Reverse Payments and Risk of Bankruptcy Under Private Information

Abstract

In the pharmaceutical industry, a reverse payment (pay-for-delay) is a payment from an originator to a generic producer to delay her entry. In some recent cases, the US and EU antitrust authorities have banned these agreements per se, while in others they have used a rule of reason. This paper analyzes their dynamic effects and shows that a ban per se may reduce consumer surplus when the generic producer may go bankrupt and her financial situation is private information. Reverse payments are more beneficial when competition among few players is soft, the economy is in a downturn, and the period of drug usage after patent expiry is long. Results suggest that a rule of reason is more suited than a ban per se.     

对我国卡特尔民事责任问题的探讨

2007年我国出台了《反垄断法》,成为规制我国卡特尔等垄断行为的基本法律,其中第五十条规定使得卡特尔民事责任有法可依。但是单纯一个条款来规定民事责任显然势单力薄,我国立法采用了援引民法规定来解决民事损害赔偿问题,《反垄断法》在实施上必然存在与其他法律的协调。本文就卡特尔民事责任的作用、性质、承担责任的方式等方面进行思考,认为,卡特尔民事责任体现了反垄断立法上的私力救济,其实质上属于民事侵权责任,主要体现为补偿性的赔偿损失。     

Resource extraction by cartels facing constraints on cooperation

This paper considers a non-renewable resource cartel facing constraints on cooperation. Although different kinds of constraints are conceivable and some of them are also investigated, the analysis focuses on the case in which cooperation is restricted to sufficiently high quotas. This approach of imposing constraints on cartelization complements papers that assume exogenously when a monopoly ends (in particular Benchekroun, H., Gaudet, G., Van Long, N., 2006. Temporary natural resource cartels. Journal of Environmental Economics and Management 52, 663–674) in two aspects: an endogenous determination when the cartel breaks up and the consequence that it is impossible to shift resource sales between the two regimes.     

Cartel overcharges: Survey and meta-analysis

The article presents a novel meta-regression analysis of the size of cartel overcharges from a sample of more than 800 observations collected from a wide variety of published sources. The analysis of a subsample of 395 cartel episodes finds that duration, legal environment, and organizational characteristics of cartels explain variation in overcharge rates to a greater extent than the type of publication or the method of calculation. Overcharges tend to be significantly higher for durable international cartels. Secular decline is observed as antitrust-enforcement regimes have stiffened.     

Environmental policy and stable collusion: The case of a dynamic polluting oligopoly

We show that the imposition of a Markovian tax on emissions, that is, a tax rate which depends on the pollution stock, can induce stable cartelization in an oligopolistic polluting industry. This does not hold for a uniform tax. Thus, accounting for the feedback effect that exists within a dynamic framework, where pollution is allowed to accumulate into a stock over time, changes the result obtained within a static framework. Moreover, the cartel formation can diminish the welfare gain from environmental regulation such that welfare under environmental regulation and collusion of firms lies below that under a laissez-faire policy.     

Reply to Connor and Lande on Cartel Overcharges

John Connor and Robert Lande have written a detailed critique of my review article, “The Empirical Basis for Antitrust: Cartels, Mergers, and Remedies,” published in this Journal earlier in the year. Connor and Lande apparently misunderstand the purpose of my review article and some of my conclusions. This reply is intended to clear up some of the misunderstandings, and to shed light on an apparent disagreement.     

Comment on “The Empirical Basis for Antitrust: Cartels,Mergers, and Remedies”

In this journal, James Langenfeld critically reviewed four of the present authors’ articles that analyze the size of cartel overcharges and their antitrust policy implications. In this comment, we explain why we believe Langenfeld errs in his criticism of our work. In particular, this comment discusses the variation in research quality of the sources used to compile a large sample of historical cartel overcharges; the advisability of trimming outliers or large estimates from the sample; alleged publication bias; why our 25% median estimate is much more likely to be correct than the US Sentencing Guideline’s 10% presumption; and the implications of the average cartel overcharges results for optimal deterrence and antitrust policy.     

现实生活中的卡特尔组织(英文)

卡特尔组织是由竞争企业所构成的共谋联盟。企业通过在商品价格、产量和市场份额等方面订立协定而形成的同盟。本文将先阐述卡特尔组织的优点及其不稳定性,并运用保洁与联合利华的例子来分析卡特尔组织在现实生活中的稳定性。     

Endogenous formation of coops and cooperative leagues

The labor-managed Mondragon cooperatives in the Basque country, and La Lega coops concentrated in North Central Italy, are grouped into leagues that enable them to reap economies of scale in key services such as R&D, marketing and finance. These leagues are relatively rare and there are fewer than a dozen of them globally. We develop a game-theoretic model of league formation to capture some of the strategic incentives behind the formation of labor-managed cooperatives (coops) and their agglomeration into a league. We then compare these incentives with those of conventional profit-maximizing firms to organize into a league. The main result of this paper shows that a divergence in these incentives stemming from their organizational differences may lead to the formation of a league of firms but not one of coops. This turns out to be true even though the coop has lower costs of production and the existence of a coop league would have been socially efficient. Anticipating the non-existence of a coop league then creates a disincentive for individual agents to form coops in the first place. This explains the relative rarity of coops, competing individually or as a part of a league, with conventional firms in imperfect markets.     

Cartel pricing dynamics with cost variability and endogenous buyer detection

This paper characterizes collusive pricing patterns when buyers may detect the presence of a cartel. Buyers are assumed to become suspicious when observed prices are anomalous. We find that the cartel price path is comprised of two phases. During the transitional phase, price is generally rising and relatively unresponsive to cost shocks. During the stationary phase, price responds to cost but is much less sensitive than under non-collusion or simple monopoly; a low price variance may then be a collusive marker. Compared to when firms do not collude, cost shocks take a longer time to pass-through to price.