Paid to Stay Home? An Entirely Intended Consequence of the COVID-19 Stimulus
In an earlier TOTM post, we argued as the economy emerges from the COVID-19 crisis, perhaps the best policy would allow properly motivated firms and households to themselves balance the benefits, costs, and risks of transitioning to “business as usual.” Sometimes, however, well meaning government policies disrupt the balance and realign motivations. Our post contrasted ... Paid to Stay Home? An Entirely Intended Consequence of the COVID-19 Stimulus
Flattening the Curve without Squashing Society: Market Responses to COVID-19
The COVID-19 pandemic is changing the way consumers shop and the way businesses sell. These shifts in behavior, designed to “flatten the curve” of infection through social distancing, are happening across many (if not all) markets. But in many cases, it’s impossible to know now whether these new habits are actually achieving the desired effect. ... Flattening the Curve without Squashing Society: Market Responses to COVID-19
Buyback Backlash: Is the Ban Non-binding?
[TOTM: The following is part of a blog series by TOTM guests and authors on the law, economics, and policy of the ongoing COVID-19 pandemic. The entire series of posts is available here. This post is authored by Eric Fruits, (Chief Economist, International Center for Law & Economics).] The Wall Street Journal reports congressional leaders have agreed to ... Buyback Backlash: Is the Ban Non-binding?
Goodhart and Bad Policy
[TOTM: The following is part of a blog series by TOTM guests and authors on the law, economics, and policy of the ongoing COVID-19 pandemic. The entire series of posts is available here. This post is authored by Eric Fruits, (Chief Economist, International Center for Law & Economics).] Wells Fargo faces billions of dollars of ... Goodhart and Bad Policy
Inevitable Monopolies and More Maverick Madness
In antitrust lore, mavericks are magical creatures that bring order to a world on the verge of monopoly. Because they are so hard to find in the wild, some researchers have attempted to create them in the laboratory. While the alchemists couldn’t turn lead into gold, they did discover zinc. Similarly, although modern day researchers ... Inevitable Monopolies and More Maverick Madness
Fruits: Messy Mergers and Muddled Guidelines (Or, “Orange You Glad I Didn’t Say Banana?”)
[TOTM: The following is part of a symposium by TOTM guests and authors on the 2020 Vertical Merger Guidelines. The entire series of posts is available here. This post is authored by Eric Fruits (Chief Economist, International Center for Law & Economics and Professor of Economics, Portland State University).] Vertical mergers are messy. They’re messy ... Fruits: Messy Mergers and Muddled Guidelines (Or, “Orange You Glad I Didn’t Say Banana?”)
The Upsides of Collusion and Concentration
Conspiracies and collusion often (always?) get a bad rap. Adam Smith famously derided “people of the same trade” for their inclination to conspire against the public or contrive to raise prices. Today, such conspiracies and contrivances are per se illegal and felonies punishable under the Sherman Act. It is well known and widely accepted that ... The Upsides of Collusion and Concentration
Mr. Watson, I Want to See You … About Vertical Mergers and Price Regulation
Jonathan B. Baker, Nancy L. Rose, Steven C. Salop, and Fiona Scott Morton don’t like vertical mergers: Vertical mergers can harm competition, for example, through input foreclosure or customer foreclosure, or by the creation of two-level entry barriers. … Competitive harms from foreclosure can occur from the merged firm exercising its increased bargaining leverage to ... Mr. Watson, I Want to See You … About Vertical Mergers and Price Regulation
Private Antitrust: What Hipsters Can Learn from Hulk Hogan
Antitrust populists have a long list of complaints about competition policy, including: laws aren’t broad enough or tough enough, enforcers are lax, and judges tend to favor defendants over plaintiffs or government agencies. The populist push got a bump with the New York Times coverage of Lina Khan’s “Amazon’s Antitrust Paradox” in which she advocated ... Private Antitrust: What Hipsters Can Learn from Hulk Hogan
On the Antitrust Risks of Four to Three Mergers: A Case Study of a Potential ThyssenKrupp/Kone Merger
Today, Reuters reports that Germany-based ThyssenKrupp has received bids from three bidding groups for a majority stake in the firm’s elevator business. Finland’s Kone teamed with private equity firm CVC to bid on the company. Private equity firms Blackstone and Carlyle joined with the Canada Pension Plan Investment Board to submit a bid. A third ... On the Antitrust Risks of Four to Three Mergers: A Case Study of a Potential ThyssenKrupp/Kone Merger
Rising Concentration, Rising Prices: Not So Fast
Wall Street Journal commentator, Greg Ip, reviews Thomas Philippon’s forthcoming book, The Great Reversal: How America Gave Up On Free Markets. Ip describes a “growing mountain” of research on industry concentration in the U.S. and reports that Philippon concludes competition has declined over time, harming U.S. consumers. In one example, Philippon points to air travel. ... Rising Concentration, Rising Prices: Not So Fast
Vertical Mergers: Fast Food, Folklore, and Fake News
In the Federal Trade Commission’s recent hearings on competition policy in the 21st century, Georgetown professor Steven Salop urged greater scrutiny of vertical mergers. He argued that regulators should be skeptical of the claim that vertical integration tends to produce efficiencies that can enhance consumer welfare. In his presentation to the FTC, Professor Salop provided ... Vertical Mergers: Fast Food, Folklore, and Fake News
