T-Mobile Sprints to the Finish Line: States Demand a Do-Over
The Department of Justice announced it has approved the $26 billion T-Mobile/Sprint merger. Once completed, the deal will create a mobile carrier with around 136 million customers in the U.S., putting it just behind Verizon (158 million) and AT&T (156 million). While all the relevant federal government agencies have now approved the merger, it still ... T-Mobile Sprints to the Finish Line: States Demand a Do-Over
Merger Lore: Dispelling the Myth of the Maverick
There’s always a reason to block a merger: If a firm is too big, it will be because it is “a merger for monopoly”; If the firms aren’t that big, it will be for “coordinated effects”; If a firm is small, then it will be because it will “eliminate a maverick”. It’s a version of ... Merger Lore: Dispelling the Myth of the Maverick
Deadweight loss from no monopoly
The once-mighty Blockbuster video chain is now down to a single store, in Bend, Oregon. It appears to be the only video rental store in Bend, aside from those offering “adult” features. Does that make Blockbuster a monopoly? It seems almost silly to ask if the last firm in a dying industry is a monopolist. ... Deadweight loss from no monopoly
Telecom regulators: Don’t get rolled by Rewheel
Will the merger between T-Mobile and Sprint make consumers better or worse off? A central question in the review of this merger—as it is in all merger reviews—is the likely effects that the transaction will have on consumers. In this post, we look at one study that opponents of the merger have been using to ... Telecom regulators: Don’t get rolled by Rewheel
Boom, bust, and collusion: Does it really matter?
A recent working paper by Hashmat Khan and Matthew Strathearn attempts to empirically link anticompetitive collusion to the boom and bust cycles of the economy. The level of collusion is higher during a boom relative to a recession as collusion occurs more frequently when demand is increasing (entering into a collusive arrangement is more profitable ... Boom, bust, and collusion: Does it really matter?
Economies of scale in homeless camp cleanups with some fishy results
“Our City has become a cesspool,” according Portland police union president, Daryl Turner. He was describing efforts to address the city’s large and growing homelessness crisis. Portland Mayor Ted Wheeler defended the city’s approach, noting that every major city, “all the way up and down the west coast, in the Midwest, on the East Coast, ... Economies of scale in homeless camp cleanups with some fishy results
Drifting toward nonsense on EU vs. US competitiveness: The profits puzzle
A recent NBER working paper by Gutiérrez & Philippon has attracted attention from observers who see oligopoly everywhere and activists who want governments to more actively “manage” competition. The analysis in the paper is fundamentally flawed and should not be relied upon by policymakers, regulators, or anyone else. As noted in my earlier post, Gutiérrez ... Drifting toward nonsense on EU vs. US competitiveness: The profits puzzle
EU markets are more competitive than U.S. markets? Not so fast
A recent NBER working paper by Gutiérrez & Philippon attempts to link differences in U.S. and EU antitrust enforcement and product market regulation to differences in market concentration and corporate profits. The paper’s abstract begins with a bold assertion: Until the 1990’s, US markets were more competitive than European markets. Today, European markets have lower ... EU markets are more competitive than U.S. markets? Not so fast
Vapor products, smoking, and harm reduction policies: Recent blog posts
Over the past few weeks, Truth on the Market has had several posts related to harm reduction policies, with a focus on tobacco, e-cigarettes, and other vapor products: Vapor products, harm reduction, and taxation: More questions than answers for a young and dynamic product market Applying harm reduction to smoking The political economy of vaping ... Vapor products, smoking, and harm reduction policies: Recent blog posts
Vapor products, harm reduction, and taxation: More questions than answers for a young and dynamic product market
ICLE has released a white paper entitled Vapor products, harm reduction, and taxation: Principles, evidence and a research agenda, authored by ICLE Chief Economist, Eric Fruits. More than 20 countries have introduced taxation on e-cigarettes and other vapor products. In the United States, several states and local jurisdictions have enacted e-cigarette taxes. The concept of ... Vapor products, harm reduction, and taxation: More questions than answers for a young and dynamic product market
Amazon-Whole Foods: The Speculation Then, the Evidence Today
Carl Shapiro, the government’s economics expert opposing the AT&T-Time Warner merger, seems skeptical of much of the antitrust populists’ Amazon rhetoric: "Simply saying that Amazon has grown like a weed, charges very low prices, and has driven many smaller retailers out of business is not sufficient. Where is the consumer harm?" On its face, there was nothing about the Amazon/Whole Foods merger that should have raised any antitrust concerns. While one year is too soon to fully judge the competitive impacts of the Amazon-Whole Foods merger, nevertheless, it appears that much of the populist antitrust movement’s speculation that the merger would destroy competition and competitors and impoverish workers has failed to materialize.
E-cigarette taxation: Lessons from “sin taxes”
The Economist takes on “sin taxes” in a recent article, “‘Sin’ taxes—eg, on tobacco—are less efficient than they look.” The article has several lessons for policy makers eyeing taxes on e-cigarettes and other vapor products. Historically, taxes had the key purpose of raising revenues. The “best” taxes would be on goods with few substitutes (i.e., ... E-cigarette taxation: Lessons from “sin taxes”
