Monday, May 9, 2022

Fourteenth Annual Northwestern Conference on Antitrust Economics and Competition Policy: Call for Papers May 20, 2022

Fourteenth Annual Northwestern Conference on
Antitrust Economics and Competition Policy

 

Sponsored by Compass Lexecon

 

Call for Papers

Friday, September 16—Saturday, September 17, 2022

Submission Deadline: May 20, 2022

The Northwestern Center on Law, Business, and Economics at Northwestern Pritzker School of Law and the Center for the Study of Industrial Organization at Northwestern are issuing a call for original research papers to be presented in-person at the Fourteenth Annual Conference on Antitrust Economics and Competition Policy.  This year’s conference will return to the in-person two-day event format and will run from approximately 9:00 AM (Central) on Friday, September 16, 2022 to 12:30 PM (Central) on Saturday, September 17, 2022.

We are delighted to announce that Compass Lexecon has agreed to provide the funding to support both this year’s conference. As always, conference organizers will be solely responsible for choosing papers and speakers.

The goal of this conference is to provide a forum where leading scholars from across the world can gather together with Northwestern’s own distinguished faculty to present and discuss high quality research relevant to antitrust economics and competition policy. Both theoretical and empirical submissions are welcome.  Papers in industrial organization or applied microeconomic theory that address issues relevant to antitrust policy are welcome even if they do not directly focus on particular antitrust policy issues or institutions.  While papers on all topics are welcome, we especially encourage submissions related to the following topic areas: 

  • digital platforms and competition policy
  • privacy, data security, and competition policy
  • innovation and competition policy
  • vertical mergers/integration
  • vertical contracting, foreclosure/exclusion
  • the effectiveness of behavioral remedies
  • buyer power and monopsony power
  • EU platform regulation

We hope to involve leading thinkers from the government, non-profit, and private sector, as well as leading academics from economics departments, business schools, law schools and public policy schools. While most of the conference will be devoted to presentation and discussion of original academic research, we also expect to schedule a small number of panels on important current topics or policy issues.   

If you have questions about the appropriateness of your topic for the conference, or suggestions for panel subjects, please contact Professor William Rogerson, Professor of Economics and CLBE Research Director on Competition, Antitrust and Regulation at wrogerson@northwestern.edu.

Papers prepared for the Fourteenth Annual Conference on Antitrust Economics and Competition Policy will be permanently hosted on the Center on Law, Business, and Economics website as part of our Working Papers Series:  http://www.law.northwestern.edu/research-faculty/clbe/workingpapers/.              

Authors will be free to publish their work in other venues.

RESEARCH PROPOSALS: SUBMISSION, REVIEW PROCEDURE AND TIMELINE

Research Proposals should include an abstract (300 words maximum) and c.v.

Proposal Submission Deadline: Research Proposals should be submitted to clbe@law.northwestern.edu by close of business on May 20, 2022.

Notification Deadline:  Research Proposals will be reviewed by a committee.  Authors will be notified of the committee’s decisions on or around June 15, 2022.

May 9, 2022 | Permalink | Comments (0)

GDPR and the Lost Generation of Innovative Apps

Using data on 4.1 million apps at the Google Play Store from 2016 to 2019, we document that GDPR induced the exit of about a third of available apps; and in the quarters following implementation, entry of new apps fell by half. We estimate a structural model of demand and entry in the app market. Comparing long-run equilibria with and without GDPR, we find that GDPR reduces consumer surplus and aggregate app usage by about a third. Whatever the privacy benefits of GDPR, they come at substantial costs in foregone innovation.

May 9, 2022 | Permalink | Comments (0)

Anti-Collusion Leniency Programs and the Pricing of IPOs: International Evidence

Anti-Collusion Leniency Programs and the Pricing of IPOs: International Evidence

 

 

Huu Nhan Duong

Monash University - Department of Banking and Finance; Financial Research Network (FIRN)

Abhinav Goyal

University College Cork

Leon Zolotoy

University of Melbourne - Melbourne Business School

 

Abstract

We provide evidence that anti-collusion leniency legislations around the world reduce IPO underpricing. The effect is amplified (mitigated) among IPOs with more prominent agency concerns (lower level of information asymmetry) and is mitigated in countries with stringent financial reporting regulations and strong external governance mechanisms. Following the passage of the legislations, IPOs have higher float, manifest a stronger link between proceeds raised and post-IPO operating performance, and are more likely to disclose the use of proceeds and to be oversubscribed. Our results are consistent with the view that leniency legislations mitigate informational and agency-related frictions, resulting in less underpriced IPOs.

May 9, 2022 | Permalink | Comments (0)

Friday, May 6, 2022

The Role of Competition Law in Regulating Data in China's Digital Economy

The Role of Competition Law in Regulating Data in China's Digital Economy

 

Wendy Ng

University of Melbourne - Law School

 

Abstract

As the digital economy has grown and data has become a more valuable and critical resource, the collection, use, and sharing of data by companies have come under increasingly intense regulatory scrutiny. The relevance and appropriateness of antitrust and competition laws to deal with data, particularly in the context of the digital economy, are being examined and considered by antitrust and competition regulators and governments around the world. Similar discussions and issues are also becoming prominent in China. Not only has China been developing an increasingly sophisticated legal regime to regulate and enable the state to exercise control over data, it has also clearly tightened and increased regulatory scrutiny and control over Internet and technology companies. In particular, competition law has played a conspicuous role in China’s regulatory campaign to clamp down on the Internet and technology sector.

This article examines whether and how China’s competition laws might apply to regulate the data and data practices of Internet and technology companies. It does so by undertaking a political economy and contextual exploration of China’s data regulatory environment and its relationship and interaction with China’s competition laws. The nature of China’s political economy, as well as of its competition laws, means that a variety of interests, goals, and priorities – which might encompass concerns that other jurisdictions might regard as being beyond the purview of competition law – are considered and balanced in the enforcement of competition law, under the macroeconomic supervision and guidance of the state.

May 6, 2022 | Permalink | Comments (0)

Thursday, May 5, 2022

Complexity-Minded Antitrust

Complexity-Minded Antitrust

 

Nicolas Petit

European University Institute - Department of Law (LAW)

Thibault Schrepel

University Paris 1 Panthéon-Sorbonne; VU University Amsterdam; Stanford University's Codex Center; Sciences Po

 

Abstract

Complexity science is widely used across the policy spectrum but not in antitrust. This is unfortunate. Complexity science enables a rich understanding of competition beyond the simplistic descriptions of markets and firms proposed by neoclassical models and their contemporary neo-Brandeisian critique. Many novel insights can be gained by supporting more openness to some of its key teachings, like feedback loops and the role of uncertainty. The present article lays down the building blocks of a complexity-minded antitrust method.

May 5, 2022 | Permalink | Comments (0)

Wednesday, May 4, 2022

Cartel Damage Mitigation from Retailers' Store Brands

Cartel Damage Mitigation from Retailers' Store Brands

 

Roman Inderst

Goethe University Frankfurt

Marco J.W. Kotschedoff

KU Leuven

Raphael Kuhlmann

Goethe University Frankfurt

 

Abstract

As store brands (or private labels) are not only common in many product categories but are often procured competitively from different sources or even through vertical integration, they may be not or much less directly affected by a cartel induced overcharge. The first part of this article provides the economic foundations for how we should expect retailers to optimally adjust their store brand prices when facing higher wholesale prices on national brands. While retailers should pass on at least some of the overcharge for national brands, resulting in a price increase for national brands, theoretically their optimal response with respect to store brands is ambiguous, as there are two potentially opposing effect, a "demand diversion effect" and a "margin effect". Consumers could thus face either lower or higher store brand prices when there is a cartel of brand manufacturers. In any case, however, the optimal reaction of retailers allows them to mitigate the immediate damage inflicted by the overcharge on national brands, which raises the question to what extent such mitigation should be accounted for in follow-on cases. In the second part of the paper we illustrate our arguments with an empirical analysis of the German coffee cartel.

May 4, 2022 | Permalink | Comments (0)

Tuesday, May 3, 2022

Does Entry Remedy Collusion? Evidence from the Generic Prescription Drug Cartel

Entry represents a fundamental threat to cartels engaged in price fixing. We study the extent and effect of this behavior in the largest price fixing case in US history, which involves generic drugmakers. To do so, we link information on the cartel’s internal operations to regulatory filings and market data. We find that collusion induces significant entry, which in turn reduces prices. However, regulatory approvals delay most entrants by 2-4 years. We then estimate a structural model to assess counterfactual policies. We find that reducing regulatory delays by just 1-2 years equates to consumer compensating variation of $597 million-$1.52 billion.

May 3, 2022 | Permalink | Comments (0)

Monday, May 2, 2022

Public-private Collusion

Public-private Collusion

 

Filipa Mota

Católica Porto Business School

Joao Correia‐da‐Silva

Universidade do Porto

Joana Pinho

Catholic University of Portugal (UCP) - Católica Porto Business School

 

Abstract

We study collusion between a public firm and a private firm, characterizing the outcome (market shares, profits, and consumer surplus) that results from Nash bargaining between the two firms relative to the non-cooperative outcome. We find that if the public firm’s preference for consumer surplus is mild, both firms reduce output (as in a private duopoly). If it is intermediate, while the public firm reduces output, the private firm expands output to such an extent that total output increases. If it is strong, the output expansion by the private firm does not compensate for the output contraction by the public firm, and thus total output decreases. We also assess the impact of relative bargaining power and study collusion sustainability. Our results suggest that collusion reduces the productive inefficiency caused by the public firm being more expansionary, and may lead to higher profits and consumer surplus.

May 2, 2022 | Permalink | Comments (0)

Fare Evasion and Monopoly Regulation

Fare Evasion and Monopoly Regulation

 

 

Martin Besfamille

Instituto de Economía, Pontificia Universidad Católica de Chile

Nicolas Figueroa

Pontifical Catholic University of Chile

León Guzmán

New York University (NYU)

Date Written: 2022

Abstract

We consider the regulation of a monopoly facing consumers that may evade payments, an important issue in public utilities. To maximize total surplus, the regulator sets the price and socially costly transfers, ensuring that the monopoly breaks-even. With costly effort, the firm can deter evasion. Under unit demand and fixed quality, price is independent of marginal cost, but increasing in the marginal cost of public funds. When quality is endogenous, we find sufficient conditions that imply a non-monotonic relation between price and marginal cost of public funds. We extend the model to consider non-unit demand and moral hazard.

May 2, 2022 | Permalink | Comments (0)

Friday, April 29, 2022

A New Era of Midnight Mergers: Antitrust Risk and Investor Disclosures

A New Era of Midnight Mergers: Antitrust Risk and Investor Disclosures

By:

John M. Barrios; Thomas G. Wollmann

Abstract:

Antitrust authorities search public documents to discover anticompetitive mergers. Thus, investor disclosures may alert them to deals that would otherwise escape scrutiny, creating disincentives for managers to divulge transactions. We study this behavior in publicly traded US companies. First, we estimate a regression discontinuity that exploits mandatory disclosure thresholds stipulated by securities law. We find that releasing information to investors poses antitrust risk. Second, we present a method for measuring undisclosed merger activity that relies on financial accounting reporting requirements. We find that undisclosed mergers total $2.3 trillion between 2002 and 2016.

URL:

http://d.repec.org/n?u=RePEc:nbr:nberwo:29655&r=&r=ind

April 29, 2022 | Permalink | Comments (0)

Thursday, April 28, 2022

Innovation, Antitrust Enforcement, and the Inverted-U

Innovation, Antitrust Enforcement, and the Inverted-U

 

 

Richard Gilbert

University of California, Berkeley

Christian Riis

Norwegian Business School

Erlend Riis

University of Cambridge

Date Written: February 10, 2022

Abstract

The effects of monopoly power or mergers on incentives to innovate are important issues for antitrust enforcement, but they receive relatively little attention in litigated cases compared to the analysis of predicted effects on prices. This paper reviews what is known about the relationship between market structure and innovation and its implications for antitrust enforcement. A focus is on the significance of the inverted-U result in dynamic markets identified in research by Philippe Aghion, Peter Howitt, and their co-authors. We note that these results do not apply directly to mergers. A merger creates a negative externality by eliminating the incentive of each merging party to invest in an innovation that takes sales from the other party. However, mergers also can create a positive externality for innovations that expand the merged firm’s demand or accelerate discovery. We conclude that the net effects for innovation from mergers and from the acquisition or maintenance of monopoly power depend importantly on the extent to which mergers or monopoly power increase existing profits that are jeopardized by innovation.

April 28, 2022 | Permalink | Comments (0)

Wednesday, April 27, 2022

FinTechs and Racial Discrimination in Lending

FinTechs and Racial Discrimination in Lending

 

 

Rachel M. B. Atkins

New York University (NYU) - Department of Management and Organizational Behavior

Lisa D. Cook

Michigan State University - Department of Economics and James Madison College; NBER

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business

Date Written: January 9, 2022

Abstract

We assess the role of FinTech firms in loans made through the Paycheck Protection Program (PPP). The PPP program, created by the U.S. government as a response to the COVID-19 pandemic, provides loans to small businesses so they can keep employees on their payroll. We argue that FinTech firms’ reliance on technology rather than relationship-banking approaches used by traditional banks helps to address discrimination in lending, at least in part. Using newly released data on the PPP program, we find support for our arguments: while Black-owned businesses received loans that were approximately 50 percent lower than observationally similar White-owned businesses, the effect narrows considerably when FinTechs are allowed to provide loans.

April 27, 2022 | Permalink | Comments (0)

Tuesday, April 26, 2022

Passive Forward Ownership and Upstream Collusion

Passive Forward Ownership and Upstream Collusion

Ioannis Pinopoulos

National and Kapodistrian University of Athens - Department of Economics

Konstantinos Charistos

University of Macedonia - Department of Economics

Panagiotis Skartados

Athens University of Economics and Business - Department of Economics

 

Abstract

We examine the effects of passive forward ownership on the sustainability of upstream collusion. We consider a homogeneous Cournot duopoly with competing vertical chains. In one vertical chain, the upstream firm has passive ownership over its downstream client. We find that passive forward ownership hinders upstream collusion. We identify as the main driver of our finding the negative effect that passive forward ownership has on the upstream non‐owner’s collusive profits.

April 26, 2022 | Permalink | Comments (0)

Monday, April 25, 2022

The Impact of Privacy Regulation on Web Traffic: Evidence From the GDPR

The Impact of Privacy Regulation on Web Traffic: Evidence From the GDPR

Raffaele Congiu

Lorien Sabatino

Department of Production and Management Engineering, Politecnico di Torino

Geza Sapi

European Commission, DG Competition, Chief Economist's Team; Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE)

Abstract

We use traffic data from around 5,000 web domains in Europe and United States to investigate the effect of the European Union’s General Data Protection Regulation (GDPR) on website visits and user behaviour. We document an overall traffic reduction of approximately 15% in the long-run and find a measurable reduction of engagement with websites. Traffic from direct visits, organic search, email marketing, social media links, display ads, and referrals dropped significantly, but paid search traffic - mainly Google search ads - was barely affected. We observe an inverted U-shaped relationship between website size and change in visits due to privacy regulation: the smallest and largest websites lost visitors, while medium ones were less affected. Our results are consistent with the view that users care about privacy and may defer visits in response to website data handling policies. Privacy regulation can impact market structure and may increase dependence on large advertising service providers. Enforcement matters as well: The effects were amplified considerably in the long-run, following the first significant fine issued eight months after the entry into force of the GDPR.

April 25, 2022 | Permalink | Comments (0)

Sunday, April 24, 2022

CCP Conversations: Evolving Merger Guidelines (webinar)

Webinar banner

 
 
CCP Conversations: Evolving Merger Guidelines
Merger guidelines play a key role in providing clarity about approaches for competition authorities' evaluation of mergers across the the European Union, UK and US. Emerging from the current debate about standards of proof for merger challenges, the content of merger guidelines is now open for question. An ongoing public enquiry on US merger guidelines addresses 15 different topics. Meanwhile, the UK merger guidelines were updated in 2021 and the European Commission guidelines, in contrast, have remained unchanged since 2004. What are the elements of merger guidelines under review, what changes might be made, and in what sense would changes be appropriate? This Conversation offers an opportunity to hear a US perspective from a key participant in their policy debate - and to compare transatlantic thinking.
 

April 24, 2022 | Permalink | Comments (0)

Friday, April 22, 2022

The Berkeley 5 Antitrust Economist Program on Proposed Antitrust Legislation is now up on Youtube

This was a really great program with Joe Farrell, Rich Gilbert, Mike Katz, and Dan Rubinfeld, and Carl Shapiro.  It is amazing how many Berkeley economists have served as chief economist of DOJ or FTC.

 

 

 

April 22, 2022 | Permalink | Comments (0)

Anti-Collusion Leniency Programs and the Pricing of IPOs: International Evidence

Anti-Collusion Leniency Programs and the Pricing of IPOs: International Evidence

 

Huu Nhan Duong

Monash University - Department of Banking and Finance; Financial Research Network (FIRN)

Abhinav Goyal

University College Cork

Leon Zolotoy

University of Melbourne - Melbourne Business School

 

Abstract

We provide evidence that anti-collusion leniency legislations around the world reduce IPO underpricing. The effect is amplified (mitigated) among IPOs with more prominent agency concerns (lower level of information asymmetry) and is mitigated in countries with stringent financial reporting regulations and strong external governance mechanisms. Following the passage of the legislations, IPOs have higher float, manifest a stronger link between proceeds raised and post-IPO operating performance, and are more likely to disclose the use of proceeds and to be oversubscribed. Our results are consistent with the view that leniency legislations mitigate informational and agency-related frictions, resulting in less underpriced IPOs.

April 22, 2022 | Permalink | Comments (0)

Thursday, April 21, 2022

2022 Handler Lecture

THE 2022 MILTON HANDLER LECTURE ON ANTITRUST
Sponsoring Committee: Antitrust and Trade Regulation
Yee Wah Chin, Chair

IN-PERSON:
Wednesday, May 18, 2022, 6:30-8:00 PM, with reception to follow

VENUE:
Meeting Hall of the House of the Association of the Bar of the City of New York
42 West 44th St., New York, NY 10036

WELCOME:
Sheila S. Boston, President, New York City Bar Association

KEYNOTE SPEAKER:
Jonathan Kanter, Assistant Attorney General for the Antitrust Division
U.S. Department of Justice

PANELISTS:
Nancy L. Rose, Charles P. Kindleberger Professor of Applied Economics
MIT Department of Economics
Daniel Francis, Climenko Fellow and Lecturer on Law
Harvard Law School


MODERATOR:
Spencer Weber Waller, John Paul Stevens Chair in Competition Law
Director of the Institute for Consumer Antitrust Studies, Loyola Law School

No Fee to Attend. Please register at
https://services.nycbar.org/EventDetail?EventKey=CMTE051822

For registration assistance, contact Customer Relations at 212-382-6663 or
customerrelations@nycbar.org

The Milton Handler Lectures, devoted to developments in the law of antitrust, are made
possible by a generous endowment fund established by Professor Handler -- a leading
authority on antitrust who taught at Columbia Law School for nearly 50 years; practiced
at Kaye, Scholer, Fierman, Hays & Handler; and received the John Sherman Award from
the Department of Justice.

April 21, 2022 | Permalink | Comments (0)

Selling Antitrust

Selling Antitrust

Herbert Hovenkamp

University of Pennsylvania Carey Law School; University of Pennsylvania - The Wharton School; University College London

Abstract

Antitrust enforcers and its other defenders have never done a good job of selling their field to the public. That is not entirely their fault. Antitrust is inherently technical, and a less engaging discipline to most people than, say, civil rights or criminal law. The more serious problem is that when the general press does talk about antitrust policy it naturally gravitates toward the fringes, both the far right and the far left. Extreme rhetoric makes for better press than the day-to-day operations of a technical enterprise. The extremes are often stated in overdramatized black-and-white terms that avoid the real world subtleties that make science more fact-dependent but also more useful.

Both extreme positions generally favor lower output as a solution to antitrust problems. The result is higher prices and also fewer jobs. The right shrugs at higher prices because of its faith that there are offsetting efficiencies in production. The left simply accepts that higher prices benefit smaller competitors, its preferred protected class. On employment, the extreme right does not really care, because suppressing labor power was part of a bigger neoliberal agenda. The negative impact on jobs remains a major blind spot for the left, however, which claims to support worker rights but ends up advocating policies that do much more harm than good.

April 21, 2022 | Permalink | Comments (0)

Wednesday, April 20, 2022

Assessing EU Merger Control through Compensating Efficiencies

Assessing EU Merger Control through Compensating Efficiencies

 

 

Pauline Affeldt

German Institute for Economic Research (DIW Berlin); Technische Universität Berlin (TU Berlin)

Tomaso Duso

German Institute for Economic Research (DIW Berlin); TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization; Centre for Economic Policy Research (CEPR)

Klaus Gugler

Vienna University of Economics and Business

Joanna Piechucka

German Institute for Economic Research (DIW Berlin)

 

Abstract

Worldwide, the overwhelming majority of large horizontal mergers are cleared by antitrust authorities unconditionally. The presumption seems to be that efficiencies from these mergers are sizeable. We calculate the compensating efficiencies that would prevent a merger from harming consumers for 1,014 mergers affecting 12,325 antitrust markets scrutinized by the European Commission between 1990 and 2018. Compensating efficiencies seem too large to be achievable for many mergers. Barriers to entry and the number of firms active in the market are the most important factors determining their size. We highlight concerns about the Commission’s merger enforcement being too lax.

April 20, 2022 | Permalink | Comments (0)