig, Hengeler Mueller asks Nowhere to Hide? Extradition in Antitrust Cases from a European Perspective.

ABSTRACT: Earlier this year, Germany surrendered Romano Pisciotti, an Italian citizen charged with price fixing and bid rigging in the marine hose cartel, to the US Government. This is the first time the USA secured the extradition of a foreign individual on antitrust charges. This article explores the implications of the Pisciotti case on antitrust practitioners counselling clients in international cartel cases. It also highlights important implications for antitrust policy makers in Europe, especially, when considering the introduction of criminal sanctions—a hotly contested battleground in antitrust policy making today.

February 20, 2015 | Permalink | Comments (0) | TrackBack (0)

Thursday, February 19, 2015

Postal Services: Survey of Competition Law Developments (2014)

Richard Eccles, Bird & Bird LLP offers Postal Services: Survey of Competition Law Developments (2014).

ABSTRACT: The European Commission has published a detailed summary of its prohibition of the intended merger of United Parcel Service Inc. and TNT Express, based on the finding that the acquisition would significantly impede effective competition in various national markets in the EEA for international intra-EEA express delivery services for small packages. The Court of Justice of the EU has issued a judgment rejecting France's appeal against the European General Court's judgment upholding the European Commission's decision finding that French law involved an unlimited State guarantee of the operations of LaPoste. Important competition law investigations are being conducted by the national competition authority in France and Germany and by the national regulatory authority in the UK, and further important competition regulatory investigations are under way in Germany, in the postal services sector.

February 19, 2015 | Permalink | Comments (0) | TrackBack (0)

Back to the top and updated: New World Bank/OECD Research Project - call for Papers: Promoting Effective Competition Policies for Shared Prosperity and Inclusive Growth February February 18-March 25, 2015

See here.

Call for Papers: Promoting Effective Competition Policies for Shared Prosperity and Inclusive Growth

February 18-March 25, 2015

 

Worldwide

As part of the Global Engagements Initiatives of the World Bank Group's Trade and Competitiveness Global Practice, the World Bank Group, in partnership with the Organisation for Economic Co-operation and Development (OECD), is pleased to announce the creation of the Global Expert Network on Competition Policy, Shared Prosperity and Inclusive Growth. The network's inaugural conference, which will be held at the World Bank Group headquarters in Washington D.C. in June 2015, invites submissions of research papers from policy makers, practitioners, academics, and researchers on the theme of promoting effective competition policies for shared prosperity and inclusive growth.
 
 
 
 
Process Overview
  • Deadline for abstracts:  March 25, 2015
  • Abstract length:  500 words maximum
  • Abstracts selected by:  April 1, 2015
  • Deadline for Completed Papers:  April 24, 2015
  • Final papers selected by:  May 22, 2015
  • CONTACT:Martha Martinez Licetti            mlicetti@worldbank.org
ABOUT THE SUBMISSIONS

The ability of firms to contest and freely compete in product markets is acknowledged to be an important factor in the effective functioning of markets. Existing evidence suggests that a lack of competition in the market limits access to the benefits of growth for poor and vulnerable groups. However, the literature in this area remains in its infancy and there are a number of topics deserving further research.

Applicants are therefore encouraged to make submissions of research papers which will contribute to the body of knowledge on this topic. Initial submissions will be in the form of an extended abstract. Final submissions will then be reviewed by a committee of experts in the field of competition policy, competition law and industrial organization.

Authors of selected papers will become members of the GlobalExpert Network on Competition Policy and Shared Prosperity. The selected papers (in the form of either completed papers, where available, or a detailed research proposal with initial results) will be presented at the Inaugural International Conference of the World Bank Group-OECD Global Expert Network on Competition Policy to be held in June 2015. The papers will be featured in a joint World Bank Group-OECD publication.

This call for papers invites proposals from policy-makers, practitioners, academics and researchers on topics relevant to the conference theme of promoting effective competition policies for shared prosperity and inclusive growth (i.e. linking economic growth, reduced inequality and poverty reduction). Papers may consider issues at the international, national, sub-national and institutional level.

Several topics could potentially be analyzed that may provide evidence of the importance of competition policy for shared prosperity, including:

  • Effects of competition policy and pro-competition regulatory changes:
    • Empirical analysis of the effect of pro-competition reforms on variables such as employment, entrepreneurship and wage-distribution, across households with differing socio-economic characteristics or across firms of different size (small- and medium-sized enterprises as compared to larger firms).
    • Empirical assessment of the effects of discriminatory policies and rules favorable towards incumbents on key economic variables.
    • Empirical assessment of the effects of institutional design of public bodies that promote and protect competition policy on market outcomes.
    • The impact of enhanced competition law enforcement action and better competition legal frameworks on improving consumer welfare and increasing shared prosperity and inclusive growth.
  • Evaluation of effects of (lack of) competition, as measured by other variables or policy changes:
    • Methodologically rigorous estimation of cartel overcharges and their impact on welfare distribution across society as a whole, with a focus on consumers.
    • Effects of changes in the level of market contestability in terms of savings for consumers and businesses, shared prosperity and inclusive growth.
    • General equilibrium analysis of the effect of higher prices resulting from lack of competition on poverty, incorporating the second-order effects of market power on employment and factor incomes.
    • Empirical testing of whether the economic and social outcomes of non-competitive markets predicted by theoretical models hold for different sectors in low and middle income countries.
    • Assessment of the relationship between greater trade openness and the degree of competition in domestic markets in their effects on distributional outcomes of trade and competition policies.
    • Assessment of the impact of competition distortions in input markets on shared prosperity and inclusive growth.
    • Impact evaluation of regulations and policies that affect market competition.

Where possible, submissions are encouraged to identify specific channels of impact on the bottom 40 percent of the income distribution, including:

  • The impact on the bottom 40 percent of the income distribution as consumers – For example, using various measures of consumer welfare.
  • The impact on the bottom 40 percent of the income distribution as producers – For example, using measures such as income, entry and growth of MSMEs, productivity and innovation.
  • The impact on the bottom 40 percent of the income distribution as employees – For example, using measures such as employment, wages and wage inequality (for example across skill level, gender, sector, etc.).
 
SUBMITTING A PROPOSAL

The following must be submitted to Martha Martínez Licetti (mlicetti@worldbank.org):

  • An abstract of maximum 500 words by 25 March 2015
    • Proposals should be accompanied by a short biography of maximum 500 words.
    • Abstracts and papers must be submitted in English.
    • Authors will receive notification of acceptance of their abstracts by 1 April 2015.
  • Completed papers, where available, or otherwise, a detailed research proposal with preliminary results must be submitted by 24 April 2015. The submissions may receive comments with an option to revise and resubmit by 15 May 2015.
    • Final acceptances will be notified by 22 May 2015.
    • Accepted papers will be presented at the Inaugural International Conference of the World Bank Group-OECD GlobalExpert Network on Competition Policy, Shared Prosperity and Inclusive Growth to be held in Washington, D.C. in June 2015.
  • All final papers should be submitted by 1 September 2015 for inclusion in a World Bank Group-OECD publication.

Queries should be directed to Martha Martínez Licetti mlicetti@worldbank.org (World Bank Group) or Ania Thiemann (OECD) ania.thiemann@oecd.org.

February 19, 2015 | Permalink | Comments (0) | TrackBack (0)

Beer Snobs do Exist: Estimation of Beer Demand by Type

Daniel Toro-Gonzalez (Universidad Tecnologica de Bolivar), Jill J. McCluskey (Washington State) and Ron C. Mittelhammer (Washington State) explain that Beer Snobs do Exist: Estimation of Beer Demand by Type.

ABSTRACT: Although mass-produced beers still represent the vast majority of U.S. beer sales, there has been a significant growth trend in the craft beer segment. This study analyzes the demand for beer as a differentiated product and estimates own-price, cross-price and income elasticities for beer by type: craft beer, mass-produced beer, and imported beer. We verify that beer is a normal good with a considerably inelastic demand and also find that the cross price elasticity across types of beer is close to zero. The results suggest that there are effectively separate markets for beer by type.  

February 19, 2015 | Permalink | Comments (0) | TrackBack (0)

DOj/FTC Workshop: Examining Health Care Competition February 24–25, 2015

Examining Health Care Competition

Workshop Information

The Antitrust Division of the Department of Justice (DOJ) and the Federal Trade Commission (FTC) will hold the second in a series of public workshops, “Examining Health Care Competition,” February 24–25, 2015, to study recent developments related to health care provider organization and payment models that may affect competition in the provision of health care services.

The FTC held the first workshop in this series on March 20–21, 2014. Find information about that workshop on the FTC’s website.

Specific topics for discussion during this second workshop may include:

  • Early observations of accountable care organizations
  • Alternatives to traditional fee-for-service payment models
  • Trends in provider consolidation
  • Trends in provider network and benefit design strategies, as well as contracting practices and regulatory activity that may enhance or undermine these strategies
  • Early observations of health insurance exchanges

This page provides information on:

For more information, please send e-mail to examininghealthcareworkshop@ftc.gov or contact:

          Patrick Kuhlmann           Attorney           (202-305-4639)
          Matthew Mandelberg           Attorney           (202-598-2413)
 

They can be reached by mail at:

Legal Policy Section           Antitrust Division           U.S. Department of Justice           450 Fifth Street NW, Suite 11700           Washington, DC 20530

Press release: Department of Justice and Federal Trade Commission Announce Agenda for Public Workshop on Examining U.S. Health Care Competition (February 18, 2015)

Press release: Department of Justice and Federal Trade Commission to Hold Public Workshop on Examining U.S. Health Care Competition (January 23, 2015)


Dates and Location

Dates: Tuesday, February 24, and               Wednesday, February 25, 2015
Location: Federal Trade Commission               (Ground Floor) Conference Center               Constitution Center               400 Seventh Street SW               Washington, DC 20024

          


Workshop Agenda

 

              

Tuesday, February 24, 2015

9:00 a.m.

Registration and Continental Breakfast

10:00 a.m.

Welcome Remarks and Announcements

Tara Isa Koslov, Deputy Director, Office of Policy Planning, Federal Trade Commission

10:10 a.m.

Opening Remarks

Edith Ramirez, Chairwoman, Federal Trade Commission

10:30 a.m.

Framing Presentation

Ezekiel J. Emanuel, MD, PhD, Chair, Department of Medical Ethics and Health Policy, Perelman School of Medicine, University of Pennsylvania

11:00–11:10 a.m.

Break

11:10 a.m.– 1:00 p.m.

Provider Network Design, Contracting Practices, and Regulatory Activity

Moderators

Helen C. Knudsen, PhD, Economist, U.S. Department of Justice, Antitrust Division, Economic Analysis Group

Stephanie A. Wilkinson, Attorney Advisor, FTC, Office of Policy Planning

Panelists

Paul Ginsburg, PhD, Norman Topping Chair in Medicine and Public Policy, University of Southern California

Kim Holland, Vice President, State Affairs, Blue Cross Blue Shield Association

James Landman, JD, PhD, Director, Healthcare Finance Policy, Perspectives and Analysis, Healthcare Financial Management Association

Lynn Quincy, Director of the Health Value Resource Hub, Consumers Union

Fiona M. Scott Morton, PhD, Theodore Nierenberg Professor of Economics, Yale University School of Management

Anna D. Sinaiko, PhD, MPP, Research Scientist, Department of Health Policy and Management, Harvard T.H. Chan School of Public Health

1:00–2:30 p.m.

Lunch Break (on your own)

2:30–4:30 p.m.

Early Observations Regarding Health Insurance Exchanges

Moderators

Peter J. Mucchetti, Chief, DOJ, Antitrust Division, Litigation I Section

Natalie A. Rosenfelt, Attorney, DOJ, Antitrust Division, Litigation I Section

Panelists

Cynthia Cox, MPH, Senior Policy Analyst, Program for the Study of Health Reform and Private Insurance, Kaiser Family Foundation

Daniel T. Durham, Executive Vice President for Strategic Initiatives, America’s Health Insurance Plans

Keith M. Marzilli Ericson, PhD, Assistant Professor of Markets, Public Policy, and Law, Boston University School of Management

Pinar Karaca-Mandic, PhD, Associate Professor, Health Policy and Management, University of Minnesota School of Public Health

Kevin Lewis, MPP, CEO, Maine Community Health Options

Richard M. Scheffler, PhD, Distinguished Professor of Health Economics and Public Policy, School of Public Health, University of California, Berkeley

4:30–5:30 p.m.

Networking Reception

Wednesday, February 25, 2015

8:30 a.m.

Welcome Remarks and Announcements

Caroline N. Holland, Chief Counsel for Competition and Intergovernmental Relations, U.S. Department of Justice, Antitrust Division

8:40 a.m.

Opening Remarks

William J. Baer, Assistant Attorney General, U.S. Department of Justice, Antitrust Division

9:00–10:45 a.m.

Early Observations Regarding Accountable Care Organizations

Moderators

Ellen Connelly, Attorney, FTC, Bureau of Competition Health Care Division

Matthew C. Mandelberg, Attorney, DOJ, Antitrust Division, Legal Policy Section

Panelists

Alison Fleury, Senior Vice President of Business Development, Sharp HealthCare

Kristen Miranda, Vice President, Strategic Partnerships and Innovation, Blue Shield of California

David B. Muhlestein, PhD, JD, Senior Director of Research and Development, Leavitt Partners, LLC

Hoangmai Pham, Director of Seamless Care Models Group, Center for Medicare and Medicaid Innovation

Terri L. Postma, MD, Medical Officer and Advisor, Center for Medicare at the Centers for Medicare & Medicaid Services

Simeon A. Schwartz, MD, Founding President and CEO, WESTMED Medical Group

Chapin White, PhD, Senior Policy Researcher, RAND Corporation

10:45–11:00 a.m.

Break

11:00 a.m.– 1:00 p.m.

Alternatives to Traditional Fee-for-Service Payment Models

Moderators

Karen A. Goldman, PhD, Attorney Advisor, FTC, Office of Policy Planning

John P. Wiegand, Attorney, FTC, Western Regional Office, San Francisco

Panelists

Michael E. Chernew, PhD, Leonard D. Schaeffer Professor of Health Care Policy, Harvard Medical School

Suzanne Delbanco, PhD, MPH, Executive Director, Catalyst for Payment Reform

R. Adams Dudley, MD, MBA, Director, Center for Healthcare Value, Philip R. Lee Institute for Health Policy Studies, University of California, San Francisco

Mark W. Friedberg, MD, MPP, Senior Natural Scientist, RAND Corporation

Bruce E. Landon, MD, MBA, MSc, Professor of Health Care Policy and Medicine, Harvard Medical School

Lisa McDonnel, Senior Vice President, Network Strategy and Innovation, UnitedHealthcare Networks

Dana Gelb Safran, ScD, Senior Vice President, Performance Measurement and Improvement, Blue Cross Blue Shield of Massachusetts

1:00–2:00 p.m.

Lunch Break (on your own)

2:00–3:50 p.m.

Trends in Provider Consolidation

Moderators

Patrick M. Kuhlmann, Attorney, DOJ, Antitrust Division, Legal Policy Section

Danica Noble, Attorney, FTC, Northwest Regional Office, Seattle

Panelists

Lawton Robert Burns, PhD, MBA, Director, Wharton Center for Health Management and Economics, University of Pennsylvania

Leemore Dafny, PhD, Director of Health Enterprise Management, Kellogg School of Management, Northwestern University

Martin Gaynor, PhD, E.J. Barone Professor of Economics and Health Policy, Carnegie Mellon University

Kenneth Kizer, MD, MPH, Director, Institute for Population Health Improvement, University of California Davis Health System

James Landman, JD, PhD, Director, Healthcare Finance Policy, Perspectives and Analysis, Healthcare Financial Management Association

Joe Miller, General Counsel, America’s Health Insurance Plans

3:50–4:00 p.m.

Break

4:00–5:30 p.m.

Summation Roundtable: Antitrust Perspectives on Evolving Provider and Payment Models

Moderators

Tara Isa Koslov, Deputy Director, FTC, Office of Policy Planning

Leslie C. Overton, Deputy Assistant Attorney General for Civil Enforcement, DOJ, Antitrust Division

Panelists

Mark J. Botti, JD, Partner, Squire Patton Boggs LLP

Martin Gaynor, PhD, E.J. Barone Professor of Economics and Public Policy, Carnegie Mellon University

Thomas L. Greaney, JD, Chester A. Myers Professor of Law and Co-Director of the Center for Health Law Studies, Saint Louis University School of Law

Dionne Lomax, JD, Partner, Mintz Levin Cohn Ferris Glovsky and Popeo, PC

Mark B. McClellan, MD, PhD, Senior Fellow in Economic Studies & Director of The Health Care Innovation and Value Initiative, The Brookings Institution

Monica Noether, PhD, MBA, Vice President, Charles River Associates

5:30 p.m.

Closing Remarks

Marina Lao, Director, Office of Policy Planning, Federal Trade Commission

Robert Potter, Chief, Legal Policy Section, U.S. Department of Justice, Antitrust Division

February 19, 2015 | Permalink | Comments (0) | TrackBack (0)

Mergers and Market Power in the US Nitrogen Fertilizer Industry

Jacob Humber, UC Davis explores Mergers and Market Power in the US Nitrogen Fertilizer Industry.

ABSTRACT: Nitrogenous fertilizer prices spiked in early 2010 despite the fact that natural gas prices, nitrogen fertilizer’s main production cost, have dramatically fallen during this time period. We hypothesize that a merger which occurred between CF and Terra industries in 2010 exacerbated market power in an already concentrated industry, causing nitrogen fertilizer prices to increase. To test this hypothesis, we propose a structural vector autoregressive (SVAR) model. By including corn futures, natural gas and nitrogen fertilizer prices within an SVAR model we control for demand and supply shocks which affect the nitrogen fertilizer market. The remaining variation in fertilizer prices at 2010 not explained by the model is attributed to the merger. If we set this residual to zero, we can then use the SVAR model to forecast a counterfactual fertilizer price series which represents the price of nitrogen fertilizer in the absencebsence of the merger. Applying this technique to the data suggests that the merger raised prices by roughly 75%. This approach presents a middle-ground between the current methodologies used in the retrospective merger analysis literature. It is more transparent than structural approaches such as Nevo (2000) which make strong assumptions on demand and market conduct. Conversely, this time series approach is more applicable than the reduced form approaches such as Hastings (2004) that employ a difference in difference method and consequently rely on the existence of a credible control group.

February 19, 2015 | Permalink | Comments (0) | TrackBack (0)

The impact of Broadband quality standards on Internet services market structure in Colombia

Julian Hidalgo and Juan Oviedo, both Universidad del Rosario, describe The impact of Broadband quality standards on Internet services market structure in Colombia.

ABSTRACT: This paper develops a structural model which allows estimating the impact of regulatory decisions looking for the setting of download-speed standards on market structure and performance. We characterize a setting under which quality standards improve both service quality and availability. As to quality, we evaluate the impact of quality standards on the performance of local demand from a detailed database of broadband internet subscribers, discriminated by the main attributes of an internet subscription contract as location, supplier, monthly-fee, download- and upload-speed features. From these results, we are able to identify the effect of quality regulation on the behavior of internet providers in a differentiated product! market approach. As a consequence, we are able to assert that the response of internet service providers to quality regulation is a more intense product differentiation that contributes to demand expansion and therefore to improve broadband penetration indicators.

February 19, 2015 | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 18, 2015

DYSFUNCTIONS OF THE PATENT SYSTEM AND THEIR EFFECTS ON COMPETITION

David Encaoua (CES - Centre d'economie de la Sorbonne) and Thierry Madies (CREM) explore DYSFUNCTIONS OF THE PATENT SYSTEM AND THEIR EFFECTS ON COMPETITION.

ABSTRACT: The contemporary tensions between patents and competition no longer reside in the traditional trade-off between the exclusionary right given to an inventor to encourage innovation, and the welfare loss induced by the market power associated to this right. They rather result from three important distortions of the patent system that create conflicts between patents and competition on the product market, the technology market, and the innovation market. The first distortion is related to the existence of dubious or weak patents: too many patents are granted to applications of bad quality according to the patentability criteria. This increases the uncertainty attached to patents, reduces the credibility of the system and calls into question the justification of the patent as a protective mechanism. Second, the configuration of a patent, originally designed in the context of an isolated innovation, is not quite adapted to the context of sequential innovations. While sequential patents requires fine limitations between successive generations of innovations, the strengthening of intellectual property rights, including the extension of the patentable subject matters, opened the door to opportunistic behavior and adversely affected the technological exchanges. Third, the emergence of complex technologies, in which the use of a large number of fragmented patents is necessary to produce a new product, implies the necessity to coordinate the behavior of numerous patent holders. Some entrants in these complex technologies are struck by the imperfect coordinated behavior of these patent holders as illustrated in different settings such as the pooling of complementary patents and the licensing of essential patents by the Standard Setting Organisation members. Very often, patents serve to create ambushes or to capture unjustified rents through excessive license fees, which in turn create barriers to entry for new competitors in the innovation market. Two important consequences of these distortions are derived. First, the resolution of the conflicts cannot rely exclusively on the application of the antitrust law. Second, the distortions lead to a very expensive judicial implementation of the patent system.

February 18, 2015 | Permalink | Comments (0) | TrackBack (0)

Non-Cooperative Asymptotic Oligopoly in Economies with Infinitely Many Commodities

Sayantan Ghosal and Simone Tonin, both University of Glascow theorize about Non-Cooperative Asymptotic Oligopoly in Economies with Infinitely Many Commodities.

ABSTRACT:  In this paper, we extend the non-cooperative analysis of oligopoly to exchange economies with infinitely many commodities by using strategic market games. This setting can be interpreted as a model of oligopoly with differentiated commodities by using the Hotelling line. We prove the existence of an “active” Cournot-Nash equilibrium and show that, when traders are replicated, the price vector and the allocation converge to the Walras equilibrium. We examine how the notion of oligopoly extends to our setting with a coutable infinity of commodities by distinguishing between asymptotic oligopolists and asymptotic price-takers. We illustrate these notions via a number of examples.

February 18, 2015 | Permalink | Comments (0) | TrackBack (0)

Investments in Quality, Collective Reputation and Information Acquisition

Fulvio Fontini (Department of Economics and Management - Universita degli Studi di Padova - University of Padua); Katrin Millock (CES - Centre d'economie de la Sorbonne - CNRS : UMR8174 - Universite Paris I - Pantheon-Sorbonne, EEP-PSE - Ecole d'Economie de Paris - Paris School of Economics - Ecole d'Economie de Paris) and Michele Moretto (Department of Economics and Management - Universita degli Studi di Padova - University of Padua) study Investments in Quality, Collective Reputation and Information Acquisition.

ABSTRACT: In many cases consumers cannot observe firms' investment in quality or safety, but have only beliefs on the average quality of the industry. In addition, the outcome of the collective investment game of the firms may be stochastic since firms cannot control perfectly the technology or external factors that may affect production. In such situations, when only consumers' subjective perceptions of the industry level of quality matters, the regulator may make information available to firms or subsidize their information acquisition. Under what conditions is it desirable to make information available? We show how ! firms' overall level of investment in quality depends upon the parameters of the quality accumulation process, the cost of investment and the number of firms in the industry. We also show the potentially negative effects on the total level of quality from providing information on consumers' actual valuation.

February 18, 2015 | Permalink | Comments (0) | TrackBack (0)

Prescribing Behavior of General Practitioners : Competition Matters!

Schaumans, C.B.C. (Tilburg University, Center For Economic Research) concludes Prescribing Behavior of General Practitioners : Competition Matters!

ABSTRACT:  Background: General Practitioners have limited means to compete. As quality is hard to observe by patients, GPs have incentives to signal quality by using instruments patients perceive as quality. Objectives: We investigate whether GPs exhibit different prescribing beha! vior (volume and value of prescriptions) when confronted with more com petition. As there is no monetary benefit in doing so, this type of (perceived) quality competition originates from GPs satisfying patients’ expectations. Method: We look at market level data on per capita and per contact number of items prescribed by GPs and the value of prescriptions for the Belgian market of General Practitioners. We test to which extent different types of variables explain the observed variation. We consider patient characteristics, GP characteristics, number and type of GP contacts and the level of competition. The level of competition is measured by GP density, after controlling for the number of GPs and a HHI. Results: We find that a higher number of GPs per capita results in a higher number of units prescribed by GPs, both per capita and per contact. We argue that this is consistent with quality competition in the GP market. Our findings reject alternative explanations of GP scarcity, availability effect in GP care consumption and GP dispersing prescription in time due to competition.

February 18, 2015 | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 17, 2015

Provider competition and over-utilization in health care

Jan Boone and Rudy Douven describe Provider competition and over-utilization in health care. ABSTRACT: This paper compares the welfare effects of three ways in which health care can be organized: no competition (NC), competition for the market (CfM) and competition on the market (CoM) where the payer offers the optimal contract to providers in each case. We argue that each of these can be optimal depending on the contracting environment of a speciality. In particular, CfM is optimal in a clinical situation where the payer either has contractible information on provider quality or can enforce cost efficient protocols. If such contractible information is not available NC or CoM can be optimal depending on whether patients react to decentralized information on quality differences between providers and whether payer's and patients' p! references are aligned.

February 17, 2015 | Permalink | Comments (0) | TrackBack (0)

Competition and third party access in railroads

Gunter Knieps, Freiburg studies Competition and third party access in railroads.

ABSTRACT: This chapter is organized as follows: In section 2 the historical roots of third party acess regulation are characterized. This includes the Prussian railway law of 1838 and the terminal railroad case of 1912. In section 3 a normative frame-work, based on modern network economics, for the evaluation of third party access policies is provided. In section 4, the gradual process of market opening for railway transport services and the evolution of third party access regulation in Europe are characterized. In this context the potentials for competition on the markets for passenger rail services and public subsidies are also considered.

February 17, 2015 | Permalink | Comments (0) | TrackBack (0)

More Than Money: The Economics of Payments and Its Regulation

More Than Money: The Economics of Payments and Its Regulation

                                        UCL Faculty of Laws Events                                   

Wednesday, 11 March 2015 from 13:00 to 19:00 (GMT)

                                    London, United Kingdom                               

More Than Money: The Economics of Payments and Its...

Registration Information

        Registration Type Sales End     Price Fee Quantity
        Standard Ticket                10 Mar 2015        £200.00    £0.00   
        Standard Group Ticket                10 Mar 2015        £180.00    £0.00   
        UCL Alumni Ticket                10 Mar 2015        £175.00    £0.00   
        Full Time Academics or Government Employees                10 Mar 2015        £100.00    £0.00   
        Non-UCL Students                10 Mar 2015        £50.00    £0.00   

February 17, 2015 | Permalink | Comments (0) | TrackBack (0)

Vertical Disintegration in the European Electricity Sector: Empirical Evidence on Lost Synergies

Klaus Gugler (Department of Economics, Vienna University of Economics and Business)
Mario Liebensteiner (Research Institute for Regulatory Economics, Vienna University of Economics and Business) and Stephan Schmitt (WIK Consult and Research Institute for Regulatory Economics, Vienna University of Economics and Business) offer Vertical Disintegration in the European Electricity Sector: Empirical Evidence on Lost Synergies.

ABSTRACT:   The EU has been promoting unbundling of the transmission grid from other stages of the electricity supply chain with the aim of fostering competition in the upstream stage of electricity generation. At presence, ownership unbundling is the predominant form of unbundling in Europe. However, the benefits of increased competition from ownership unbundling of the transmission grid may come at the cost of lost vertical synergies between the formerly integrated stages of electricity supply. The policy debate generally neglects such potential costs of unbundling, yet concentrates on its benefits. Therefore European cross-co! untry evidence may shed some light on this issue. This study helps fill this void by empirically estimating the magnitude of economies of vertical integration (EVI) between electricity generation and transmission based on a quadratic cost function. For this purpose we employ novel firm-level panel data of major European electricity utilities. Our results confirm the presence of substantial EVI, which put the policy measure of transmission ownership unbundling into question.

February 17, 2015 | Permalink | Comments (0) | TrackBack (0)

A Survey of the Economics of Patent Systems and Procedures

Eckert, Andrew (University of Alberta, Department of Economics) and Langinier, Corinne (University of Alberta, Department of Economics) offer A Survey of the Economics of Patent Systems and Procedures.

ABSTRACT: The last several decades have seen increases in patenting activity worldwide, as well as growing issues related to patent quality. In response to these quality issues a recent patent literature has emerged, that investigates the behavior and incentives of patent examiners, applicants, and third parties. In this paper, we provide an overview of patent procedures, patent systems and a survey of the new economic literature on patent systems. Both theoretical and empirical papers are considered. Policy implications coming from this literature are presented.

February 17, 2015 | Permalink | Comments (0) | TrackBack (0)

Monday, February 16, 2015

Endogenous cartel formation: Experimental evidence

Miguel A. Fonseca, Exeter and Hans-Theo Normann, DICE examine Endogenous cartel formation: Experimental evidence.

ABSTRACT:  In a Bertrand-oligopoly experiment, firms choose whether or not to engage in cartel-like communication and, if so, they may get fined by a cartel authority. We find that four-firm industries form cartels more often than duopolies because they gain less from a hysteresis effect after cartel disruption.

February 16, 2015 | Permalink | Comments (0) | TrackBack (0)