Table of Contents

Horizontal Shareholding as an Antitrust Violation

Einer Elhauge, Harvard Law School

Monopoly Regulation Under Asymmetric Information: Prices vs. Quantities

Leonardo J. Basso, Universidad de Chile - Civil Engineering Department
Nicolas Figueroa, Pontificia Universidad Catolica de Chile
Jorge Vásquez, University of Wisconsin at Madison - Department of Economics

Analyzing Robinson-Patman

D. Daniel Sokol, University of Florida - Levin College of Law, George Washington University Law School Competition Law Center

E-Books: A Tale of Digital Disruption

Richard Gilbert, University of California, Berkeley

Centralizing Public Procurement and Competitiveness in Directive 2014/24

Ignacio Herrera Anchustegui, University of Bergen - Faculty of Law


ANTITRUST: ANTITRUST LAW & POLICY eJOURNAL

"Horizontal Shareholding as an Antitrust Violation" Free Download

EINER ELHAUGE, Harvard Law School
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Horizontal shareholdings exist when a common set of investors own significant shares in corporations that are horizontal competitors in a product market. Economic models show that such horizontal shareholdings are likely to anticompetitively raise prices when the owned businesses compete in a concentrated market. Recent empirical work not only confirms the prediction of these models, but also reveals that such horizontal shareholdings are omnipresent in our economy. I show that such horizontal shareholdings can help explain fundamental economic puzzles, including why corporate executives are rewarded for industry performance rather than just individual corporate performance, why corporations have not used recent high profits to expand output and employment, and why economic inequality has risen in recent decades. I also show that stock acquisitions that create such anticompetitive horizontal shareholdings are illegal under current antitrust law, and I recommend antitrust enforcement actions to undo them and their adverse economic effects.

"Monopoly Regulation Under Asymmetric Information: Prices vs. Quantities" Free Download

LEONARDO J. BASSO, Universidad de Chile - Civil Engineering Department
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NICOLAS FIGUEROA, Pontificia Universidad Catolica de Chile
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JORGE VĂ?SQUEZ, University of Wisconsin at Madison - Department of Economics
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We compare two instruments to regulate a monopoly that has private information about its demand or costs: fixing the price or the quantity. For each instrument we consider two mechanisms: sophisticated (screening menus) and simple (single menus). We characterize the optimal mechanisms for every instrument, and make between and within comparisons. The two instruments are equivalent when costs are unknown. When demand is unknown and marginal costs are increasing, the sophisticated price mechanism dominates that of quantity, whereas the simple price mechanism dominates that of quantity when marginal costs are decreasing. In the remaining cases each instrument can dominate.

"Analyzing Robinson-Patman" Free Download
George Washington Law Review, 2015 Forthcoming

D. DANIEL SOKOL, University of Florida - Levin College of Law, George Washington University Law School Competition Law Center
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The Robinson-Patman Act protects inefficient competitors rather than consumers. The possibility of a suit brought under Robinson-Patman increases the costs of efficient competitors. As such, Robinson-Patman shifts the benefit of antitrust from consumers to less efficient competitors. The Act is fundamentally in tension with contemporary antitrust policy. This article explores the history of Robinson-Patman, shifts in Robinson-Patman case law, and how the FTC may have aided (or not) the change in legal outcomes of Robinson-Patman cases.

"E-Books: A Tale of Digital Disruption" Free Download
Forthcoming, Journal of Economic Perspectives

RICHARD GILBERT, University of California, Berkeley
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E-book sales surged after Amazon introduced the Kindle e-reader at the end of 2007 and accounted for about one quarter of all trade book sales by the end of 2013. Amazon’s aggressive pricing led to allegations that e-books were bankrupting brick-and-mortar book booksellers. Amazon’s commanding position as a bookseller also raises concerns about monopoly power and publishers are concerned about Amazon’s power to displace them in the book value chain. I find little evidence that e-books are primarily responsible for the decline of independent booksellers. I also conclude that entry barriers are not sufficient to allow Amazon to set monopoly prices. Publishers are at risk from Amazon’s monopsony (buyer) power and they adopted agency pricing in an effort to promote retail competition and reduce Amazon’s influence as an e-retailer. Although challenged by the Department of Justice, agency pricing may yet prevail in some form as an equilibrium pricing model for e-book sales.

"Centralizing Public Procurement and Competitiveness in Directive 2014/24" Free Download

IGNACIO HERRERA ANCHUSTEGUI, University of Bergen - Faculty of Law
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Centralized purchasing benefits contracting authorities and society in general as it may reduce purchasing prices and transaction costs, lead to administrative economies of scale, and help specializing procurement officers across Member States. Centralization techniques are also used to pursue broader economic goals, such as fostering innovation, create competitive markets and sustain development. Directive 2014/24 reinforces the impulse given to central purchasing bodies due its popularity and establishes two different types: either wholesalers/wholebuyers or intermediaries that carry out procurement on behalf of other contracting authorities. However, the competitive benefits that may be generated by centralization can also be eroded by its abuse and inadequate implementation, particularly when dynamic efficiency is jeopardized by focusing on pure cost-saving and short term results. This paper addresses the benefits and concerns derived from centralized purchasing from a microeconomic and legal perspective and proposes that centralization should be carried out in a pro-competitive manner with an emphasis on long term efficiency, benefiting all stakeholders, and not purely tender cost saving. To do so, central purchasing bodies and their purchasing power should be regulated by adopting conducts in line with competitive standards and public procurement "best-practices" guaranteeing that buyer power is not abused and the competitive playing field is preserved.

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This eJournal distributes working and accepted paper abstracts dealing with all aspects of antitrust and competition policy, including mergers, cartels, monopolies, and price discrimination.

Editor: John Shepard Wiley, Independent

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Directors

ANTITRUST & REGULATED INDUSTRIES EJOURNALS

BERNARD S. BLACK
Northwestern University - School of Law, Northwestern University - Kellogg School of Management, European Corporate Governance Institute (ECGI)
Email: bblack@northwestern.edu

RONALD J. GILSON
Stanford Law School, Columbia Law School, European Corporate Governance Institute (ECGI)
Email: rgilson@leland.stanford.edu

Please contact us at the above addresses with your comments, questions or suggestions for LSN-Sub.

Advisory Board

Antitrust: Antitrust Law & Policy eJournal

JAMES R. ATWOOD
Covington & Burling

JONATHAN B. BAKER
Professor of Law, American University - Washington College of Law

MAXWELL M. BLECHER
Attorney at Law, Blecher and Collins

DENNIS W. CARLTON
Professor, University of Chicago - Booth School of Business, National Bureau of Economic Research (NBER)

FRANK H. EASTERBROOK
Senior Lecturer, University of Chicago Law School

NICHOLAS ECONOMIDES
Executive Director, Networks, Electronic Commerce, and Telecommunications Institute, Professor of Economics, New York University - Leonard N. Stern School of Business - Department of Economics

EINER R. ELHAUGE
Professor of Law, Harvard Law School

ELEANOR M. FOX
Professor of Law, New York University School of Law

HERBERT J. HOVENKAMP
Professor, University of Iowa - College of Law

LOUIS KAPLOW
Professor of Law, Harvard Law School, National Bureau of Economic Research (NBER)

DANIEL L. RUBINFELD
Professor, University of California at Berkeley - School of Law, National Bureau of Economic Research (NBER), NYU Law School

CARL SHAPIRO
University of California, Berkeley - Haas School of Business