Analysis Of Competitive Effects Research Articles

Effect of neighbouring perennials on cocoa tree pod production in complex agroforestry systems in Cameroon

Agroforestry systems (AFS) are gaining major interest in cocoa producing countries. However, the analysis of competition effects in multispecific complex agricultural systems remains a key lock-in preventing both (i) a thorough understanding of resource partitioning, and (ii) the co-design of spatial patterns and management of cocoa AFS (cAFS) minimising competition. We sampled 48 cAFS 1000 m² plots in Central Cameroon and used an individual based approach to analyse the effect neighbouring tree community composition had on coca tree pod production. First, we determined the distance up to which each neighbouring tree influenced the production of a given cocoa tree and checked for the significance and the magnitude of this effect. We then explored the trade-offs between cocoa tree production and the abundance of associated trees. Our results first underline a significant intra-specific competition within the cocoa tree populations studied, which would need to be thinned down to 800–1100 individuals per ha. We also found a general negative effect of associated trees kept or grown for their fruits (e.g. mango, traditional species, citrus trees). Those effects were stronger when the trees were positioned between 6 and 11 m away from the cocoa trees. These trees clearly impaired pod production, especially for small diameter cocoa trees. Palm trees, however, had a positive effect on cocoa pod production, with suitable densities modelled ranging from 0 to 240 individuals per ha. Finally, we found both positive and negative effects of associated forest trees on cocoa pod production, which varied with the distance separating them from the cocoa trees and the size of the cocoa trees. Overall, our analyses show that cocoa production in complex cAFS is influenced both by intra- and inter-specific interactions while it remains difficult to distinguish between potential intertwined effects and resource limitations.

How Soon Is Now?

Time matters for competition law on a number of dimensions. Most obviously, the time in which new products or technologies are introduced (dynamic efficiency) is of course one of the key benefits of competition, alongside allocative and productive efficiency. Time is also important for the assessment of competition law. Think, for example, of the speed with which a market clears; the period within which we expect harm to competition or efficiencies to occur; the pace of supply side substitution; the non-transitory nature of a SSNIP or SSNDQ; the length of a profit sacrifice; the time in which potential or indeed responsive entry might occur; the period for paying off a sunk investment; or the benevolent nature of temporary market power as opposed to persistent market power. Time also introduces uncertainty into competition law, particularly when the assessment relates to future events, such as the likely impact of a notified merger on market conditions. The longer the time-horizon for merger assessments, the larger the degree of uncertainty. Such prospective assessments often imply the balancing of probabilities by decision-makers, which are subject to substantive, evidentiary and practical constraints. This paper focuses on the time that separates existing competition from potential competition, the uncertainty and risk that this time difference creates, and the extent to which the timeframe for a competitive effects analysis allows for an examination (and weighing) of existing and potential competition considerations.

A Prospective Competitive Effects Analysis of the AT&T/Time Warner Merger

The vertical merger of ATT nor do they suggest that the proposed merger was likely to result in anticompetitive effects in video content production/distribution via customer foreclosure or collusion. Rather, the results support the government’s central theory of harm: namely, that the combination would unilaterally and credibly increase the bargaining leverage of the merged entity and thereby allow it to partially foreclose rival MVPDs by increasing their affiliate fees.

Antitrust After Big Data

With the rise of digital markets, the conventional wisdom was that big data was a new economic phenomenon that would allow incumbent firms with market power to entrench their market positions, foreclose competitors, and serve as a virtually insurmountable barrier to entry. This led to calls for greater antitrust enforcement and regulation of big data practices. Since that time, with the benefit of substantial growth in the theoretical and empirical economic literature involving big data, it is appropriate to revisit our understanding of big data’s implications for antitrust. This paper contributes to the discussion by detailing three things we have learned about big data as it applies to competition policy. First, we now have a better understanding of the role that big data plays in the production and innovation process. Second, it makes little sense to reflexively label big data as a barrier to entry. Competition policy is better served by considering actual entry conditions rather than basing competitive effects analysis on determining whether access to certain inputs are or are not barriers to entry. Third, competition authorities now have a sizeable level of experience in assessing big data in actual cases. It is notable that, thus far, big data alone has not fuelled a theory of harm that has led to an agency challenge in the U.S.A. or Europe. All these considerations suggest that we are perhaps in a new, more mature, era regarding big data in competition policy – not because big data is any less important to innovation – but because researchers and regulators have consistently found that big data in and of itself does not represent a relevant antitrust concern.

Competitive Impacts of Means-Tested Vouchers on Public School Performance: Evidence from Louisiana

Given the significant growth rate and geographic expansion of private school choice programs over the past two decades, it is important to examine how traditional public schools respond to the sudden injection of competition for students and resources. Although prior studies of this nature have been limited to Florida and Milwaukee, using multiple analytic strategies this paper examines the competitive impacts of the Louisiana Scholarship Program (LSP) to determine its achievement impacts on students in affected public schools. Serving 4,954 students in its first year of statewide expansion, this targeted school voucher program provides public funds for low-income students in low-performing public schools to enroll in participating private schools across the state of Louisiana. Using (1) a school fixed effects approach and (2) a regression discontinuity framework to examine the achievement impacts of the LSP on students in affected public schools, this competitive effects analysis reveals neutral to positive impacts that are small in magnitude. Policy implications are discussed.

The Competitive Effects of the Louisiana Scholarship Program On Public School Performance

Given the significant growth rate and geographic expansion of private school choice programs over the past two decades, it is important to examine how traditional public schools respond to the sudden injection of competition for students and resources. This article uses 1) a school fixed effects approach, and 2) a regression discontinuity framework to examine the achievement impacts of the Louisiana Scholarship Program (LSP). This targeted school voucher program has provided public funds for low-income students in low-performing public schools to enroll in participating private schools since the 2012-13 school year. The main findings of the competitive effects analysis reveal neutral to positive impacts that are small in magnitude. Effects are largest for students attending those public schools most affected by the competitive threat. Policy implications are discussed.

Evaluating Joint Ventures: Economic Analysis Checklist

This short article (for a symposium on joint ventures) provides practitioners and law professor with a 20 question checklist to guide the competitive effects analysis of the formation of a joint venture and the specific restraints and conduct of the venture. The questions mainly focus on ventures among actual or potential competitors, though some of the questions also are relevant for ventures involving complementary product firms. The questions concern potential competitive harms, potential competitive benefits, and the determination of net competitive effects. While this sequencing follows the standard burden-shifting formulation of the rule of reason decision process, the article notes that this sequencing should not be approached rigidly. A finding of a lack of efficiency benefits might suggest that the motivation of the JV is to achieve and exercise market power to the detriment of consumers, thereby supporting an inference of harm. Moreover, under a quick look to condemn standard, efficiency benefits are examined first, albeit with a possibly lower burden of proof placed on the venture to justify its formation and restraints.

Re-Aligning Prospective Hospital Merger Guidance: Moving Beyond Concentration to More Meaningful Approaches

Mergers and acquisitions play a key role in industries facing disruptive change and the need to restructure effectively to meet future needs; transactions provide potential opportunities for substantial benefits. Significant realignment of the U.S. healthcare delivery system is underway, driven by economic, policy, and demographic factors, with many hospitals, particularly stand-alone hospitals, financially challenged. The effects of these trends are most visible in smaller metro areas, which often have greater hospital capacity than required to meet demand. Over 500 hospital transactions have occurred in recent years; about half involved stand-alone hospitals, many in smaller communities. An anticipated increase in hospital transactions in the near term suggests the importance of clear agency guidance on the factors that will distinguish transactions that are likely to be challenged.Agency guidance about future enforcement on hospital mergers contrasts with actual enforcement practice. Guidance emphasizes concentration and Merger Guidelines thresholds, even though the vast majority of past hospital mergers, including most of those that exceeded Guidelines thresholds, went unchallenged. Academic price-concentration studies play a uniquely prominent role in statements of enforcement intentions in the healthcare industry, even though those studies are largely dated and mixed in their findings. Limited clarity exists on factors that mattered to competitive effects analysis in concentrated markets with closely reviewed yet unchallenged mergers. Moreover, the modeling used in hospital merger review may not account for current and evolving market realities of healthcare delivery and purchasing. This paper reviews healthcare delivery trends in the context of recommendations for competitive effects analyses and guidance in industries characterized by dynamic change, differentiated products, large numbers of mergers, and low incidence of actual challenges. It shows that, where concentration thresholds are poor predictors of competitive effects, greater clarity is required of the specific factors other than structure that yielded assessments that mergers in highly concentrated markets were unlikely to result in a substantial lessening of competition. The many changes in healthcare markets necessitate closer scrutiny of economic models to assure they are robust and reflect market realities, including the responsiveness of rivals and payors. Given the substantial reliance on academic studies for guidance, we review the oft-cited concentration-price literature and find that it does not support the claimed systematic quantitative relationship. We undertook independently to address these issues empirically by updating a major study using a comprehensive and current commercial claims database covering 380 metropolitan areas. We found no systematic quantifiable relationship; instead myriad market and firm specific factors account for price variation. Finally, we present some suggestions for review of future transactions.

Potential Competitive Effects of Vertical Mergers: A How-To Guide for Practitioners

The purpose of this short article is to aid practitioners in analyzing the competitive effects of vertical and complementary product mergers. It is also intended to assist the agencies if and when they undertake revision of the 1984 U.S. Vertical Merger Guidelines. Those Guidelines are out of date and do not reflect current enforcement or economic thinking about the potential competitive effects of vertical mergers. Nor do they provide the tools needed to carry out a modern competitive effects analysis. This article is intended to partially fill the gap by summarizing the various potential competitive harms and benefits that can occur in vertical mergers and the types of economic and factual analysis of competitive effects that can be applied to those mergers during the HSR review process. The analysis in the article also identifies several legal and policy issues that the agencies would consider when they undertake the process of revising the Vertical Merger Guidelines. The Appendix contains a listing and summary of the vertical merger cases challenged by the DOJ and FTC since 1994.

Competitive Effects Analyses of Hospital Mergers: Are We Keeping Pace with Dynamic Healthcare Markets?

The healthcare industry is undergoing significant realignment driven by economic, policy, demographic, and other factors. Merging parties and enforcement agencies desire frameworks that capture full merger effects including quality, benefits, and efficiencies and provide reliable competitive effects predictions grounded in market realities. Market structure measures alone have proven poor predictors of anticompetitive effects or enforcement activity. Competitive effects analysis must (and the current models do not) reflect the incentives, ability, and impact of insurers' responses to post-merger pricing with adjustments to incentives and network structure that can control provider market power without diminishing efficiencies. It is imperative to alter current models for these insurer incentives and the differentiated hospital reimbursement bids that result in lower costs of care delivery. More comprehensive analysis of merger benefits and impact of patient steering toward high value and cost effective care will enrich economic analysis of mergers and improve reliability of competitive effects predictions.

Obtaining Fruit and Vegetables for the Lowest Prices: Pricing Survey of Different Outlets and Geographical Analysis of Competition Effects

AimsInadequate fruit and vegetable (F&V) consumption is an important dietary risk factor for disease internationally. High F&V prices can be a barrier to dietary intake and so to improve understanding of this topic we surveyed prices and potential competition between F&V outlet types.MethodsOver a three week early autumn period in 2013, prices were collected bi-weekly for 18 commonly purchased F&Vs from farmers' markets (FM) selling local produce (n = 3), other F&V markets (OFVM) (n = 5), supermarkets that neighbored markets (n = 8), and more distant supermarkets (n = 8), (in urban Wellington and Christchurch areas of New Zealand). Prices from an online supermarket were also collected.ResultsA total of 3120 prices were collected. Most F&Vs (13/18) were significantly cheaper at OFVMs than supermarkets. Over half of the F&Vs (10/18) were significantly cheaper at nearby compared to distant supermarkets, providing evidence of a moderate ‘halo effect’ in price reductions in supermarkets that neighbored markets. Weekend (vs midweek) prices were also significantly cheaper at nearby (vs distant) supermarkets, supporting evidence for a ‘halo effect’.Ideal weekly ‘food basket’ prices for a two adult, two child family were: OFVMs (NZ$76), online supermarket ($113), nearby supermarkets ($124), distant supermarkets ($127), and FMs ($138). This represents a savings of $49 per week (US$26) by using OFVMs relative to (non-online) supermarkets. Similarly, a shift from non-online supermarkets to the online supermarket would generate a $13 saving.ConclusionsIn these locations general markets appear to be providing some substantially lower prices for fruit and vegetables than supermarkets. They also appear to be depressing prices in neighboring supermarkets. These results, when supplemented by other needed research, may help inform the case for interventions to improve access to fruit and vegetables, particularly for low-income populations.

Market Definition Is Not Alchemy

Harvard Professor Louis Kaplow, a well-known critic of market definition in antitrust, has recently suggested that market definition is a form of alchemy. As a pure proposition of logic, he claims that anticompetitive effects must be modeled directly. This analytical approach assumes the result by concluding quantitative analysis is always possible and thus dismissing qualitative analyses as unnecessary approximations of reality. However, Lerner analysis, at the core of Kaplow’s approach, is, at its core, a monopoly model and it is far from clear that the model can be broadly applied to competitive situations. Entry may control the competitive process and by construction, entry is excluded from a Lerner-style evaluation. Likewise, Lerner analysis excludes various collusion models. The Merger Guidelines, developed in light of the relevant court precedents, set out a two-stage merger review process, with market definition considered first to define the “playing field” for the analysis and then competitive effects studied through a review of a wide range of relevant facts. Quantitative analysis of competitive effects, while possibly relevant in some special case situations, does not address all the relevant possibilities in a manageable way. Thus, market definition remains an important tool for antitrust policy. It is not alchemy.

Merger Review in Technologically Dynamic Industries

In this article, we discuss some of the economic issues that arise in undertaking a competitive effects analysis in technologically dynamic industries such as mobile advertising.

Analysis of Competitive Effects of Attitudes toward Private Brand and National Brand on Purchase Intentions

Analysis of Competitive Effects of Attitudes toward Private Brand and National Brand on Purchase Intentions

MARKET DEFINITION AND UNILATERAL COMPETITIVE EFFECTS IN ONLINE RETAIL MARKETS

Although the basic principles used to define a relevant market or to analyze unilateral competitive effects in traditional retail settings also apply in online retail markets, several features of the online environment add complexities to the analysis. This paper examines some of the results in the economics and marketing literatures that can influence market definition and competitive effects analysis in online retail settings. I argue that a failure to account properly for certain aspects of online markets can lead to erroneous definitions of the relevant market and, more importantly, erroneous conclusions regarding the unilateral competitive effects of horizontal mergers.

Price Discrimination and the Cruise Line Industry: Implications for Market Definition, Competition, and Consumer Welfare

This article extends the price discrimination literature and applies it to market definition and competitive effects analysis in recent mergers in the cruise line industry. In that industry, short run output is fixed. If firms want to increase price and restrict output to price‐insensitive customers, they have to increase the output and lower price to the price‐sensitive customers. We show that with fixed output (1) it is in firms’ interest to engage in price discrimination, (2) firms have increased ability to engage profitably in price discrimination as the intensity of competition decreases, and (3) the average price of price‐sensitive and ‐insensitive consumers increase with reduced competition. Unlike the economists at the Federal Trade Commission, our analysis suggests that cruise lines engage in third‐degree price discrimination. Moreover, the cruise industry could be a separate market and a reduction in the number of competitors might raise average prices.

Analysis of Competition Effects in Mono‐ and Mixed Cultures of Juvenile Beech and Spruce by Means of the Plant Growth Simulation Model PLATHO

Inter- and intra-specific competition between plants for external resources is a critical process for plant growth in natural and managed ecosystems. We present a new approach to simulate competition for the resources light, water, and nitrogen between individual plants within a canopy. This approach was incorporated in a process-oriented plant growth simulation model. The concept of modelling competition is based on competition coefficients calculated from the overlap of occupied crown and soil volumes of each plant individual with the occupied volumes of its four nearest neighbours. The model was parameterised with data from a two-year phytotron experiment with juvenile beech and spruce trees growing in mono- and mixed cultures. For testing the model, an independent data set from this experiment and data from a second phytotron experiment with mixed cultures were used. The model was applied to analyse the consequences of start conditions and plant density on plant-plant competition. In both experiments, spruce dominated beech in mixed cultures. Based on model simulations, we postulate a large influence of start conditions and stand density on the outcome of the competition between the species. When both species have similar heights at the time of canopy closure, the model suggests a greater morphological plasticity of beech compared with spruce to be the crucial mechanism for competitiveness in mixed canopies. Similar to the experiment, in the model greater plasticity was a disadvantage for beech leading to it being outcompeted by the more persistent spruce.

THE POTENTIAL FOR SIGNIFICANT INACCURACIES IN MERGER SIMULATION MODELS

This paper considers the role that merger simulation models should play in European merger control. The use of these models, as off-the-shelf instruments to assess the economic effects of mergers, has become increasingly widespread in recent years. However, contrary to some claims, merger simulation models do not allow investigators to avoid much of the competitive effects analysis relating to the relevant economic market, nor do they necessarily provide more precision to merger control. Without understanding the limitations of such models and the circumstances under which they can and should be usefully applied, they may not just be useless, but dangerous in the sense of providing possibly spurious results with spurious claimed accuracy. This paper argues that any merger simulation models used should be “bespoke” models, rather than off‐the‐shelf models, but cautions that even bespoke models will frequently not be as useful as is often claimed. This is not to deny that there are occasions when well-constructed bespoke models are genuinely useful and do offer genuine improvements in merger control.

Trade Barriers and Antitrust Analysis

This paper examines several important barriers to trade and discusses how they interact with antitrust market definition and competitive effects analysis. It is shown that although various forms of tariffs reduce foreign firms static competitive significance, a tariff does not necessarily reduce their dynamic competitive significance. Moreover, the administration of antidumping duties in the U.S. may actually increase the dynamic competitive significance of imports. Finally, while quota can reduce foreign firms' static and dynamic significance, that does not mean the relevance of imports should be ignored. Nevertheless, the proper treatment of trade barriers in antitrust analysis has no a priori impact on whether a transaction or practice will be viewed as more or less anticompetitive.

“Pass-on” in Merger Efficiency Defence

Efficiency pass-on requirement has been traditionally regarded as one of the most controversial aspects of merger efficiency analysis. Theoretical studies on pass-on suggest that in the case of most oligopolies intermediate market shares lead to the greatest firm-level pass-on. This underlines the need to seriously recognise efficiency considerations in view of the “non-collusive oligopoly” interpretation of the EC Merger Regulation dominance test proposed in Commission’s Draft Merger Guidelines. At the same time, distilling the pass-on rate into workable guidelines in isolation from the whole competitive effects analysis is not only difficult, but also sub-optimal from an economic theory point of view. This article proposes a formalised conceptual framework of incorporating efficiency analysis into a merger review and then draws pass-on and general merger efficiency defence implications.