The Archives

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Prediction Markets & XM/Sirius

I had never heard of Intrade before.  Maybe I live in a hole. Let’s see here:  I’d love to short the bid for Dec. 07 if it wasn’t at zero.  No way I’d touch the 10 ask.  I think there’s over a 90% chance this goes into next year.  The bid/ask spread is so big for ... Prediction Markets & XM/Sirius

Easterbrook on False Positives

I recently came across a keynote speech by Frank Easterbrook (published at 52 Emory L.J. 1297 (2003)) where he discusses Type I errors in antitrust cases.  Easterbrook, of course, produced the fundamental insight for antitrust enforcement that competition itself constrained the costs associated with false negatives while false positives were likely to ripple throughout the ... Easterbrook on False Positives

Bundling Alert: Foie Gras Edition

This potentially anticompetitive bundling alert comes courtesy of Lynne Kiesling at the always wonderful Knowledge Problem.  Kiesling observes that the Chicago foie gras ban has resulted in restaurants bundling salad with foie gras. I take it that the bundle circumvents the ban. Apparently, this means that consumers who want their foie gras are now coerced ... Bundling Alert: Foie Gras Edition

Starbucks, Subway, and Antitrust

A few days ago, I posted a comment about Starbucks’ recent disclosure that its average per store traffic has gone down slightly even though overall profits have gone up. I suggested a number of explanations for these phenomena consistent with a story that consumer taste for the Starbucks product has not diminished. One of these ... Starbucks, Subway, and Antitrust

Franchising, Starbucks vs. Subway, and Promotional Services

Professor Bainbridge offers a correction to Keith’s Starbucks analysis by pointing out that Starbucks does not have franchisees. I don’t think the franchise/ franchisee distinction has much to do with Keith’s conclusion that whatever is going on is not an antitrust problem. But the Professor is on to a really cool question about franchising and ... Franchising, Starbucks vs. Subway, and Promotional Services

The Prediction Markets on XM/Sirius

Paul asks about the Vegas odds on XM/ Sirius merger approval.  Its not quite Vegas, but Intrade is offering contracts on merger approval on or before December 2007, March 2008, and June 2008.  They’re trading at 5, 50, and 70 respectively.   So Paul, any of those contracts look good to you?

ET Radio Merger Countdown

The countdown is on for the XM-Sirius merger decision! (I wouldn’t be optimistic that the “end of the year” decision target will stand.)  Former FCC Chairman Reed Hundt and Representative Rich Boucher (D-Va) have recently come out in favor of the merger.  As everyone knows, it’s all about market definition, baby!  I’m not a gambling man, but I’d love ... ET Radio Merger Countdown

The Speculation Economy (penned by GW Professor Larry Mitchell)

George Washington University Law School Professor Larry Mitchell’s new book, The Speculation Economy, is a worthwhile read, and anyone with an interest in corporate law, securities regulation, stock market evolution, the rise of big business, legal history, antitrust, and other related topics should consider putting the book on his or her holiday wish-list. More specifically, The ... The Speculation Economy (penned by GW Professor Larry Mitchell)

Starbucks Store Traffic and Nonexclusivity

Traffic at Starbucks shops open for 13 months or more is down one percent. Does this mean that the public is finally losing its appetite for Starbucks? Not necessarily. While traffic is down, profits are up. Thus a more likely explanation for the new data is the firm’s price increase last summer rather than a ... Starbucks Store Traffic and Nonexclusivity

Scrapping the Notion of Fiduciary Duties Owed to Shareholders

U of Chicago Law Professors Douglas Baird and M. Todd Henderson (my very smart, very tall law school classmate) recently posted a provocative paper on SSRN. The paper, Other People’s Money, contends that “the oft-repeated maxim that directors of a corporation owe a fiduciary duty to the shareholders” is an “almost-right principle that has distorted ... Scrapping the Notion of Fiduciary Duties Owed to Shareholders


Yet another major airline merger appears to be in the works: United and Delta. This calls for some antitrust analysis. A few months ago, Thom did a thorough job analyzing the antitrust aspects of AirTran’s proposed takeover of Midwest. The key point in Thom’s analysis was that assessment of an airline merger’s economic effects properly ... United/Delta

Over at The Conglomerate …

The Glom book club takes a look at Frank Partnoy’s “FIASCO” ten years later here and here.