Transaction costs and competition policy

This paper evaluates current antitrust policy in light of our current understanding of how transaction costs influence the ability of firms and consumers to deal with market power. The paper shows how the failure to consider transaction costs can lead to erroneous policy decisions. Many models employed today make simplifying assumptions about transaction costs that can lead to biased results in analyzing vertical and horizontal issues. The increased ability to monitor the effect of promotional behavior should cause us to reexamine whether free riding justifications, previously accepted as justifications for various vertical restrictions, still hold. Nash bargaining and Nash-in-Nash models raise concerns about the simplified assumptions assumed in which supposedly high transaction costs restrict the choice and form of the assumed competitive alternatives. The increasing importance of two-sided markets together with an understanding of transaction costs is needed to understand antitrust conduct in those markets. The recent Amex case is likely to lead to confused litigation in these types of markets. Finally, the establishment of property rights for a consumer to his or her data could fail to remedy antitrust concerns that certain dominant firms are immune to competition because consumers do not own their data unless that property right is limited so that consumers cannot exclusively sell their data to one firm.     

Promoting competition in the presence of essential facilities

This paper addresses how to use simple access pricing to promote entry in the presence of spillovers and essential facilities. An inherent dilemma is that the greater the spillover, the greater is the benefit of attracting good entrants but the harder it is to exclude low-quality entrants because they can free ride on the quality of good entrants. We show that the inability to discriminate between entrants has the effect of discouraging access prices that enable the low-quality entrant to enter, generates a time consistency problem, and provides incentives for good-quality entrants to limit their competitiveness.     

The impact of non-neutral federal regulatory policy on competition

We present a duopoly competition model to illustrate how the simultaneous incorporation of two US federal regulatory programs negatively affected telecommunications competition during the past decade. Our model shows that the simultaneous implementation of the Universal Service Fund policy that grants subsidies to incumbent telecommunications providers serving in high-cost areas, and the carrier of last resort policy that mandates incumbents to provide service in under-served geographic areas, deters competitive entry in low-cost markets and thereby runs counter to the objectives for which the policies were intended. This model provides a theoretical explanation of a failure of federal policy.     

Cable television and competition : Theory, evidence and policy

There is currently widespread discussion in the USA of the merits of amending legislation to allow competition in the cable television market, notably from the telecommunications companies. This article explores what economic theory can contribute to this debate, and adduces empirical evidence on the effects of competition in the cable market where it presently exists. The authors conclude that blocking entry into cable, and indeed into telecommunications markets, is likely to be poor policy, and that increased competition would foster the development of an efficient modern broadband network.     

On the role of empirical industrial organization in competition policy

In this paper I consider the role of empirical industrial organization (IO) in competition policy. In particular, I consider the effect of the institutional setting in which competition policy is developed on the diffusion of ideas and techniques emerging from the empirical IO literature. In doing so my aims are two fold. First, I aim to understand the areas of competition policy most likely to provide fertile ground for future work, and those which are less likely to have an impact. And second, I hope to make a small step towards ensuring that the important potential synergies between competition policy and empirical IO are more fully developed — to the benefit of both communities and, more importantly, the public. This paper necessarily draws heavily on my experience in the UK, but many remarks may resonate more generally.     

Global competition and EEC policy in telecommunications: An Italian perspective

Within the framework of increasing US and Japanese competition, an interpretation is given of the future development lines of European telecommunications. Europe is lagging behind in this sector; this is explained in terms of the subdivision of services at the national level and the fragmentation of industrial areas within the respective countries. The minimum basis for recovery should be the establishment of a common European base in the telecommunications sector. A European scenario is proposed with particular attention devoted to the Italian problems in restructuring and development.     

Korean telecom policy in global competition: implications for developing countries

United States efforts to open the Korean telecommunications market have been incessant and tenacious, to the extent that Korea is the only country to be twice designated by the US as a priority foreign country (PFC). Through major restructuring driven by the Korean government, the telecommunications infrastructure of Korea has been strengthened and expanded, and in the process has posed a threat to the US telecommunications industry. Thus, since the late 1980s, the Korean telecommunications industry has been monitored and threatened with trade sanctions by the United States Trade Representative, and all internal restructuring has been closely related to bilateral negotiations with the US, and multilateral negotiations in the Uruguay Round. Based on interviews with key Korean telecommunications personnel and analyses of public documents, this research examines the Korean telecommunications market, telecommunications policies relative to the US and WTO, and the recent economic crisis that has affected the stability of the industry. The paper also offers five major recommendations to government and industry policymakers, including a more active and positive stance toward liberalisation, the relinquishing by bureaucrats of their monopolistic power over policymaking, the securing of an open and transparent policymaking process, and, in relations with the US, and the mobilisation of regional and multilateral organisations to ensure fair competition in telecommunications.     

Japan's policy on monopoly and competition in telecommunications

Telecommunications policy in Japan is about to undergo a significant change in the field of domestic telecommunications services. A monopolistic policy has long been maintained - monopoly by the government for the first 80 years and monopoly by the NTT, a domestic common carrier, for the past 30 years. Now, however, a policy of competition is required to meet the needs of citizens and companies when confronted with the age of the information society. This article analyses the trend of past, present and future telecommunications policy in Japan in relation to monopoly and competition.     

Efficiency and competition: The reagan administration's legacy in merger policy

The full effects of the latest merger wave will not be evident for a number of years. Further, many forces other than the Reagan administration's permissive policy contributed to the surge in asset redeployment that characterized the 1980s. Nevertheless, the rationale for this policy should be evaluated as promptly as possible, since antitrust remains the nation's primary policy instrument for dealing with untoward effects of merger. Both empirical evidence and underlying theory contradict beliefs in the efficiency-enhancing character of most mergers and of the market for control. Several emerging and potential harmful effects are noted.     

以营销信息化 推进管理变革与创新

营销业务及管理的信息化，不仅是当前电网营销技术进步与创新的核心，而且是电网企业落实科学发展观、实现集约化经营的重要手段和工具，是实现管理创新、服务创新、文化创新的重要载体和推动力，也是南方电网公司实现“经营型、服务型、一体化、现代化的国内领先、国际著名企业”战略目标的重要支撑和保障。     

Platforms,systems competition,and innovation: Reassessing the foundations of communications policy

Focusing on the effects of policy on investment and innovation this paper examines whether the conceptual foundations of sector regulation are aligned with the current technological and economic conditions of advanced communications. One conclusion is that the prevailing theories and practices are only adequate if the policy challenge can be reasonably approximated as a static or steady-state problem but they may have serious shortcomings if this is not possible. The article proceeds with a review and critical examination of two approaches that could augment or possibly replace the traditional approach under conditions of dynamic competition—the theory of platform markets and systems approaches. Both frameworks model aspects of competition in interconnected systems in more detail and offer novel insights to inform communications policy in an era of continuous change. Nonetheless, important theoretical and implementation gaps remain that will require additional efforts by researchers and practitioners.     

The persistence of broadband user behavior: Implications for universal service and competition policy

In several markets, firms compete not for consumer expenditure but consumer attention. We examine user priorities over the allocation of their time, and interpret that behavior in light of policy discussions over universal service, data caps, and related policy topics, such as merger analysis. Specifically, we use extensive microdata on user online choice to characterize the demand for the services offered online, which drives a household's supply of attention. Our data cover a period of time that saw the introduction of many new and notable sites and new devices on which to access them. In our analysis, we assess “how” households supply their attention along various dimensions, such as their concentration of attention across the universe of sites and the amount of attention expenditure per domain visit. Remarkably, we find no change in “how” households allocated their attention despite drastically changing where they allocated it. Moreover, conditional on total attention expenditure, demographics entirely fail to predict our key measures of attention allocation decisions. We highlight several important implications, for policy and beyond, stemming from the persistence and demographic orthogonality of our novel attention measures.     

Mobile voice diffusion and service competition: A system dynamic analysis of regulatory policy

Dynamic behavior in mobile telecommunications markets is often the result of interactions between market actors. As the structure and dynamic complexity of such interactions tend to be difficult to identify, it is challenging for regulators to anticipate the effects of their policy decisions. This article uses system dynamics to evaluate the effect of technology harmonization and mobile number portability policies on mobile voice diffusion and service competition. This is realized by first modeling the endogenous feedback structure resulting in dynamic behavior in the mobile telecommunications market and then by configuring the model for retrospective simulations of the Finnish market. Based on the retrospective simulations, the effect of technology harmonization and mobile number portability policy decisions is analyzed and the usefulness of system dynamics is demonstrated.     

以计量认证为契机促进水环境监测工作发展

5年来 ,广东省水环境监测中心购置仪器设备投入 5 0 0多万元 ,实验室面积增加 80 0多m2 ,而且制定了今后 5年切实可行的发展规划 ,有不少经验值得兄弟单位学习 ,在 2 0 0 1年水利系统进行的 2 1家质检机构国家级计量认证复查换证评审中 ,水利部计量办公室认为该监测中心是最好的几家之一。主要体现在领导重视 ,组织得力 ,投资力度大 ,人员培训面广 ,总体水平实实在在的上了一个大台阶。钟秀英、林桂花的文章概括了该监测中心主要工作经验 ,现予刊登 ,以飨读者。     

International competition policy and telecommunications. Lessons from the EU and prospects for the WTO

The changes in the international telecommunications market are rapidly outgrowing the existing structure of regulation. Moreover the trends in the sector indicate that if the Most Favoured Nation (MFN) rule is to be viable some form of international competition policy is needed. This must tackle the difficult problems of market access, joint ventures and anticompetitive behaviour and most importantly prevent the different approaches to these problems leading to trade frictions, especially in the USA. Such rules have proved difficult, but not necessarily impossible, to develop as the stalled talks within the World Trade Organisation (WTO) have shown. The paper considers the possible relevance of developments within EU telecommunications regulation where a competition policy-led regime is emerging.     

Rice production in Thailand seen through a policy analysis matrix

This paper uses a policy analysis matrix, PAM, to study the comparative advantage of rice production in comparison with two legume crops in northeastern Thailand. After explaining the structure of PAM and some relevant parameters useful for policy analysis, it demonstrates how PAM can be constructed most compactly and logically using empirical data. It then conducts some sensitivity analyses to study the effects of price changes and externality on the comparative advantage of rice against its competitive crops.     

Divestiture requirements as a tool for competition policy: A case from the Swedish beer market

We investigate the effect of divestitures on prices and welfare following the Carlsberg–Pripps merger in the Swedish beer market. Both difference-in-difference estimation and simulations using a random coefficients logit model suggest that divestitures are important for dampening price increases. Prices of divested brands fall by around 3% and the predicted price increase for Carlsberg falls from 3 to 1.6% as a result of the divestitures. To guide practice on divestitures, we investigate the role of the recipient and the number and characteristics of the divested products by simulating post-merger outcomes for all relevant cases. We find that in this setting with large multiproduct firms, the competition authority's most effective means to dampen adverse post-merger outcomes are to aim for a small recipient firm and attain a large number of divested products. Enforcing larger divestitures in terms of market share and raising the average cross-price elasticity between the merging parties' divested and retained products strengthen the dampening effect further.