COMPETITION POLICY

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TítuloThe role of market power in economic growth: an analysis of the differences between EU and US competition policy theory, practice and outcomes

TítuloThe role of market power in economic growth: an analysis of the differences between EU and US competition policy theory, practice and outcomes

Contrary to the US, the doctrine underlying the practice of competition law in Europe has not yet experienced an in-depth critical review. For Marty and Pillot (2009), the European competition authorities are still significantly influenced by the ordo-liberal School, or Freiburg School founded in the 1930s. This school of thought regards unrestricted competition as a founding principle of public action, and posits that the fundamental role of public authorities should be to preserve competition in itself. Dominance is viewed as a stable and permanent situation which cannot be tackled by the market and which requires public intervention to be eliminated. The primary role of competition policy is to promote and preserve the access of dominant firms’ competitors to the market. Hence, the authorities’ assessment of market structures should prevail over their assessment of the economic effects of dominant firms’ behaviour. Marty (2010) asserts that the ordo- liberal doctrine bans the concentration of economic power because such concentration prevents competitors’ entry. The purpose of European authorities, under the ordo-liberal influence is to preserve the competitive market structure rather than to promote a market structure that maximises efficiency. For Marty (2010), the European Court of Justice’s interpretation of the ordo-liberal doctrine entails a degree of similarity with the structuralist approach of the US authorities before 1970 as both can lead public authorities to attempt to prevent dominant positions per se. Marty (2010) highlights that in the structuralist as well as in the European Court of Justice’s views, the public authorities’ duty is to prevent all dominant firms’ behaviour that could potentially foreclose competitors and limit their ability to grow.
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24 Lee mas

Keywords Competition policy · Gasoline · Gibbs sampling · Variance filter JEL Classification L13 · L59 · L71

Keywords Competition policy · Gasoline · Gibbs sampling · Variance filter JEL Classification L13 · L59 · L71

Abstract Cartel detection is one of the most basic and most complicated tasks of competition authorities. In recent years, however, variance filters have provided a fairly simple tool for rejecting the existence of price-fixing, with the added advantage that the methodology requires only a low volume of data. In this paper we analyze two aspects of variance filters: (i) the relationship that can be established between market structure and price rigidity, and (ii) the use of different benchmarks for implementing the filters. This paper addresses these two issues by applying a variance filter to a gas- oline retail market that is characterized by a set of unique features. Our results confirm the positive relationship between monopoly and price rigidity, and confirm the vari- ance filter’s ability to detect non-competitive behavior when an appropriate benchmark is used. Our findings should serve to promote the implementation of this methodol- ogy among competition authorities, albeit in the awareness that a more exhaustive complementary analysis is required.
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26 Lee mas

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Competition Policy is a diverse, complex field. Its scope runs from sophisticated economic techniques to detailed legal procedures, and from the psychological factors involved in a dawn raid to the sleuthing skills required in the design of a sound research strategy. However, above all the rules and topics that structure Competition Law, the aim – i.e. the main objective – is essential to understand how it is applied and, more important, why it is applied, in what context and to what extent. Accordingly, the following pages discuss the aim of Peruvian Competition Policy, for the understanding of the basis of our competition law, and so, for a deeper comprehension of the study and discussion of particular institutions of Peruvian Competition Law. This article discusses what the Competition Act and the Competition Authority in Peru have assumed as the goal of Peruvian Competition Policy, drawing some concern on its adherence to the classic – and somewhat surpassed – Chicagoan notion of efficiency. The article supports the defense of efficiency – under a liberal «consumer welfare» approach – as the only proper aim for Competition Policy. Finally, it proposes a systemic relation between Competition Policy and other public policies with harmonic or discordant goals.
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34 Lee mas

Merger control in the pharmaceutical sector and the innovation market assessment  European analysis in practice and differences wiith the american approach

Merger control in the pharmaceutical sector and the innovation market assessment European analysis in practice and differences wiith the american approach

112 Paper “MERGER CASE STUDY: GLAXO WELLCOME” by Teresa Lorca Morales for the Competition Policy and Market Regulation course of B. Dumont & P. Holmes, College of Europe. April 07, Concerning the Antibiotics “In this field, the Commission concluded that there are not overlaps between the Glaxo and Wellcome products, regarding the third level of ATC classification. The non overlapping is demonstrated like follows: On one hand, the Wellcome’s antibiotic market, is divided in systematic antibacterial and topical antibacterial, both of them off-patent and sold without prescription. On the other hand, the Glaxo’s antibiotic market is focused on cephalosporins, which are injectables and normally sold in hospitals. The market share of both companies in a lax product market definition of antibiotics is less than 10% in almost all the countries of the EU. The companies would not overlap even in the case of a more restrictive relevant market approach. These data confirm that competitions questions do not arise in this type of drug”.
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82 Lee mas

TítuloLos acuerdos de precios en la banca

TítuloLos acuerdos de precios en la banca

Columbia Business Law Review Columbia Law Review Contemporary Politicy Issues Consumer Finance Law Quarterly Report Conttrato e Impresa Competition Policy Newsletter Consejo Superior Ban[r]

504 Lee mas

Agricultural sector and competition in Colombia

Agricultural sector and competition in Colombia

Even though positive in general terms, the lessons from competition policy implementation for the agricultural sector are not all rosy. From the standpoint of implementation, at least two issues merit attention. First, it is important to examine the role of guarantees in antitrust procedures. Even though it seems to be an adequate tool for attaining the goals of a SIT investigation, recourse to negotiating and offering guarantees has tended to be taken for granted, as past experience illustrates. Moreover, compliance with guarantees’ commitments has not always been strong. To date, the SIT has opened several investigations regarding non–compliance of guarantees, and had made effective the insurance policies. To create better compliance of guarantees, the SIT has imposed fines on non-compliant firms. As cases of repetitive non-compliance tend to show, there is the possibility that the procedure may open the door to undermining law enforcement and weakening the development of a competition culture. Adding to the complexity of guarantees is that the procedure for offering and negotiating guarantees is not subjected to explicit rules, which exposes the process to uncertainty. This calls for greater transparency.
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21 Lee mas

How Schools Do Policy. Policy Enactments in Secondary Schools

How Schools Do Policy. Policy Enactments in Secondary Schools

La otra política que analizan con más detalle es la «política de comportamiento» (beha- viour policy), un tema recurrente en el debate público educativo en Inglaterra junto con el de los standards (al que aparece unido). Los autores lo resitúan en la política educativa de la última década en Inglaterra, señalando cómo los distintos gobiernos, tanto el Nuevo Labo- rismo como la actual coalición de liberales y conservadores, han supuesto ligeros cambios de énfasis (el papel del comportamiento en las posibilidades de aprendizaje para los primeros —Behaviour for Learning—; la necesidad de más «poder de disciplina» a los directores y profesores para los segundos, pp. 100-101), pero sin apenas modificarse los parámetros del discurso. A diferencia de la política de standards, los autores la califican como una política más «abierta […] a la construcción de sentido» (p. 98), donde serían más visibles las diferen- cias y conflictos entre distintas visiones y actuaciones: «el comportamiento se constituye dentro de un “campo de interpretaciones” —¿qué es un comportamiento inaceptable o vio- lento? ¿qué es demasiado ruidoso o disruptivo?» (p. 116). Hechas de prácticas diversas y por una multiplicidad de actores, las actuaciones de esta política de comportamiento o dis-
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5 Lee mas

Competition and regulation in telecommunications industry

Competition and regulation in telecommunications industry

framework contains four directives, the Chinese Telecom Regulation consists of only 81 articles. The second level is whether the purpose of rules is set for preventing anti-competitive behaviors or correcting the effect of excluding competition. From the aim and terms of the context, Chinese Telecom Regulation does not have such provision to stop restricting competition. Also, the effect from the implementation of the Telecom Regulation can not prevent and correct restrict competition. On the one hand, China just completed a small part of the liberalization. Only value-added ser- vices have been privatized, and basic telecommunications services are still tightly controlled in the hands of the three state-owned enterprises. It is worth mentioning that the driving force of the privatization is not the only from the competitive pres- sure of value-added services, but also the desire of Chinese Government to join into WTO, which requires opening value-added services for foreign investors. On the other hand, the Telecom Regulation promotes the competition powerlessly. Chinese telecom industry has now formed an impregnable oligarchical structure. Such a mar- ket structure can not prevent tacit collisions between the incumbents. And there are lots of complaints about the three operators acting monopolist conduct. This indi- cates that the telecommunications regulation is not able to solve competitive prob- lems. Thus, the intervention of Anti-Monopoly Law may provide additional protec- tion to small competitors and consumers, thereby increasing overall welfare in the telecommunications industry.
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174 Lee mas

Bank competition in Argentina: 1997-1999

Bank competition in Argentina: 1997-1999

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23 Lee mas

Moving from Research to Public Policy

Moving from Research to Public Policy

Conclusion: Research can help change public policy to improve public health. Data needs to be part of larger policy process with clear policy goals and strategy[r]

61 Lee mas

Airline route structure competition and network policy

Airline route structure competition and network policy

This paper studies pricing policies and route structure choices by carriers with market power in a network setting and in the presence of congestion externalities. We account for passenger benefits from increased frequency, passenger connecting costs, airline endogenous hub location and route structure strategic competition. The analysis shows that an instrument directly aimed at regulating route structure choice may be needed to maximize welfare, in addition to per- passenger and per-flight tolls designed to correct output inefficiencies. This holds true even when the regulator is does not face any constraint on pricing.
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15 Lee mas

Essays on Monetary Policy, Wage Bargaining and Fiscal Policy

Essays on Monetary Policy, Wage Bargaining and Fiscal Policy

spending upward biases emerge as the optimal response to the static distortions. The paper shows that appointing a central banker more conservative than society in terms of inflation targets improves steady-state welfare, at the small cost of generating some stabilization biases, arising because of departures from the assumption of benevolent policy makers. The authors also compute the optimal inflation rate, defined as the one that would be chosen by a Ramsey planner internalizing that fiscal variables are chosen in a discretionary fashion. That optimal inflation rate is conceptually the same as the one derived in our model. However, only its steady-state value is computed while we are interested in characterizing its state-contingent path. This is because we want to focus on the optimal monetary policy response to shocks under fiscal discre- tion. Moreover, our analysis is performed within a linear-quadratic framework without steady-state distortions. This allows to derive an explicit targeting rule specifying how the objectives of the central bank optimally relate to each other.
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132 Lee mas

Association between feelings about competition and self-reported happiness: do racial difference matter?:
Evidence from the World Value Surveys

Association between feelings about competition and self-reported happiness: do racial difference matter?: Evidence from the World Value Surveys

In other words, although positive views about competition are generally associated with higher levels of self-reported happiness, individuals with different opinions about competition report similar levels of happiness. As noted, however, the result that individuals who really dislike competition report a higher level of happiness is somewhat puzzling and somehow contradicts Blaug´s quote above. One could conjecture about the behavior of individuals who increasingly dislike competition: because they see competition as a bad thing or because they have experienced the bad things about competition, they may shy away from it and may choose to live and work in less competitive environments, thus achieving a higher level of happiness. This conclusion may be consistent with the “process-view” of competition, where competition is regarded as a conflict between companies or persons to achieve a specific goal. On the other hand, too much competition may lead to situations where people are
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36 Lee mas

Bundling, Vertical Differentiation, and Platform Competition

Bundling, Vertical Differentiation, and Platform Competition

This paper carries an important message for policymakers. Bundling is usu- ally considered anti-competitive and consequently detrimental to consumer wel- fare. However, when one of the markets involved is two sided, bundling may improve consumer welfare, largely because it promotes better internalization of the indirect network effects. Additionally, the positive feedback loop between the two sides amplifies the effectiveness of bundling in stimulating demands and makes the rival platform even more vulnerable, as bundling generates a tip- ping toward the bundling platform. Consequently, bundling can limit consumers’ choices. The mandated stand-alone sale of the superior complementary good with a price cap can improve social welfare. Related to Google’s anti-competitive behavior of bundling apps, I propose that giving competing apps equal access to Android pre-installation can improve social welfare. In light of the challenges of coordinating two-sided demands efficiently and increasing the level of choice available to consumers, I suggest that competition authorities scrutinize bundling practices involving two-sided markets in detail.
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23 Lee mas

Job matching, competition and managerial incentives

Job matching, competition and managerial incentives

Suppose that a new product market opens up in which the intensity of competition is ˆ m, and this firm intends to compete with the N existing firms in the market for managers. Given the restriction of one-to-one matching, only as many N pairs can be formed in the new equilibrium. It is easy to show that, if there are more firms than managers in the labor market, only the firms belonging to the N least competitive markets get matched in any equilibrium. Hence, the new equilibrium depends on the value of ˆ m. If this new firm faces more competition in the product market than any of the existing firms, then it will stay unmatched, and hence the equilibrium will remain the same as before. If the entrant faces less product market competition than at least one of the existing firms, then the new market equilibrium will be different from the old one. Suppose that ˆ m < m ′ ≡ sup { M }, where M is the set of incumbent firms. Then in the new equilibrium, entry will drive m ′ out of the market for managers. Otherwise, ˆ m can write a blocking contract with the manager who was matched with m ′ . The possibility of blocking implies that, in the new equilibrium, this manager has to be offered a higher compensation by the entrant firm, which is higher than that he was receiving in the old equilibrium. For the remaining of the managers, executive compensation will either improve or remain the same. Further, as a consequence of the rise in the payoff, bonus will be higher and managerial slack will be lower with each manager. Within the set of matched firms and managers, the matching may be assortative or non-monotone depending on the behavior of π (m) with respect to m.
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30 Lee mas

Assessing policy options for the EU cohesion policy 2014 2020

Assessing policy options for the EU cohesion policy 2014 2020

It is interesting to consider the matrix of thematic and geographical allocation from a political angle. Bachtler and Méndez (2007) made a careful assessment of the governance of EU cohesion policy at the start of the 2007-2013 round. They argue that the doubling of the funding in 1988 accompanying the single market initiative has been followed by largely unsuccessful attempts, at each review and renegotiation of the allocation and spending, to shift the decision power on the spending of the structural funds back to the Member States. In terms of geographical allocation, half of the funding continues to go directly to the less developed regions. The battle is mainly over the remaining part of the structural funds, and in particular the European Social Fund (ESF). On the proposal of the Commission, maximum co-financing rates have been set, which range from 50% for the most developed regions to 85% covered by the EU contribution from the Cohesion Fund. Some of these rates have been in- creased in response to the economic and financial crisis.
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30 Lee mas

Bank branching deregulation: a spatial competition model

Bank branching deregulation: a spatial competition model

Equilibria, which implies solving the game using backward induction. At the end of the game, investors choose the action that maximizes their utilities according to (1) or (2). In deciding the interest rates, banks anticipate the investors’ behavior. The competition between banks critically depends on whether bank 1 enters or not region B. Scenario I represents the sub-game in which bank 1 locates in A and bank 2 in B. Scenario II, on the other hand, represents a situation where bank 1 opens an office in region B. The following two subsections derive the Bertrand Nash Equilibrium and compare the solutions obtained in the two scenarios.
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22 Lee mas

TítuloEffects of competition on religious markets: some empirical evidence

TítuloEffects of competition on religious markets: some empirical evidence

This paper provides preliminary results as supporting evidence for the predictions that emerge from the economic approach that emphasises the relationship between a religious market structure and religious behaviour. In particular, the empirical outcomes reflect the existence of a causal and direct link between the level of competition in the religious markets and the levels of religious participation and commitment.

10 Lee mas

Metroview Sick Competition 2019

Metroview Sick Competition 2019

During the four months of this EPS project, our team learned a considerable amount about the different aspects of project management and working with people from different fields. Since the start of the semester every team member has been very invested in the project and everyone performed really well during each step of the product development process. Through the course of this project the team developed many new skills such as project, time and cost management, programming with LiDAR sensors, 3D modeling and printing and researching material resources. Every team member enjoyed working on the product because of the competition and this made us perform even better. The honorable mention (4t place) in the SICK innovation competition was a big surprise but it gave us recognition for the work we did.
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110 Lee mas

Culture, competition, and happiness

Culture, competition, and happiness

Conclusions beyond simple trends require information about the marginal effects of competition on happiness. The results for each ethnic group are shown in Tables 9a through 9c. Most of Asians and Whites (Tables 9a and 9c) who increasingly dislike competition feel less happy. Those who really dislike competition, however, show similar levels of happiness than those who think competition is good. The marginal effects indicate that less competitive-inclined Asians are around 6 to 8% happier than more competitive-inclined Asians. The figures for Whites are a bit different: they are around 4 to 7% happier. Blacks, however, are affected differently by competition: only those closer to more competitive- inclined individuals are significantly happier, but those who tend to think competition is harmful show no significant differences in self-reported happiness. Moreover, as we move down in the likeness of competition, individuals are marginally less happy: those closer to more competitive-inclined individuals increase their probability of being happy by more than 6% while those individuals in the third category increase that probability in only 5% and so on.
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34 Lee mas

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