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Watch CELS on the Web
Posted on November 20, 2009If you cannot attend this year’s excellent looking (program here) Conference on Empirical Legal Studies, which is at USC Friday and Saturday, you can watch the webcast of the panels here. This is a pretty nifty addition to the conference and one that I appreciate as I’ll be missing it this year...
A Decision-Theoretic Rule of Reason for Minimum Resale Price Maintenance
Posted on November 18, 2009My latest working paper, which bears the same title as this post, is now available on SSRN. In the paper, I address the challenge created by the Supreme Court’s 2007 Leegin decision, which abrogated the 96 year-old rule declaring resale price maintenance (RPM) to be per se illegal...
New Federal Trade Commission Nominees Julie Brill and Edith Ramirez
Posted on November 17, 2009The President has announced his intention to nominate two new Federal Trade Commissioners: Julie Brill and Edith Ramirez. Brill comes from a State AG background (Vermont and most recently North Carolina). Ramirez was a partner at Quinn Emanuel whose bio suggests significant experience in litigating intellectual property and other commercial contract disputes.
PeaceHealth and De Facto Exclusive Dealing, Part III
Posted on November 13, 2009Josh’s thoughtful response (Bitchslap? Nah.) to my post criticizing the Ninth Circuit’s recent Masimo decision raises a number of important matters. I started to just submit a comment to Josh’s post, but then I figured a reply was post-worthy...
Is the Intel/AMD Settlement Illegal?
Posted on November 13, 2009So, AMD and Intel settled. Its a case we’ve covered here in significant detail. Terms haven’t been announced publicly. AAI has predictably argued that the settlement shouldn’t preclude further enforcement action from NY and the FTC...
Hedge Funds & The SEC
Posted on November 11, 2009Thanks so much to my new colleagues at Truth on the Market for inviting me to join an impressive group of scholars on a blog I have followed for many years now. Chairman Frank of House Financial Services has an interesting thought on how to prevent the next financial crisis...
Gelbach, Helland and Klick on Single Firm, Single Event Studies
Posted on November 11, 2009Larry Ribstein points to the new paper from Gelbach, Helland and Klick on Valid Inference in Single Firm, Single Event Studies. This is an important paper with implications for finance, securities litigation and antitrust where event studies are frequently used as economic expert evidence...
The UPS v. FedEx “bitchfight”
Posted on November 10, 2009Hilarious video from reason.tv. (HT: Luke Froeb)
Should PeaceHealth Apply to De Facto Exclusive Dealing Claims?
Posted on November 10, 2009Thom answers this question in the affirmative in his excellent post about the Ninth Circuit’s analysis in Masimo and is disappointed that the Ninth Circuit rejected the discount attribution standard as the sole test for Section 2 in favor of a separate inquiry as to whether the bundled discount arrangement resulted in a substantial foreclosure [...
Hayek and the Fall of the Wall
Posted on November 10, 2009As we reflect back on the remarkable events of twenty years ago, and as we witness more and more centralized economic planning in our own society, we should pause to remember what the fall of the wall revealed. Consider Alan Greenspan’s account (The Age of Turbulence, pp...
Oracle is nonplussed; the DOJ is . . . plussed?
Posted on November 09, 2009The European Commission has issued a Statement of Objections in response to Oracle’s proposed acquisition of Sun. The deal had already cleared the DOJ’s review. Oracle is none too happy about the development, issuing a strongly-worded statement...
Some Links
Posted on November 09, 2009Larry Ribstein on exempting small firms from SOX Bernie Sanders’ “Too Big to Fail, Too Big to Exist” Bill (but see here) More Professor Birdthistle on Jones v. Harris Michael Ward on the economics of H1N1 (here, here and here) Lots of blogging on the meat market — but I’ve seen nobody discuss what I thought was the most [...
As New York goes, so goes the FTC?
Posted on November 04, 2009The New York Times is reporting that New York’s attorney general, Andrew Cuomo, has filed an antitrust suit against Intel. According to the report, The New York move increases the chances that the F.T.C. will take action against Intel, according to a person who was familiar with the state?s investigation but was not authorized to discuss [...
The CFPA’s Effect on Consumer Credit and A Wager Proposal for Professor Levitin
Posted on November 04, 2009Professor Adam Levitin is not impressed by our prediction of the effect on consumer credit of the CFPA. Readers might recall that, using estimates from the literature on the effect of regulatory shocks on interest rates and of the long-term debt elasticity, we offered a (in our words) “rough calculation” of the “lower bound” of [...
Some Links
Posted on November 03, 2009Get your Jones v. Harris fix from (including reactions to oral argument) the Glom and Professor Bainbridge (my earlier thoughts on some economic aspects of the decision here and here) Kenneth Anderson has been a great addition to the Volokh Conspiracy Are Microsoft, Yahoo and Google really dropping support for Net Neutrality? Krugman attacks Mankiw for claim he [...
PeaceHealth Should Apply Even When a Bundled Discount Results in “De Facto” Exclusive Dealing
Posted on November 03, 2009The Ninth Circuit, whose PeaceHealth decision moved the law on bundled discounting in the right direction, recently issued another decision on bundled discounts. That decision, Masimo Corp. v. Tyco Health Care Group, L.P., threatens to limit PeaceHealth’s effectiveness...
Of Broken Windows and Broken Policy
Posted on October 30, 2009Today the Obama administration announced with great pride that its economic stimulus plan created or saved about 650,000 jobs. “Thank goodness!” reads the subtext. If not for all those new and protected jobs, the unemployment numbers would be really bad! It appears no one in the administration’s economic advisory team has heard of Frédéric Bastiat...
Rhetoric Versus Reality, Part II
Posted on October 29, 2009President Barack Obama, June 1, 2009: What we are not doing, what I have no interest in doing, is running GM. GM will be run by a private board of directors and management team with a track record in American manufacturing that reflects a commitment to innovation and quality...
Is Apple Dumb?
Posted on October 28, 2009The Economist seems to think so, relying on evidence from this new paper by Joel Waldfogel and Ben Shiller. Waldfogel and Shiller find that, relative to uniform pricing at $.99, alternative pricing schemes including two part tariffs and various bundling schemes could raise producer surplus by somewhere between 17 and 30 percent...
Welcome New TOTM Blogger Mike Sykuta
Posted on October 28, 2009TOTM is extremely excited to announce the latest addition to our team, Mike Sykuta. Readers might know Mike from his guest blogging stints at Organization and Markets. Or perhaps making Brad DeLong’s Hall of Honor. Mike joins J.W. Verret as the second addition to blog in the last week, and we hope to announce some [...
The War Against Affordable Books
Posted on October 28, 2009Last week Josh discussed the American Booksellers’ Association’s effort to get the Justice Department to pursue antitrust charges against Walmart, Target, and Amazon for engaging in a vigorous, consumer-benefiting price war. In today’s Boston Globe, Jeff Jacoby has a nice piece highlighting a bit more of the Association’s tortured logic...
Fix the Supply Side
Posted on October 27, 2009Do the Merger Guidelines need revision? No. Thanks for having me. OK. Yes–and market definition/market shares, and in particular the effective incorporation of supply-side effects, seem to me like the most pressing issues in need of attention. Judge Posner, in the first edition of his justly celebrated Antitrust Law, noted that market definition was an unfortunate means [...
“Standardizing” the Horizontal Merger Guidelines
Posted on October 27, 2009I?m confident that my esteemed colleagues, who have far more expertise about the merger guidelines than I, will offer all sorts of terrific ideas for revising the substance of the guidelines. While I would certainly advocate a few specific changes (i...
Herbert Hovenkamp on Revising the Merger Guidelines
Posted on October 27, 2009Yes, the Merger Guidelines should be revised; in particular: a. The discussion of concentration thresholds for collusion facilitating mergers must be aligned more closely with both recent case law and actual enforcement practices; otherwise they fail to provide guidance...
Let Sleeping Dogs…
Posted on October 27, 2009I feel no great urgency to revise the Guidelines. True enough, they’re more of an analytical thought experiment than an accurate description of how merger review takes place in the agencies, but who’s really fooled? Perhaps some business people think that the Guidelines are a computer program waiting for the introduction of the relevant data [...
Andrew Gavil on Revising the Merger Guidelines
Posted on October 27, 20091. Do the Merger Guidelines Need Revision? Yes. Conceptually, the current Guidelines incorporate multiple strands of intellectual and legal history with respect to merger analysis that have been layered one upon the other over time, but never effectively integrated...
Merger Guidelines Symposium Conclusion
Posted on October 27, 2009Thanks to all of our participants in the Merger Guidelines Symposium. We hope many of you, as well as our readers, will look back over the collected posts and engage in an ongoing dialogue in the comments over the many interesting ideas raised here. You will find all of the posts from the symposium by [...
Revisions to the Merger Guidelines: Above All, Do No Harm
Posted on October 27, 2009My sense is that there is no need to revise the DOJ/FTC Horizontal Merger Guidelines, with one exception. As Greg Werden points out, ?a thorough revision would take up to three years and occupy some of the agencies? best people for a total of more than two thousand hours...
Small Changes
Posted on October 27, 2009Chairman Leibowitz in his Fordham speech last month stated ?From my perspective, the current Guidelines do not explain clearly enough to businesses how the agencies review transactions.? Won?t that always be the case? In a specialized area of complex regulatory law, there is whatever guidelines an agency (or in our case agencies) will [...
Coming Soon: Day 2 of the TOTM Merger Guidelines Symposium
Posted on October 26, 2009The Day 1 posts are up and available. But we’re not done yet. We have seven more coming tomorrow from Dan Crane, Andy Gavil, Herbert Hovenkamp, Joseph Simons, Thom Lambert, Geoff Manne, Danny Sokol and Paul Yde. In the meantime, please peruse the first installment of posts and feel free to comment! Joe Farrell, Welcome from the [...
The Guidelines Should Be Revised to Reject the PNB Structural Presumption
Posted on October 26, 2009Yes, the Merger Guidelines should be revised. The Guidelines primary purpose is to “articulate the analytical framework the Agency applies in determining whether a merger is likely substantially to lessen competition.” While the Guidelines have been very successful in articulating a useful economic framework for analyzing mergers, their performance in terms of satisfying that goal has [...
Do the Merger Guidelines Need Revision?
Posted on October 26, 2009The merger guidelines should be revised, not only to provide clearer guidance, but because the current version makes it harder for the agencies to win cases when they do challenge a merger. The reason is that the guidelines often don?t fit actual agency practice or modern economic theory...
Dynamic Competition in Antitrust Law
Posted on October 26, 2009The Horizontal Merger Guidelines are the intellectual cornerstone of modern antitrust law, yet they contain little discussion of innovation or dynamic competition. Although the Merger Guidelines do not constitute law merely by virtue of their promulgation by the agencies, the courts previously have accepted the revised principles that the agencies have advocated...
Comments on Updating the Merger Guidelines
Posted on October 26, 2009Of course, the Merger Guidelines need to be updated. Except for efficiencies, they haven?t been updated in 17 years. Lawyers and economists with a regular antitrust practice may not require an update in light of their knowledge of the 2006 Commentary, speeches and agency experience...
Robert Gertner on Revising the Guidelines
Posted on October 26, 2009The stated purpose of the DOJ/FTC Horizontal Merger Guidelines is to ?reduce the uncertainty associated with enforcement of the antitrust laws.? The Guidelines have had limited success in achieving this goal. They generally succeed in two important dimensions and fail in one...
Merger Enforcement Without Market Definition?
Posted on October 26, 2009The Horizontal Merger Guidelines have brought discipline to the unruly world of merger analysis; but have also accommodated advances in our understanding of the myriad ways in which firms compete and how mergers affect such competition. However, in cases where there is better information about the effects of the merger than there is about the [...
Dennis Carlton on Revising the Merger Guidelines
Posted on October 26, 20091. Do the Guidelines need revision? The Horizontal Merger Guidelines have served a very valuable purpose by making horizontal merger analysis much more sensible than it was prior to the 1980s.There is much less disagreement about horizontal merger policy than there is about vertical antitrust policy so some vertical guidelines would be especially welcome...
Welcome From the Agencies
Posted on October 26, 2009I think this symposium is a terrific idea and thank Josh Wright for organizing it. As Chairman Leibowitz and AAG Varney said, we want to have as open a process as possible as we explore whether to update the HMG and, if so, how. There can hardly be a more open place for a symposium [...
Welcome to the Truth on the Market Merger Guidelines Symposium
Posted on October 26, 2009With the recent DOJ and FTC announcement that they will solicit public comment and hold joint workshops to explore the possibility of “updating” the Horizontal Merger Guidelines (”HMG”) in December 2009 and January 2010, the attention of the antitrust community has turned away from the heated Section 2 debates (the subject of our last symposium) [...
Learning to Love Insider Trading
Posted on October 24, 2009Today’s Wall Street Journal includes a terrific article explaining why insider trading should be deregulated. Following up on last week’s high-profile insider trading charges, George Mason economist Don Boudreaux, whose Cafe Hayek posts are essential reading, succinctly sets forth the deregulatory position (which was first and most famously articulated by Geoff’s dad, Henry Manne)...
American Booksellers Association Advances Bad Antitrust Argument, But Who Can Blame Them?
Posted on October 23, 2009The WSJ Reports that the American Booksellers Association has knocked on Christine Varney’s door at the Antitrust Division to complain about the new low prices resulting from the price war between Amazon, Target and Wal-Mart. The complaint? In a letter dated Oct...
Kenneth Feinberg Must Be Super Smart!
Posted on October 22, 2009Back during the days when socialism was all the rage among the intelligentsia, F.A. Hayek predicted that Soviet-style central planning was destined to fail because the central planners lacked access to, and couldn’t process, all the information needed to allocate productive resources efficiently...
REMINDER: TOTM Merger Guidelines Symposium
Posted on October 22, 2009Contributors: Please remember to get your submissions in by COB tomorrow, Friday October 23rd so that I can get them organized, formatted, and ready to go in a sensible order by Monday morning. I’ll do my best with anything that I receive after that time, but no promises...
Intellectual Property, Standard Setting, and the Limits of Antitrust
Posted on October 22, 2009[Cross-posted at TalkStandards.com, a blog devoted on standards and related issues] One of the most significant challenges facing competition policy today is defining the appropriate role of antitrust law within the context of intellectual property right licensing by standard-setting organizations (?SSOs?)...
Forget California. Command and control in spades at the Treasury
Posted on October 21, 2009Well, he warned us. But now that it’s here it sounds so incredible. Under the plan, which will be announced in the next few days by the Treasury Department, the seven companies that received the most assistance [from the various US government bailouts] will have to cut the cash payouts to their 25 best-paid executives by [...
Command and control in California. Shocking.
Posted on October 21, 2009In a move stupider even than Chicago’s foie gras and trans fat bans (on which see Thom here), California appears to be set to ban . . . wait for it . . . big TVs. Environmentalists, those growing enemies of freedom and common sense everywhere, are pushing the ban because large-screen TVs use a [...
Mark Your Calendars: TOTM Merger Guidelines Symposium
Posted on October 20, 2009Due to a reader interest and a larger than expected number of expected submissions, the Truth on the Market Merger Guidelines Symposium is now a two day event: Monday October 26th and Tuesday October 27th. Participants: Because we are are now spread out over a few more days, feel free to aim for the 300-500 word [...
Babies-R-Us and the Case Against a Presumption of Illegality for Retailer-Initiated RPM
Posted on October 20, 2009According to the Wall Street Journal, the FTC is investigating whether retailer Toys-R-Us has violated the antitrust laws by inducing certain manufacturers to set minimum resale prices for their products (i.e., to engage in resale price maintenance, or “RPM”)...
The Limits of Antitrust in the New Economy
Posted on October 20, 2009Josh and I have just posted a draft of our new article, The Limits of Antitrust in the New Economy. We’ll be presenting it at the Searle Center Research Roundtable on the 25th Anniversary of Frank Easterbrook’s essential article, The Limits of Antitrust, next week...
Response to Steve Salop on credit card antitrust
Posted on October 20, 2009Steve’s post responding to me and Josh on antitrust exemptions and buyer cartels raised a number of interesting issues. A few points in response: 1. Constantine’s book is quite a measured look at the case (not). I love how he risked everything — everything! — for the case...
Response to Comments on Antitrust Exemptions and Joint Monopsony Conduct to Countervail Monopoly Power
Posted on October 19, 2009In response to my first post on joint monopsony conduct to countervail monopoly power, Mike Ward raises the issue of justifying a merger among sellers on the basis that it will countervail alleged monopsony power. Labor unions have an antitrust exemption for just that purpose...
Brad DeLong’s head must have already exploded before he wrote this
Posted on October 19, 2009I have no intention of wading into the debate over the climate change chapter in Superfreakonomics. I’m sure you all know the controversy: Levitt and Dubner had the temerity to suggest that global warming was a huge problem, that we should look hard for really expensive solutions, and we need to do something...
TOTM Welcomes New Permanent Blogger J.W. Verret
Posted on October 19, 2009TOTM is very pleased to announce a new permanent member, J.W. Verret (George Mason). J.W. has been blogging at Volokh Conspiracy recently, but he’s been a guest over at The Conglomerate, and the Harvard Law School Corporate Governance Blog. Quite frankly, it would be difficult to miss him if you’ve been following the recent events [...
Should Antitrust Exempt Joint Monopsony Conduct to Countervail Monopoly?
Posted on October 19, 2009Geoff and Josh raise an interesting issue about collective market conduct by buyers. Suppose that a group of final consumers face a monopolist. Should the consumers be permitted to band together into an “association” to jointly negotiate a lower price from the monopolist? Some would say that such buyer “cooperatives” are permitted, whereas others would [...
Welcome TOTM Guest Blogger Steven C. Salop
Posted on October 18, 2009Steve Salop is a professor economics and law at the Georgetown University Law Center where he teaches antitrust law and economics and economic reasoning and the law. Steve’s work in antitrust economics pioneered what is now frequently referred to as the “Post-Chicago” approach...
Next Generation of Antitrust Conference Announcement
Posted on October 16, 2009Call for Papers The Next Generation of Antitrust Scholarship Conference NYU School of Law January 29, 2010 Co-sponsored by NYU School of Law, American Association of Law Schools ? Antitrust and Trade Regulation Section and the American Bar Association ? Antitrust Section Conference Co-organizers Harry First ? NYU School of Law Ilene Knable Gotts ? Wachtell, Lipton, Rosen & Katz Edward Cavanaugh ? [...
Announcement: TOTM Merger Guidelines Blog Symposium is Coming!
Posted on October 15, 2009In light of the DOJ/FTC announcement of workshops to explore possible revisions to the Merger Guidelines in December 2009 and January 2010, TOTM is organizing a symposium on the legal and economic issues associated with the Guidelines. In particular, we’ve asked a panel of a dozen or so of the leading antitrust lawyers and economists [...
What Am I Missing About Antitrust Exemptions?
Posted on October 15, 2009Geoff mentions the pending bills on the Hill that would grant merchants an antitrust exemption to negotiate interchange fees. The insurance industry exemption has also been in the news of late in the wake of the Democrats’ threats of repeal. Here’s what I’m puzzled about...
Don’t kill interchange fees
Posted on October 15, 2009Speaking of Josh’s co-author, David Evans, David just testified the other day before the House Financial Services Committee on a bill, the Welch Bill, HR 2382, that would regulate the fees banks charge to each other to process credit card payments...
Mathematical Elegance is Not Economics: Another Implication of the Nobel Prize in Economics?
Posted on October 14, 2009Lots of good reactions to the Nobel for interested readers. This post from Lynne Kiesling and this from Peter Klein (Williamson’s last student) are a good place to start as is just about anything over at Organizations and Markets the last few days...
Don’t Kill Credit
Posted on October 14, 2009My co-author on this paper on The Effect of the CFPA Act of 2009 on Consumer Credit, David Evans, has a great post over at Catalyst Code on the importance of access to consumer credit during tough financial times. Here’s the key paragraph: Unfortunately, an awful lot of the proposals that are being floated in Washington [...
GMU’s JW Verret at Volokh on Treasury Inc.
Posted on October 14, 2009My colleague JW Verret is blogging over at Volokh on his new paper Treasury, Inc.: How the Bailout Reshapes Corporate Theory and Practice. Here’s an excerpt from his first post to get you started: Most of the debate over the bailout has been whether we should have bailed out the finance and automotive sectors in the [...
Not From the Onion
Posted on October 13, 2009Good news. The incoming German government under new Chancellor Angela Merkel says that it is doesn’t plan to “go wild” breaking up companies under the stronger antitrust laws it is considering. See. Nothing to worry about.
Nobel to Ostrom and Williamson (WITH UPDATES)
Posted on October 12, 2009Excellent choices. Congratulations to Elinor Ostrom and Oliver Williamson in a prize for economic governance, the former for the commons and the latter for the boundaries of the firm! A prize aimed at the economics of institutions and governance, the theory of the firm, and work that has been important for law and economics generally [...
Will the Public Insurance Plan Be a Predator?
Posted on October 08, 2009Wall Street Journal columnist Thomas Frank inhabits a simple little world in which private enterprise, in its relentless pursuit of profit (i.e., charging more for something than it?s worth), is consistently a force for evil, and government, populated by wise and benevolent folk who have eschewed riches in favor of public service (see, e...
Evans and Wright on The Effect of the CFPA Act of 2009 on Consumer Credit
Posted on October 08, 2009David Evans (University of Chicago; University College of London) and I have posted to SSRN our draft, The Effect of the CFPA Act of 2009 on Consumer Credit. Here’s the abstract: The U.S. Department of the Treasury has submitted the Consumer Financial Protection Agency Act of 2009 to Congress for the purpose of overhauling consumer [...
Nobel Odds
Posted on October 08, 2009Looks like my perennial Alchian, Demsetz & Klein UCLA trio prediction didn’t make the list, though I see several candidates who would be honored for contributions in the theory of the firm, property rights or transaction costs. Announcements Monday...
What’s Wrong With the Endowment Effect?
Posted on October 06, 2009Gordon Smith asks the question in response to a 16 part post (with slides and pictures!) from John Carney offering up the explanation that the behavioral economists have overclaimed and that “the Endowment Effect may really be a response to the counterparty risk faced by early humans...
The Economics of Judicial Salaries: Justice Roberts v. Judge Judy
Posted on October 06, 2009A commentator observes that the salary disparity between Chief Justice Roberts (roughly $220,000) and Judge Judy (roughly $25 million) is the “result of markets” and asks the following question: “is there any reason to assume that simply because the market has delivered that outcome, that Judge Judy deserves to make 100 times more than Chief [...
AALS Exercises Its Market Power
Posted on September 30, 2009Professor Bainbridge reports. Hmmm….Possible market power, deceptive conduct, and increase in prices? Just saying.
Tragedies of the Gridlock Economy at George Mason University Information Economy Project
Posted on September 30, 2009My colleague Tom Hazlett and his Information Economy Project at GMU is putting on a wonderful conference this week. The public event is a debate between Michael Heller and Richard Epstein on the Gridlock Economy. Following that event is an academic conference including: Harold Demsetz, Michael Meurer, F...
A bright spot in the bleak financial industry regulatory firmament
Posted on September 30, 2009Between the various power grabs and dubious regulatory proposals (each more dubious than the last!) from the likes of Geithner, Bernanke, Frank (.pdf), Dodd, etc., etc. you’d be excused for thinking the financial news from Washington (remember when financial news used to come from New York?) was all bad and growing only worse...
The NFL and the Theory of the Firm
Posted on September 28, 2009Some serious reading first on American Needle, Inc. v. National Football League, No. 08-661 (U.S. S. Ct.): The FTC/DOJ Amicus brief in James Keyte and Paul Eckles (Skadden) on Sports Leagues and the Rule of Reason Chris Sagers in the Antitrust Source Michael McCann (Vermont Law School) forthcoming in the Yale Journal on the sports law implications of the [...
Coming Soon: New Merger Guidelines
Posted on September 22, 2009The possibility of new Merger Guidelines has been much discussed in the antitrust community, particularly in light of appointment of the two new chief agency economists, Carl Shapiro and Joe Farrell, who have done substantial work on the economics of horizontal mergers and market definition...
Merger Guidelines Reading
Posted on September 22, 2009Volume 16, Issue 4 of the George Mason Law Review (which I received in my mailbox today) has a well timed issue from its antitrust symposium featuring several articles on revisions to the Merger Guidelines. Especially recommended is DOJ economist Greg Werden’s article here, which usefully sets the stage for some of the important debates...
Antitrust to Protect “Small Dealers and Worthy Men”?
Posted on September 22, 2009As I skimmed through the White House White Paper on innovation (HT: Patently-O), I noticed that a repeated theme in the document is that US innovation policy must “Promote Competitive Markets that Spur Productive Entrepreneurship” (e.g., p...
Chicago Public Radio on Price-Fixing
Posted on September 21, 2009The Chicago Public Radio series “This American Life” has an installment on price-fixing that antitrust buffs might be interested in (HT: former student Jan Rybnicek). The series features an interview with Kurt Eichenwald, author of the Informant, the book now turned movie (featuring Matt Damon) centering around the Archers Daniel Midland price-fixing conpsiracy.
Wright & Zywicki on the Consumer Financial Protection Agency Act of 2009
Posted on September 19, 2009I noted last week that my colleague (and Volokh Conspirator) Todd Zywicki and I had written an essay, published in a Fin Reg 21 Symposium on the Consumer Financial Protection Agency Act of 2009, on “Three Problematic Truths About the Consumer Financial Protection Agency Act of 2009...
Searle Antitrust Economics and Competition Policy Conference
Posted on September 19, 2009If you’re in Chicago next week, and even if you’re not, go check out the Second Annual Searle Center Antitrust Economics and Competition Policy conference at Northwestern University School of Law. The conference will take place September 25th and 26th and has a great lineup including a pretty good mix of theory and empirics...
How Competitive Is the Health Insurance Market, Really?
Posted on September 19, 2009Not very, according to the President in his recent health care speech, making the case that lack of competition and for-profit monopolists are what ails the health care market: “Consumers do better when there is choice and competition. Unfortunately, in 34 states, 75% of the insurance market is controlled by five or fewer companies...
The Economic Benefits of Secrecy
Posted on September 19, 2009The ABA Journal (HT: Steve Salop) has an interesting item suggesting that Jones Day’s policy of keeping compensation secret might be paying dividends in a tough economic climate: Jones Day?s secrecy surrounding compensation may be aiding its rapid expansion in the San Francisco Bay area...
President Obama, the Consumer Financial Protection Agency, and Consumer Choice
Posted on September 14, 2009My colleague Todd Zywicki and I have a piece out in Lombard Street today on the proposed new Consumer Financial Protection Agency. The issue has a number of contributions from proponents and critics of the new agency. The piece is well timed, with President Obama making the case for the CFPA in his Wall Street [...
Economic Illiteracy of the Week
Posted on September 12, 2009Comes by way of US Trade Representative Ron Kirk defending the protectionist White House move to impose a 35% tariff on imported Chinese tires as … wait for it … well, just read for yourself: The three-year remedies, consisting of an additional tariff of 35 percent ad valorem in the first year, 30 percent ad valorem [...
Onion: Apple Works on Novel iPhone Lock-In Strategy
Posted on September 09, 2009Rewarding loyal consumers with a product they can really believe in: “I am proud today to introduce to those who really, truly deserve it, our most incredible iPhone yet,” announced Apple CEO Steve Jobs, extending his seemingly empty left palm toward the eagerly awaiting crowd...
Professor Werner Z. Hirsch (1920-2009)
Posted on September 08, 2009I worked for Professor Hirsch as a graduate student working my way through the economics and law programs at UCLA. We wrote an article together on the law and economics of regulatory takings before the antitrust bug had taken hold of me. I’ve still got a draft somewhere, I think...
Zingales on Capitalism After the Crisis
Posted on September 08, 2009A very, very good essay. The whole thing is very much worth reading. I suspect the concluding three paragraphs will get the most attention: We thus stand at a crossroads for American capitalism. One path would channel popular rage into political support for some genuinely pro-market reforms, even if they do not serve the interests of large [...
Shouldn’t I Just Be Happy My Name is Spelled Correctly?
Posted on September 08, 2009I’m not generally a big fan of blogging to complain about law reviews or the way that my work has been interpreted by others. I’m generally of the view that the risk of having my work misinterpreted within a reasonable range is my own to bear, and that if it happens, it’s probably due to [...
Zywicki on the Consumer Financial Protection Agency on Reason TV
Posted on September 02, 2009Available here.
Antitrust, Multi-Dimensional Competition, and Innovation: Do We Have an Antitrust-Relevant Theory of Competition Now?
Posted on September 02, 2009My essay on economics, innovation, and antitrust, forthcoming in Manne & Wright’s forthcoming volume on Regulating Innovation: Competition Policy and Patent Law Under Certainty (introductory chapter available here), is now available on SSRN...
Kobayashi and Wright on Antitrust Aspects of Intellectual Property and Standard Setting
Posted on September 02, 2009[REPOSTED BECAUSE SSRN LINK INACTIVE EARLIER, CHAPTER IS NOW AVAILABLE FOR DOWNLOAD] Bruce Kobayashi and I have posted our forthcoming chapter, Intellectual Property and Standard Setting, in the forthcoming ABA Antitrust Section Handbook on the Antitrust Aspects of Standard Setting...
Pioneers of Law and Economics — Available Now
Posted on September 01, 2009Pioneers of Law and Economics, a volume I edited alongside my colleague Lloyd Cohen, is now available at the Elgar Website. I’m very happy with how the book came out in large part because of the fantastic group of contributors who agreed to take on chapters, including: Harold Demsetz, Nuno Garoupa and Fernando Gomez-Pomar, Mark [...
International Signals: The Political Dimension of International Competition Law Harmonization
Posted on August 31, 2009Seth Weinberger and I have a new article up at SSRN injecting some IR theory into the debate over international antitrust law. Abstract: The article, written jointly by a law professor and political science professor, endeavors to explain why the United States is particularly resistant to various efforts at international harmonization of antitrust law...
Regulating Innovation: Competition Policy and Patent Law Under Uncertainty
Posted on August 28, 2009Later this year Josh and I have an edited volume with the above title coming out with Cambridge University Press. The list of contributors is phenomenal, including: Bob Cooter Vincenzo Denicolo Richard Epstein Luigi Franzoni Damien Geradin Keith Hylton Marco Iansiti Scott Kieff Bruce Kobayashi Haizhen Lee Stan Leibowitz Mark Lemley Doug Lichtman Steve Margolis Mike Meurer Adam Mossoff Greg Richards Greg Sidak Henry Smith Dan Spulber David Teece Josh Wright Our introductory essay, available here, discusses the [...
Some Links
Posted on August 27, 2009Alex Tabarrok reviews economic growth textbooks and recommends this one Ribstein on the proxy access battles Private antitrust litigation is increasing quickly (picture here) — I’m setting the over/under for 2010 at 1600 cases Steve Salop on the appropriate Section 2 rule of reason standard for refusal to deal and price squeezes by unregulated, vertically integrated monopolists Some economics [...
Armen Alchian, Harold Demsetz and Ben Klein Should Win the 2009 Nobel Prize in Economics
Posted on August 25, 2009With the start of the school year comes another fall tradition here at TOTM: Nobel speculation. More specifically, every fall I yell from the rooftops that some combination of Armen Alchian, Harold Demsetz and Ben Klein should win the award. In 2006, I argued that the UCLA trio outperformed the more conventionally wise trio of [...
Kobayashi and Wright on Antitrust Issues in Intellectual Property & Standard Setting
Posted on August 25, 2009Bruce Kobayashi and I have posted our forthcoming chapter, Intellectual Property and Standard Setting, in the forthcoming ABA Antitrust Section Handbook on the Antitrust Aspects of Standard Setting. It offers an analytical overview of the antitrust issues involving intellectual property and standard setting including, but not limited to, patent holdup, royalty stacking, refusals to license, [...
Another Way DOJ Might Pursue “Vigorous Antitrust Enforcement in This Challenging Era”
Posted on August 24, 2009DOJ’s top antitrust enforcer Christine Varney had hardly gotten settled in her office before she repudiated the existing DOJ guidelines on policing single-firm conduct. In the spirit of Rahm Emanuel’s famous “never let a serious crisis go to waste” directive, Ms...
Jones v. Harris and Some Ramblings on Burdens of Proof, Empirical Evidence, and Behavioral Law and Economics
Posted on August 21, 2009Much has been made about the importance of Jones v. Harris as a battle in the ongoing war between behavioral economics and rational choice/neoclassical framework (see, e.g. the NYT). If the case if to be about the appropriate economic methodology or model for assessing legal questions, it is definitely an interesting turn to have Judge [...
Results Not Typical
Posted on August 21, 2009Apparently, under the proposed changes to the FTC advertising guidelines, a “results not typical” disclaimer for consumer endorsements representing a non-typical experience will no longer be sufficient on the grounds that those types of disclaimers have not been sufficient in deterring deception...
An Addendum on Jones v. Harris in Response to Professor Birdthistle: Ex Ante Competition, Cognitive Biases and Behavioral Economics
Posted on August 21, 2009Professor Birdthistle has a very thoughtful reply to my earlier post over at the Conglomerate on Jones v. Harris and behavioral economics. I thank Professor Birdthistle for his reply. I’ve learned a great deal about Jones v. Harris from reading his posts at the Conglomerate and have no doubt that I’ll learn more from this [...
The optimal level of risk is not zero
Posted on August 19, 2009I have said it before and I’ll say it again: All of this hand wringing over executive compensation seems to exist in a parallel world where corporate executives have no risk aversion, where there is no real competition for managerial talent, and where firms can only take on too much–never too little–risk...
BU Antitrust Conference Honoring Professor Joseph Brodley’s Retirement
Posted on August 19, 2009Professor Joe Brodley, after a long and distinguished career as an antitrust scholar, retired at the end of the Spring 2009 semester. Boston University Law School will host a symposium honoring Joe?s contributions to Antitrust on September 18, 2009. The Boston University Law Review will publish the contributions...
Thaler’s Unsound Argument About the Public Insurance Option
Posted on August 19, 2009University of Chicago economist (and behavioralist doyen) Richard Thaler thinks “the question of whether a ‘public option’ should be part of the health care solution” is just “one big distraction.” In Sunday’s New York Times, Thaler argues that the debate over the public option is a “red herring” if, as President Obama insists, the [...
Some Links …
Posted on August 18, 2009There was a lot of backdating … yawn… oh, and Brett Favre is coming back The WSJ editorial page thinks the liberal boycotts of Whole Foods in response to CEO John Mackey’s op-ed on health care reform won’t have any real effects because because “real protest would require the store’s hyperprogressive customers to withdraw forever from [...
The New Issue of Antitrust Source
Posted on August 14, 2009Is available here. In this issue Chris Sagers considers the future of Section 1 in light of the Supreme Court’s possible action in American Needle. Continuing our focus on China, this issue features an article by Nate Bush that examines merger enforcement activity under that country’s year-old Antimonopoly Law...
Questioning the UK Competition Commission Ombudsman Plan
Posted on August 12, 2009In April 2008, the UK Competition Commission issued its Final Report culminating from its grocery sector inquiry. Along with supermarket concentration, the concern that emerges out of that Report is that supermarkets will use their power to negotiate sharp deals with suppliers...
EU Intel Fines Attract Rebuke
Posted on August 11, 2009I’ve criticized the European Commission’s antitrust attack against Intel here and the resulting $1.44 billion fine. Now the EU is drawing fire for allegedly burying testimony, or at least failing to record it in a satisfactory manner, from Dell that it chose Intel’s chips not because of the coercive force of any of Intel’s rebates [...
Antitrust Anachronism? Randy Picker on the Microsoft-Yahoo Search Deal
Posted on August 09, 2009I recently commented on Gordon Crovitz’s WSJ column on the Microsoft-Yahoo deal arguing that antitrust was simply too cumbersome to deal competition issues in dynamic markets like search. A short version of my take was that these concerns are often overstated in the areas of cartels and even sometimes in merger enforcement — but have [...
FTC Office Policy and Planning Fights for Competition in the Dental Services Market
Posted on August 07, 2009Having just had four wisdom teeth pulled this morning at age 32, about ten years after the dentist first recommended it, the dental services market is on my (anesthesia fogged) mind this afternoon. But it reminded me of a post I wanted to write highlighting the efforts of the FTC Office of Policy and Planning [...
Trends in Protectionism
Posted on August 06, 2009Here’s a troubling paragraph from Chad Bown’s WSJ op-ed: The count of newly imposed protectionist policies like antidumping duties and other ?safeguard? measures increased by 31% in the first half of 2009 relative to the same period one year ago, which itself is not an alarming number...
The EU’s Bass Ackward Approach to Evaluating Mergers
Posted on August 04, 2009As American antitrust regulators hurdle headlong toward a Europeanized (i.e., competitor-focused) antitrust, I do hope they will at least avoid the tack the EU has taken in evaluating Lufthansa’s proposed takeover of Austrian Airlines. The Wall Street Journal is reporting that EU Antitrust Chief Neelie Kroes has directed her subordinates to draft a “conditional [...
Antitrust, Obsolescence and the “New Economy” (Again)
Posted on August 04, 2009Gordon Crovitz (WSJ) plays the new economy card on antitrust. Its a familiar wrap for those in the antitrust community that hit its peak in the original Microsoft days with virtually every competition policy scholar and commentator chiming in with an opinion about whether the internet and network effects and so forth rendered antitrust obsolete...
FTC on the CFPA
Posted on August 03, 2009Commissioners Rosch and Kovacic of the Federal Trade Commission come out against the proposed CFPA. Both emphasize the risk of shifting consumer protection authority away from an agency with substantial expertise in the area (including the Bureau of Economics which has an excellent record of reports and publications in this area) to an unproven agency...
Moneyball, GMU and the Future of Law and Economics
Posted on July 29, 2009My colleague Ilya Somin insightfully defends against allegations of the death of Moneyball in baseball and legal academia — largely making the point that larger institutions with larger payrolls imitating the successful elements of the strategy...
Chicago, Neo-Chicago and Chicago Squared: A Comment from David Evans and Jorge Padilla
Posted on July 27, 2009In a recent post, Josh jokingly offered a mathematical “proof” to demonstrate that the Neo-Chicago approach to antitrust was simply an extension of the basic Chicago School approach: Dan identifies the ?Neo-Chicago School?, a term coined by David Evans and Jorge Padilla, as the optimal ?third way...
EU Likely to Require A Browser Ballot Screen for Windows 7 in Europe
Posted on July 25, 2009PLEASE READ THIS NOTICE BEFORE PROCEEDING: TOTM readers are encouraged at this point to pick among the following antitrust blogs for content before reading this post: Antitrust Review Antitrust & Competition Policy Antitrust Hotch Potch Global Competition Policy OK...
Scholarship Links
Posted on July 24, 2009Kobayashi and Ribstein on jurisdictional competition in LLCs Bainbridge on Shareholder Activism in the Obama Administration Co-blogger Thom Lambert’s review of Ribstein and O’Hara’s The Law Market Peter Leeson makes the case for bringing back the third cheer for capitalism Bill Page reviewing my own review (and Dan Crane’s) of Bob Pitofsky’s How the Chicago School Overshot [...
Jonathan Baker Named FCC Chief Economist
Posted on July 24, 2009Congratulations to Jonathan Baker (Washington Colllege of Law, American University), who has been named Chief Economist at the Federal Communications Commission. Readers may recall that I predicted Professor Baker would return to the top economist spot over at the FTC...
Some Antitrust Links
Posted on July 23, 2009Fred Jenny and David Evans just published a new edited volume called Trustbusters which contains chapters from the heads or senior officials of many of the leading competition authorities around the world. You can download the introductory chapter here and you can order the book from Competition Policy International or from Amazon...
Ovation Reconsidered: A Response to Commissioner Leary
Posted on July 23, 2009I was very pleased to thumb through the newest version of Antitrust Magazine and see a TOTM post get some attention. Its always nice to be cited and have folks take the time to respond to your work — or in this case, blog post. Its even more tickling when the person doing the responding [...
Too Big To Fail as an Antitrust Concept
Posted on July 22, 2009There has been a lot of talk recently about the possibility that lax antitrust gave rise to the financial crisis or that antitrust could be used as a proactive weapon to prevent mergers and acquisitions that would create entities “too big to fail...
Let’s Have New Section 2 Hearings!
Posted on July 22, 2009Commissioner Rosch has offered a defense of the withdraw of the Section 2 Report. This is an important step and the Commissioner, who readers know I’ve criticized from time to time here, should be credited for laying out his specific objections to the Report...
We’re Back
Posted on July 22, 2009Dear Readers: We apologize for the inactivity over the last two weeks. We’ve been having some technical problems with the blog, but believe we now have them resolved. Look for a lot of activity here over the next few days as we try to make up for lost time! The Management
Whitman on Libertarian Paternalism and the Public-Private Distinction
Posted on July 22, 2009Here’s a great post from Glen Whitman on libertarian paternalism as applied to mortgages and the housing market. Glen takes Richard Thaler to task for his NY Times piece discussing behavioral economics in the mortgage market and advocating defaults for “plain vanilla” mortgages...
Blog problems
Posted on July 09, 2009Apologies, dear readers, for our absence of late. We are having a problem with the blog, which prevents us from publishing posts any longer than this one. We are working on the problem and hope to be back to regular blogging soon. Thanks for your patience, The management
Evans and Padilla on Chicago, Neo-Chicago and “Chicago Squared”
Posted on July 07, 2009In a recent post examining the differences between the Neo-Chicago School, the Chicago School, and an “evidence based” approach to antitrust, Josh offered the following tongue in cheek mathematical “proof” to suggest that Neo-Chicago was really just equivalent to the Chicago School + consideration of error costs (Chicago Squared): Dan identifies the ?Neo-Chicago School?, a term [...
The ABA Defends Leegin and Stands Up to Senator Kohl on RPM Bill
Posted on July 06, 2009Some interesting developments on the RPM front. James Wilson testified on behalf of the ABA Antitrust Section testified at the recent hearings on the Discount Consumer Pricing Act on May 19th explaining the ABA’s resolution on the issue of RPM: RESOLVED, That the American Bar Association recommends that the Sherman Act, 15 U...
Evans and Padilla on Chicago, Post Chicago and Neo-Chicago
Posted on June 30, 2009In a recent post examining the differences between the Neo-Chicago School, the Chicago School, and an “evidence based” approach to antitrust, Josh offered the following tongue in cheek mathematical “proof” to suggest that Neo-Chicago was really just equivalent to the Chicago School + consideration of error costs (Chicago Squared): Dan identifies the ?Neo-Chicago School?, a term [...
Rebutting the Arguments for a Public Health Insurance Option
Posted on June 29, 2009A few days ago, Robert Reich had an op-ed in the Wall Street Journal entitled Why We Need a Public Health Care Plan. I had hoped to respond, but I’m a bit consumed with summer research right now. Fortunately, Friday’s Journal included an op-ed by John Calfee, The Dangers of Fannie Mae Health [...
Some Antitrust Links
Posted on June 26, 2009My former FTC colleague David Wales joins Jones Day The CATO “New Course for Antitrust” video is now available for your viewing pleasure Microsoft on the release of Windows 7 in Europe without IE The FTC issues its interim report on authorized generics and Chairman Leibowitz claims that reverse payment settlements (based on a Bureau of Economics analysis) [...
Available Now: Pioneers in Law and Economics
Posted on June 25, 2009I’m very pleased to announce that my first book editing project (along with my colleague Lloyd Cohen), Pioneers in Law and Economics, is available on-line from Edward Elgar Publishing. The book includes a series of specially commissioned essays designed to honor the founders of the law and economics enterprise...
ICANN and Antitrust in Sydney
Posted on June 25, 2009I’ve just returned from Sydney where I was at the ICANN meetings giving a presentation (with Steve Salop of Georgetown Law) and participating in a Q&A on the potential economic consequences of vertical integration between registries and registrars...
A New Course for Antitrust?
Posted on June 15, 2009Tomorrow at Cato at noon, Carl Shapiro (Deputy Assistant Attorney General for Economics at the Antitrust Division) will be giving some remarks on the Obama administration’s antitrust agenda. I’ll be giving some brief remarks in response and participating in a discussion including Shapiro and Edwin Rockefeller and moderated by Douglas Ginsburg...
Commissioner Rosch, Rhetoric, and the Relationship Between Economics and Antitrust
Posted on June 12, 2009Economic theory is essential to antitrust law. It is economic analysis that constrains antitrust law and harnesses it so that it is used to protect consumers rather than competitors. And the relationship between economics and antitrust is responsible for the successful evolution of antitrust from its economically incoherent origins to its present state...
Expanding Insurance Coverage Is Not the Way to Reduce Health Care Costs
Posted on June 11, 2009As his Council of Economic Advisers made clear in its recent health care report, President Obama see two primary goals for his health care reform efforts: to slow the growth of health care costs and to expand coverage of health insurance. It?s pretty clear, though, which of these goals is steering the ship...
It’s Like Rain on Your Wedding Day
Posted on June 10, 2009President Obama in yesterday’s speech on fiscal responsibility: The reckless fiscal policies of the past have left us in a very deep hole. And digging our way out of it will take time, patience, and some tough choices.
Will Section 2 Thwart the DOJ’s New Antitrust Agenda?
Posted on June 05, 2009George Priest has an excellent op-ed in the WSJ correctly calling out the Justice Department’s new Assistant Attorney General Christine Varney for attributing the financial crisis to a lack of antitrust enforcement: Assistant Attorney General for Antitrust Christine Varney claims that the Justice Department can aid economic recovery by prosecuting businesses that have been successful in [...
Dear Mr. Toobin
Posted on June 04, 2009Jeff Toobin has an interesting profile on John Roberts in the New Yorker (HT: Jonathan Adler who also takes issue with Toobin’s description of Leegin, but goes on to challenge Toobin’s general account of Roberts as a “stealth nominee”)...
Government Ownership of GM: Hands-Off Rhetoric Versus Jawboning Reality
Posted on June 04, 2009In his recent speech on the GM bankruptcy, President Obama reassured Americans that the government, which now holds 60% of GM’s stock, is not going to try to take over management of the company: What we are not doing, what I have no interest in doing, is running GM...
Economics in one lesson
Posted on May 31, 2009Several people, including Josh, have drawn my attention to John Hasnas’ excellent op-ed on the Satomayor nomination in the WSJ last week. Just in case you don’t read the same blogs I do, I thought I’d highlight it here. It is brilliant...
Revisionist corporate governance
Posted on May 30, 2009If you haven’t been living under a rock recently, you’ve seen an incredible amount of hand wringing–and proposed regulation–around “excessive compensation.” I’m a little too lazy to amass all the relevant links here, but both the administration and the congress are introducing regulations/bills and talking about the issue extensively...
Some Links
Posted on May 29, 2009A few blog posts that caught me eye today: Justin Wolfers with an accessible explanation of the identification problem with broadband usage data WSJ: The rumored EU remedy for the “new” Microsoft browser case — requiring the firm to distribute its product with “a so-called ballot screen that would present a new computer user with a choice [...
Together Again: The FTC and DOJ Join Forces in American Needle v. NFL
Posted on May 29, 2009The FTC joined the DOJ brief in American Needle v. National Football League arguing that the Supreme Court should deny certiorari. The brief characterizes the question presented as: Whether NFLP, the NFL, and the teams functioned as a ?single entity? when granting the company an exclusive headwear license and therefore could not violate Section 1 of [...
Lambert’s Latest on RPM in the William and Mary Law Review
Posted on May 28, 2009The law and economics of RPM have been a frequent topic of discussion here for Thom and I especially, ranging from the empirical evidence on RPM, to competitive resale price maintenance without free riding, to the inappropriate use of the term “price-fixing” by journalists some who should know better to describe RPM, to the Commission’s [...
Supreme Court Nominee Judge Sonia Sotomayor and Corporate and Securities Law
Posted on May 26, 2009I have been asked a few times today to opine, as a corporate and securities law scholar, on President Obama’s nomination of Judge Sonia Sotomayor for the Supreme Court. (Cnn.com has a couple of quotes reflecting my thoughts.) I have three main comments: First, this is a pivotal time in American securities and corporate law jurisprudence...
Hylton, Manne and Wright in The Deal on Varney’s Withdrawal of the Section 2 Report
Posted on May 26, 2009Available here. An excerpt: But wholesale rejection of the document — the most complete statement to date on the law and economics of Section 2 — because of disagreement with some of its positions is irresponsible and premature. And the rejection of specific conclusions from among the range of possibilities discussed in the report without any [...
If A Tree Falls in a Forest and Nobody Hears It, Did the Bush Antitrust Division Cut It Down?
Posted on May 25, 2009The NYT ran an unsigned editorial on “Intel and Competition” that, quite frankly, doesn’t make much sense to us. It offers two basic arguments: (1) that the Bush administration DOJ is responsible for the state of Section 2 law requirement that plaintiffs demonstrate actual consumer harm, and (2) that foreign antitrust jurisdictions’ pursuit of enforcement [...
Peter Klein Throws Cold Water on New Economy Talk
Posted on May 25, 2009Peter Klein of Organizations and Markets blog-fame kicked off the George Mason/ Microsoft Conference on the Law and Economics of Innovation a few weeks back with a talk on “Does the New Economy Need New A Economics?” His answer: No. This week, Peter takes aim at Wired’s Chris Anderson who predicts a massive shift toward [...
CPI Webinar: Economic and Legal Analysis of Collusion
Posted on May 23, 2009Competition Policy International has announced its next Webinar, featuring Professors Bajari and Abrantes-Metz on the economic and legal analysis of collusion. I’ve had a blast doing these lectures the last couple of weeks teaching Antitrust Economics 101, and will be finishing up the third lecture this week (after covering basic demand side and supply side [...
RPM Workshop Testimony
Posted on May 20, 2009I’ll be testifying tomorrow at the Federal Trade Commission hearings on Resale Price Maintenance. My panel will focus on rule of reason analysis of RPM Post-Leegin. There is a bit of awkwardness testifying about different modes of rule of reason analysis with legislation that would restore the Dr...
Hylton, Manne and Wright in Forbes on Intel, Section 2 and Monopolization in the US
Posted on May 18, 2009Available here. Here’s an excerpt: It turns out that it is a very difficult business to identify the few cases when low prices and aggressive competition might perversely end up harming consumers in the long run rather than simply making them better off...
Zywicki on Chrysler and The Rule of Law
Posted on May 14, 2009My colleague Todd Zywicki has a must read op-ed in the WSJ. Here’s an excerpt: The Obama administration’s behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors — entitled to first priority payment under the “absolute priority rule” — have been browbeaten by an American president into accepting only [...
The EU Intel Decision, Error Costs, and What Happens in the US?
Posted on May 14, 2009Reacting to the EU fines imposed on Intel, Geoff raises a nice point about the difficulty of constructing the but-for world in antitrust cases generally, but particularly in cases where prices are falling. This discussion reminded me of Thom’s excellent post responding to the NYT editorial and an AAI working paper and putting theoretical anticompetitive [...
Good Stuff (Including Josh Wright) on Intel in Today’s WSJ
Posted on May 14, 2009Our own Josh Wright is quoted in the lead article in today’s Wall Street Journal. Josh opines that the European Union’s record $1.45 billion fine against Intel for lowering its prices on granting “exclusionary” rebates on microprocessors means that FTC action against Intel is “much more likely than it was two weeks ago...
A quick note on Intel
Posted on May 13, 2009I am curious about something. AMD and Intel have been competing head to head for more than 15 years, at least since AMD released its Intel 386 clone in the early 90s. In that time, inarguably, microprocessor prices have plumeted and processing power and other features have increased dramatically (I’m aware that we [...
Patent Holdup, Antitrust and Innovation: Harness or Noose?
Posted on May 12, 2009Expanding on the themes in this post from the TOTM symposium book review of Professor Carrier’s new book on “Harnessing the Power of Intellectual Property and Antitrust Law” to encourage innovation, I’ve posted an essay co-authored with a very talented former student and research assistant, Aubrey Stuempfle...
Reminder: Antitrust Economics 101 Starts Tomorrow
Posted on May 12, 2009Tomorrow I’ll be starting a three week interactive web seminar on basic microeconomic concepts that form the basis of antitrust analysis. The lectures will be available through Competition Policy International?s Learning Center on three consecutive Wednesdays at 12 pm EST: May 13, 20, and 27th...
Section 2 Report Quick Reactions
Posted on May 12, 2009A few quick reactions to the repudiation of the Section 2 Report, and more importantly, what it means for the future of monopolization enforcement: First, the most disappointing thing about the withdraw of the Report and this announcement is that it is incredibly dismissive about the long hours of work put into this project by both [...
Neo-Chicago Meets Evidence-Based Antitrust
Posted on May 12, 2009Dan Crane has an excellent essay (”Chicago, Post-Chicago and Neo-Chicago“) reviewing Bob Pitofsky’s Overshot the Mark volume. Here’s Dan’s brief abstract: This essay reviews Bob Pitofsky’s 2008 essay compilation, How Chicago Overshot the Mark: The Effect of Conservative Economic Analysis on U...
Coda: Varney withdraws Section 2 Report
Posted on May 11, 2009I guess it comes as little surprise that Christine Varney has withdrawn the Section 2 Report. The comments made in the statement withdrawing the Report indicate . . . well, that Varney isn’t convinced by reading this blog, among other things. Coming on the heels of our Section 2 Symposium, the news is jarring, although [...
Section 2 Symposium: David Evans on Tying (Antitrust’s Greatest Intellectual Embarrassment)
Posted on May 07, 2009David Evans is Head, Global Competition Policy Practice, LECG; Executive Director, Jevons Institute for Competition Law and Economics, and Visiting Professor, University College London; and Lecturer, University of Chicago. I?d like to propose a contest for the greatest intellectual embarrassment of antitrust...
Section 2 Symposium: Wrap Up
Posted on May 07, 2009Geoffrey Manne is Director, Global Public Policy at LECG and a Lecturer in Law at Lewis & Clark Law School. He is a founder of Truth on the Market. Josh Wright is Assistant Professor at George Mason University School of Law and a former Scholar in Residence at the FTC...
Section 2 Symposium: Herbert Hovenkamp on Predatory Pricing and Bundled Discounts
Posted on May 06, 2009Herbert Hovenkamp is Professor of Law at The University of Iowa College of Law. The baseline for testing predatory pricing in the Section 2 Report is average avoidable cost (AAC), together with recoupment as a structural test (Report, p. 65). The AAC test or reasonably close variations, such as average variable cost or short-run marginal [...
Section 2 Symposium: Bruce Kobayashi on Predatory Pricing and the Relevant Measure of Cost
Posted on May 06, 2009Bruce Kobayashi is a Professor of Law at George Mason Law School. Dimming the Court’s Brooke Group Bright Line Administrable Rule? As noted in my earlier post, the Supreme Court’s Brooke Group rule is held out as the primary example of an administrable bright line rule aimed at controlling the costs of type I error...
Section 2 Sympoisum: Welcome to the Final Day
Posted on May 06, 2009Geoffrey Manne is Director, Global Public Policy at LECG and a Lecturer in Law at Lewis & Clark Law School. He is a founder of Truth on the Market. Josh Wright is Assistant Professor at George Mason University School of Law and a former Scholar in Residence at the FTC...
Section 2 Symposium: Alden Abbott on the International Perspective
Posted on May 06, 2009Alden Abbott is Associate Director, Bureau of Competition, Federal Trade Commission. The views expressed below are solely attributable to the author. They do not necessarily represent the views of the Federal Trade Commission or of any individual Federal Trade Commissioner...
Section 2 Symposium: Bill Page on Microsoft’s “Forward-Looking” Monopolization Remedy
Posted on May 06, 2009William Page is a Marshall M. Criser Eminent Scholar in Electronic Communications and Administrative Law at the University of Florida, Levin College of Law. The DOJ?s Section 2 Report speaks in general terms about the costs and benefits of various remedies for monopolization...
Section 2 Symposium: Tim Brennan on the Relationship Between Regulation and Antitrust
Posted on May 06, 2009Tim Brennan is a professor of public policy and economics at UMBC and a senior fellow with Resources for the Future (RFF). When I first started working in antitrust at the Justice Department over thirty years ago?there?s a hard reality to accept?the Antitrust Division was then embroiled in an effort to reform the regulation of oil [...
Section 2 Symposium: Herbert Hovenkamp on Patents and Exclusionary Practices
Posted on May 06, 2009Herbert Hovenkamp is Professor of Law at The University of Iowa College of Law. One interesting aspect of the DOJ Report on Section 2 is the scant, episodic treatment of IP issues. The Report rejects the presumption of market power for patent ties (p...
Section 2 Symposium: Bill Kolasky on Proving Market Power
Posted on May 06, 2009William Kolasky is a partner in WilmerHale’s Regulatory and Government Affairs Department, a member of the firm’s Antitrust and Competition Practice Group, and a former Deputy Assistant Attorney General in the Antitrust Division at the Department of Justice...
Section 2 Symposium: Josh Wright on An Evidence Based Approach to Exclusive Dealing and Loyalty Discounts
Posted on May 06, 2009Josh Wright is a Professor of Law at George Mason Law School, a former FTC Scholar in Residence and a regular contributor to Truth on the Market. The primary anticompetitive concern with exclusive dealing contracts is that a monopolist might be able to utilize exclusivity to fortify its market position, raise rivals? costs of distribution, and [...
Section 2 Symposium: Tim Brennan on Predation, Exclusion, and Complement Market Monopolization
Posted on May 06, 2009Tim Brennan is a professor of public policy and economics at UMBC and a senior fellow with Resources for the Future (RFF). As evidenced by this on-line symposium, the handling of cases under the rubrics “monopolization,” “single firm conduct”, or “abuse of dominance” continues to be debated by the competition policy community...
Section 2 Symposium: Howard Marvel on Safe Harbors for Short Term Exclusive Dealing Contracts
Posted on May 06, 2009Howard P. Marvel is Professor of Economics in the Department of Economics and Professor of Law in the Moritz College of Law, both at The Ohio State University. Exclusive dealing prevents the bait-and-switch behavior by dealers who convert customers drawn by one brand to the products of its rivals...
Section 2 Symposium: Dan Crane on Buyer-Instigated Bundled Discounts
Posted on May 06, 2009Daniel Crane is a Professor of Law at Cardozo Law School (soon to be at University of Michigan Law School). Bundled discounts have been one of the hottest monopolization topics of the last decade. Much of the trouble began with the Third Circuit?s en banc decision in LePage?s v...
Section 2 Symposium: Thom Lambert on The DOJ-FTC Divide on Bundled Discounts
Posted on May 06, 2009Thom Lambert is an Associate Professor of Law at University of Missouri Law School and a blogger at Truth on the Market. A bundled discount occurs when a seller offers to sell a collection of different goods for a lower price than the aggregate price for which it would sell the constituent products individually...
Section 2 Symposium: Welcome to Day 2 on Section 2 and the Section 2 Report–The Debate over General Standards
Posted on May 05, 2009Geoffrey Manne is Director, Global Public Policy at LECG and a Lecturer in Law at Lewis & Clark Law School. He is a founder of Truth on the Market. Josh Wright is Assistant Professor at George Mason University School of Law and a former Scholar in Residence at the FTC...
Section 2 Symposium: Bruce Kobayashi on Are Administrable Bright Line Rules Underutilized in Section 2 Analyses?
Posted on May 05, 2009Bruce Kobayashi is a Professor of Law at George Mason Law School. One of the most important changes in the antitrust laws over the past 40 years has been the diminished reliance of rules of per se illegality in favor of a rule of reason analysis. With the Court?s recent rulings in Leegin (eliminating per [...
Section 2 Symposium: Bill Page on Microsoft and the DOJ?s General Standards of Exclusion
Posted on May 05, 2009William Page is a Marshall M. Criser Eminent Scholar in Electronic Communications and Administrative Law at the University of Florida, Levin College of Law. The DOJ?s § 2 Report offers two recommendations under the heading of ?General Standards for Exclusionary Conduct...
Section 2 Symposium: Michael Salinger on Error Costs and the Case for Conduct-Specific Standards
Posted on May 05, 2009Michael A. Salinger is a managing director in LECG?s Cambridge office and a professor of economics at the Boston University School of Management, where he has served as chairman of the department of finance and economics. He is a former Director of the Bureau of Economics at the FTC...
Section 2 Symposium: Keith Hylton on The Error Cost Approach and the Case for “Substantial Disproportionality”
Posted on May 05, 2009Keith Hylton is a Professor of Law at Boston University School of Law. [Eds - This post originally appeared on Day 1 of the Symposium, but we are re-publishing it today because it bears directly on today's debate over general standards] The ?error cost? or ?decision theory? approach to Section 2 legal standards emphasizes the probabilities [...
Section 2 Symposium: Bill Kolasky on a Stepwise Rule of Reason for Exclusionary Conduct
Posted on May 05, 2009William Kolasky is a partner in WilmerHale’s Regulatory and Government Affairs Department, a member of the firm’s Antitrust and Competition Practice Group, and a former Deputy Assistant Attorney General in the Antitrust Division at the Department of Justice...
Section 2 Symposium: Thom Lambert on Defining and Identifying Exclusionary Conduct
Posted on May 05, 2009Thom Lambert is an Associate Professor of Law at University of Missouri Law School and a blogger at Truth on the Market. There?s a fundamental problem with Section 2 of the Sherman Act: nobody really knows what it means. More specifically, we don?t have a very precise definition for ?exclusionary conduct,? the second element of [...
Section 2 Symposium: Howard Marvel–An Economist’s View
Posted on May 04, 2009Howard P. Marvel is Professor of Economics in the Department of Economics and Professor of Law in the Moritz College of Law, both at The Ohio State University. In the wake of Bork and Posner, and Baxter and the Reagan Revolution, a consensus emerged that big could be bad, but the harm that dominant firms could [...
Section 2 Symposium: Keith Hylton–An Economist’s View
Posted on May 04, 2009Keith Hylton is a Professor of Law at Boston University School of Law. The “error cost” or “decision theory” approach to Section 2 legal standards emphasizes the probabilities and costs of errors in monopolization decisions. Two types of error, and two associated types of cost are examined...
Section 2 Symposium: David Evans–An Economist’s View
Posted on May 04, 2009David Evans is Head, Global Competition Policy Practice, LECG; Executive Director, Jevons Institute for Competition Law and Economics, and Visiting Professor, University College London; and Lecturer, University of Chicago. The treatment of unilateral conduct remains an intellectual and policy mess as we finish out the first decade of the 21st century...
Section 2 Symposium: Alden Abbott on the View from Within the FTC
Posted on May 04, 2009Alden Abbott is Associate Director, Bureau of Competition, Federal Trade Commission. The views expressed below are solely attributable to the author. They do not necessarily represent the views of the Federal Trade Commission or of any individual Federal Trade Commissioner...
Section 2 Symposium: Dan Crane on Framing the Debate
Posted on May 04, 2009Daniel Crane is a Professor of Law at Cardozo Law School (soon to be at University of Michigan Law School). I must confess that my basic reaction to the Section 2 report was disappointment. It’s not that I find much fault with the report itself–a few quibbles yes, but generally I find it quite satisfactory–but that [...
Section 2 Symposium: Michael Salinger on Framing the Debate
Posted on May 04, 2009Michael A. Salinger is a managing director in LECG?s Cambridge office and a professor of economics at the Boston University School of Management, where he has served as chairman of the department of finance and economics. He is a former Director of the Bureau of Economics at the FTC...
Section 2 Symposium: Tad Lipsky on Framing the Debate
Posted on May 04, 2009Tad Lipsky is a partner in the Washington, D.C. office of Latham & Watkins and a former Deputy Assistant Attorney General with the Department of Justice. When the Justice Department issued its Unilateral Conduct Report last September, it became an instant sensation not primarily because of its content, but because of a strident public critique issued [...
Welcome to the TOTM Section 2 Report Symposium
Posted on May 04, 2009Section 2 and the Section 2 Report: Perspectives and Evidence Geoffrey Manne is Director, Global Public Policy at LECG and a Lecturer in Law at Lewis & Clark Law School. He is a founder of Truth on the Market. Josh Wright is Assistant Professor at George Mason University School of Law and a former Scholar in Residence at [...
TOTM Online Symposium Announcement: Section 2 and the Section 2 Report
Posted on May 03, 2009REMINDER: Section 2 Symposium Begins Tomorrow! We are pleased to announce the next Truth on the Market online symposium: Section 2 and the Section 2 Report: Perspectives and Evidence We have an incredible line up of participants for the symposium, and we (modestly) believe that this will be the most significant online antitrust event to date...
Web Seminar: Antitrust Economics 101
Posted on May 01, 2009I’ll be teaching an interactive web seminar on basic microeconomic concepts that form the basis of antitrust analysis through Competition Policy International’s Learning Center on three consecutive Wednesdays: May 13, 20, and 27th. CLE credit is available for practicing lawyers...
Maryland Adopts New Per Se Rule for Minimum RPM
Posted on May 01, 2009A new law in Maryland will take effect on October 1 and will re-instate the Dr. Miles rule for minimum RPM. The Wall Street Journal reports that it is a “move that could lead to lower prices for consumers across the country.” I doubt it...
Mossoff on the Rise and Fall of the Sewing Machine Patent Thicket
Posted on April 30, 2009My colleague Adam Mossoff is blogging over at the Volokh Conspiracy on his fascinating paper, A Stitch in Time: The Rise and Fall of the Sewing Machine Patent Thicket. Here’s an excerpt from the first post: The debate centers on whether patent thicket theory accurately explains or predicts such problems in practice, and the empirical [...
TOTM Online Symposium Announcement: Section 2 and the Section 2 Report
Posted on April 28, 2009We are pleased to announce the next Truth on the Market online symposium: Section 2 and the Section 2 Report: Perspectives and Evidence We have an incredible line up of participants for the symposium, and we (modestly) believe that this will be the most significant online antitrust event to date...
What does Tyler know about law and economics, anyway?
Posted on April 28, 2009Over at Crooked Timber, Tyler Cowen comments on Steve Teles’ book on conservative legal movements. I never get tired of plugging Steve’s book (as he knows), so I’ll do it again here: It’s a great book, a riveting read, and instructive, to boot...
Ribstein on Business, Film and Law
Posted on April 26, 2009Wrapping up what looks like a very interesting conference at the University of Illinois on the interaction between business, film, and law, Larry Ribstein shares some thoughts in an excellent post. Readers of Ideoblog will be familiar with Professor Ribstein’s take on how artists’ negative views of capitalists find their way into film...
Some Reading
Posted on April 21, 2009Solow reviews Posner on the financial crisis Dave Hoffman has an excellent post summarizing the consumer bankruptcy debate in empirical legal scholarship in a series of recent papers between Rafael Pardo and a group including Bob Lawless, Angela K. Littwin, Katherine M...
“We’re Kinda Worried About the Monopoly Thing”
Posted on April 20, 2009That’s from Firefox chief software architect Mike Connor in an interview with PCPro. Here’s an excerpt suggesting that Mozilla fears that its recent success might lead to antitrust liability in the United States or elsewhere: Firefox has only just tipped past the 20% mark in worldwide browser market share, and is still a long way away [...
Glaxo/Pfizer HIV Drug Collaboration
Posted on April 17, 2009There’s an interesting story in the WSJ about a merger between the HIV-drug businesses at Glaxo and Pfizer. Some details from the story: Examples of cooperation among drug giants are unusual — Pfizer and Glaxo are the world’s top two drug companies by sales, respectively — since big pharmaceutical companies compete to sell products, attract top [...
Randy Picker on the Google Book Settlement
Posted on April 17, 2009Randy Picker has posted The Google Book Settlement: A New Orphan Works Monopoly? to SSRN. I have not been following the antitrust issues related to the settlement as closely as I should be and so I’m really looking forward to reading this. Here is the abstract: This paper considers the proposed settlement agreement between Google and [...
Weekend Reading
Posted on April 17, 2009Mike Sykuta on GM and Transaction Cost Economics (O&M) Peter Klein on Antitrust and the Theory of the Firm (again, O&M) John Pfaff continues his series on evidence-based empirical work (at Prawfs) Who Games SSRN Download Counts? Guido Imbens (from whom I took econometrics at UCLA) defends randomized experiments in development economics against the critics (HT: Freakonomics) (see also [...
Call for Papers: FTC/Northwestern University Second Annual Microeconomics Conference
Posted on April 16, 2009The Federal Trade Commission and the Searle Center at Northwestern are hosting the second annual Microeconomics Conference. The conference will take place on November 19th and 20th at the FTC. Here’s the conference announcement and call for papers: The Federal Trade Commission’s Bureau of Economics, Northwestern University?s Searle Center on Law, Regulation and Economic Growth, and [...
“Goldman reports $1.8 billion profit”
Posted on April 13, 2009Cnn.com tells us the good news that “Goldman reports $1.8 billion profit,” but the totality of the information in the cnn.com article strikes me as mildly curious. While announcing that “Goldman reports $1.8 billion profit,” the article points out that Goldman needed $10 B in TARP funds only a few months ago...
Dont Call It A Comeback
Posted on April 12, 2009When I came onto the job market in 2004, a number of advisers told me that I should not market myself as an ?antitrust guy.? The prevailing view on the job market was that ?antitrust was dead.? This perception was conveyed one way or another in interviews or conversations with folks in the legal academy...
GMU/Microsoft Conference on the Law & Economics of Innovation
Posted on April 12, 2009For the third year, Josh and I have organized the annual George Mason Law School/Microsoft Conference on the Law and Economics of Innovation. The conference is at the Arlington Hilton on May 7; registration is free. This year’s conference is on “Online Markets vs...
Shelanski from Berkeley to Georgetown
Posted on April 09, 2009Congratulations to Professor Shelanski (HT: Brian Leiter). Berkeley’s strength in antitrust is impressive. Note that even with the likely departures of Joe Farrell (FTC Bureau of Economics), Carl Shapiro (DOJ) and Shelanski (Georgetown, and maybe into the administration?), the group still includes at least Dan Rubinfeld and Aaron Edlin and should still be considered amongst [...
My interview with Bill Isaac
Posted on April 08, 2009Over at finreg21–a new site devoted to news, analysis and commentary on financial regulatory reform with which I am affiliated–I interview Bill Isaac, former Chairman of the FDIC (during the savings and loan crisis). We talk about his views on mark to market accounting and his testimony before congress (and a smidge about his views [...
Is the Chicago School Really Dead? How Do You Know?
Posted on April 08, 2009Answer: not by a long shot. Not in the Supreme Court. Not in the empirical economics literature. But perhaps according to at least one FTC Commissioner in the new FTC annual report: Commissioner J. Thomas Rosch believes the current financial crisis has undermined the Chicago school of economics that has so heavily influenced antitrust enforcement over [...
The Future of Empirical Legal Scholarship
Posted on April 07, 2009Thoughts from John Pfaff (Fordham) here and here. And here is an excerpt from his first post laying out some of the problems and challenges facing the empirical legal studies movement: So what are the problems we face? 1. An explosion in empirical work...
TOTM Symposium Wrap Up
Posted on April 04, 2009I’d like to formally thank Mike Carrier, Geoff Manne, Phil Weiser, Dan Crane, Brett Frischmann, Scott Kieff and Dennis Crouch for participating in the first TOTM symposium on Mike’s book: Innovation for the 21st Century: Harnessing the Power of Intellectual Property and Antitrust Law...
Did the Chicago School Overshoot the Mark?
Posted on April 03, 2009I’ve posted to SSRN a new essay entitled Overshot the Mark? A Simple Explanation of the Chicago School’s Influence on Antitrust. It is a book review of Robert Pitofsky’s recent volume How the Chicago School Overshot the Mark: The effect of Conservative Economic Analysis on U...
The Cousins Recruiting Saga Continues (Again)
Posted on April 02, 2009It wasn’t too long ago that I blogged about the purported end of the Demarcus Cousins saga. For TOTM readers that want to catch up to speed, here is how things stood about a month ago: For those who haven?t, Cousins is a blue chip high school basketball recruit who has been bargaining hard with the [...
Professor Carrier’s Response
Posted on April 01, 2009First of all, I would like to express my deepest gratitude to Josh Wright. Only because of Josh?s creativity and tireless, flawless execution did this blog symposium come about and run so smoothly. I also would like to thank Dennis Crouch, who has generously cross-posted the symposium at PatentlyO...
The other shoe
Posted on April 01, 2009Michael Carrier’s response to the symposium contributions will be up a bit later today. We’re all anxious to see his remarks, so be sure to check back soon!
Kieff on Carrier’s Innovation in the 21st Century
Posted on March 31, 2009This post is from F. Scott Kieff (Wash U./ Hoover) I, too, join the rest of the participants in congratulating Michael Carrier on this great book about this great topic. I have enjoyed reading Michael?s work in the past and I enjoyed meeting him at a conference last year...
Frischmann on Carrier’s Innovation in the 21st Century
Posted on March 31, 2009This post is from Brett Frischmann (Loyola/ Cornell (Visiting)) I enjoyed reading Mike?s book very much. It provides an excellent primer on antitrust, IP, and innovation. He synthesizes the legal and economic foundations, contours, and controversies in an accessible fashion...
Crouch on Carrier’s Innovation in the 21st Century
Posted on March 31, 2009This post is from Dennis Crouch(Missouri/PatentlyO) I am enjoying Professor Carrier’s new book Innovation in the 21st Century: Harnessing the Power of Intellectual Property and Antitrust Law. I will focus my discussion here on patent issues discussed in Part III of the book...
Crane on Carrier’s Innovation in the 21st Century
Posted on March 30, 2009Congratulations to Mike on a very fine book, which I must admit I am still in the process of digesting. I will confine my initial comments to Mike?s chapter on patent settlements (Chapter 15), which I understand will also be coming out as an article in the Michigan Law Review...
Welcome to the 1st TOTM Blog Symposium on Michael Carrier’s Innovation in the 21st Century: Harnessing the Power of Intellectual Property and Antitrust Law
Posted on March 30, 2009Welcome to the first TOTM Blog Symposium. This is a format we hope to make more use of on TOTM in the future and we?ve got an ideal project to start with. For the next two days (and maybe three) we?ll be discussing Professor Michael Carrier?s (Rutgers) forthcoming book: Innovation for the 21st Century: Harnessing [...
Wright on Carrier’s Innovation in the 21st Century
Posted on March 30, 2009First, I want to join the rest of the participants in congratulating Professor Carrier on an excellent and well-written book emerging out of a thoughtful and ambitious project. The project, and the book, are provocative, important contributions to the literature, and usefully synthesize many of the most important debates in both antitrust and intellectual [...
Manne on Carrier’s Innovation in the 21st Century
Posted on March 30, 2009Michael Carrier has written a timely and interesting book. Like Dan, I?m still digesting it (which means, in translation: I have not yet read every word). There is much to like about the book, in particular its accessible format and content. I do fear that it is a bit overly ambitious, however, hoping both to [...
Weiser on Carrier’s Innovation in the 21st Century
Posted on March 30, 2009This post is from Phil Weiser (Colorado) It is trite to say that ?we are all Schumpeterians now.? When it comes to appreciating the importance of innovation and entrepreneurship, however, we are. Schumpeter, unfortunately, did not leave a theory of innovation that lends itself to easy application to public policy prescriptions, as Brad De Long [...
Symposium Halftime
Posted on March 30, 2009We’re halfway through the TOTM symposium on Professor Carrier’s Innovation for the 21st Century: Harnessing the Power of Intellectual Property and Antitrust Law. I’ve provided links to Monday’s posts on the book related to antitrust issues: Dan Crane Phil Weiser Geoff Manne Josh Wright The comments to those posts are still live...
Their Judgment Has Been Otherwise Impeccable
Posted on March 23, 2009I’m very pleased to announce that starting Fall 2009 I will be a new addition, by way of a courtesy appointment supplementing my primary appointment to the Law School, to the GMU Economics Department. The department has a wonderful reputation (and ranking) in law and economics (amongst other things of course: its entrepreneurial spirit and [...
Capitalism is Good
Posted on March 22, 2009A friendly reminder from Becker and Murphy: Consider the following extraordinary statistics about the performance of the world economy since 1980. World real gross domestic product grew by about 145 per cent from 1980 to 2007, or by an average of roughly 3...
Antitrust Pleading After Twombly
Posted on March 22, 2009Here’s a report from Shearman & Stearling (HT: Point of Law). A few interesting highlights from the report: “federal courts are granting, at almost a 2:1 ratio, defendants? motions to dismiss.” Sample sizes still too small to say anything meaningful about inter-Circuit variation, but the report tells us that the D...
AIG Isn’t Too Big Too Fail
Posted on March 20, 2009So says Lucian Bebchuk in the WSJ: While AIG has thus far been able to cover derivative losses using government funds, the possibility of large additional losses must be recognized. AIG recently stated that it still has about $1.6 trillion in “notional derivatives exposure...
ABA Spring Meetings
Posted on March 20, 2009I’ll be in DC next week for the ABA Spring Meetings — including teaching an antitrust fundamentals course on basic economic principles on Wednesday morning (along with co-panelists Andrew Gavil (Howard), Erika Brown-Lee (FTC). One of the panels I’m most interested in watching is the Friday morning enforcers roundtable which looks like it will feature [...
JLE = UVA Law Review?
Posted on March 20, 2009Brian Leiter put together an interesting survey on the “top 20″ highest quality publishers of legal scholarship. Here are the top 10: 1. Harvard Law Review (Condorcet winner: wins contests with all other choices) 2. Yale Law Journal loses to Harvard Law Review by 112?66 3...
Congrats Professor Crane
Posted on March 20, 2009Let me join Danny Sokol in congratulating Dan Crane in accepting a lateral offer at the University of Michigan. Dan is one the clearest antitrust thinkers around and a bright star in the group of younger antitrust law profs. I’m a big fan of his work...
Gabriel on Trinko After Linkline
Posted on March 19, 2009Manfred Gabriel (Antitrust Review) writes that Linkline extends the reach of Trinko in some important ways: The opinion of the court in Linkline, Chief Justice Roberts writes that Trinko: ? makes clear that if a firm has no antitrust duty to deal with its competitors at wholesale, it certainly has no duty to deal under terms and [...
Free Trade Petition
Posted on March 19, 2009Atlas Economic Research Foundation is circulating a petition in favor of free trade (HT Sasha Volokh). The plan is to unveil the petition before the April 1 G20 meetings in London. Here is the text of the petition. You can sign it here if you are interested...
TOTM/ Patently-O Blog Symposium: Michael Carrier’s Innovation for the 21st Century
Posted on March 19, 2009On March 30th and 31st, TOTM will hold its first blog symposium. The topic will be Michael Carrier’s (Rutgers) forthcoming book: Innovation for the 21st Century: Harnessing the Power of Intellectual Property and Antitrust Law (from Oxford University Press)...
OK, The Stimulus and Bailouts are One Thing …
Posted on March 19, 2009But THIS is where I draw the line. Go Bruins.
I Guess I Have to Rewrite My Contracts Final
Posted on March 14, 2009Maybe it was too easy anyway. I mean, who hasn’t heard this one before? Jinsoo Kim begins his opening brief by stating, ?Blood may be thicker than water, but here it?s far weightier than a peppercorn.?1 Kim appeals from the trial court?s refusal to enforce a gratuitous promise, handwritten in his friend’s own blood, to repay [...
On the Whole Foods Settlement
Posted on March 12, 2009Thom kicked off discussion of the FTC and Whole Foods’ settlement on a critical note: It?s pretty impressive that the Commissioners were willing to stand their ground in the face of evidence that Whole Foods wasn?t earning monopoly profits, that numerous grocery retailers are moving toward the Whole Foods format, that there are obvious economies of [...
Varney Confirmation Hearings
Posted on March 11, 2009Webcast and testimony are available. Here is the paragraph from the testimony setting forth objectives for the new DOJ enforcement regime with some brief commentary below: There are three main areas that, if confirmed, I will focus on as the Assistant Attorney General for Antitrust...
Because Barney Frank Knows Better Ways to Woo High-End Bank Clients
Posted on March 11, 2009A couple of weeks ago, Rep. Barney Frank sent a snippy letter to Northern Trust, a Chicago-based bank that caters to very wealthy clients. Mr. Frank and some other Platonic guardians on the House Financial Services Committee were incensed that Northern Trust, a recipient of TARP funds, had sponsored and hosted clients at a [...
Who’s Your Nanny?
Posted on March 10, 2009My law school classmate, M. Todd Henderson (Chicago Law), has posted an interesting paper on SSRN. The paper, entitled The Nanny Corporation and the Market for Paternalism, explores “Nannyism” by business firms and the government. Nannyism consists of imposing paternalistic rules designed to protect the governed — e...
Some Links
Posted on March 10, 2009Pharma Mergers! The unintended consequences of disability law (Freakonomics) Posner on the Failure of Capitalism — a book I that I suspect will attract much attention Congratulations to Scott Kieff who is heading from Wash U to GW The FTC gets PI in CCC/Mitchell
The Demarcus Cousins Saga Ends
Posted on March 09, 2009We’ve been following the Demarcus Cousins saga. For those who haven’t, Cousins is a blue chip high school basketball recruit who has been bargaining hard with the University of Alabama-Birmingham (UAB) over signing his National Letter of Intent — the letter that commits a player to attend the university and imposes the penalty of [...
Evans and Schmalensee Webinar on Two-Sided Markets
Posted on March 09, 2009Here is a link to the latest Competition Policy International Webinar series on antitrust issues in two-sided markets by David Evans and Richard Schmalansee. Here is the course description: It is now widely recognized by antitrust and economic scholars that analyzing competitive practices such as mergers and abuse of dominance in two-sided industries [...
We Didn’t Hear the Question
Posted on March 09, 2009I have a love/hate relationship with the wireless access in our law school classrooms. On the one hand, it saddens me that my students surf the Internet during class. On the other hand, Socratic dialogue goes so much faster when the students can IM each other answers...
“Editing Reality With Both Hands … ”
Posted on March 07, 2009The post title is stolen from a commenter (Unit) at this post over at Austrian Economists. Delong’s comment editing practices (the selective editing even more so than the deleting of comments with opposing points of view) are disturbing to say the least...
Verret on the Self-Defeating Bailout
Posted on March 07, 2009My colleague JW Verret has an interesting take on the bank bailout at Forbes.com: This deal was intended to bolster public confidence in banks, while at the same time minimizing the cost of the bailout when Treasury sells its shares once markets pick up...
Is Obama’s Radicalism Killing the Dow?
Posted on March 07, 2009Stanford economist Michael Boskin thinks so. He set forth his argument in the WSJ. After observing that President Obama’s budget “more than doubles the national debt held by the public, adding more to the debt than all previous presidents — from George Washington to George W...
Whole Foods Throws in the Towel — Congrats to the FTC!
Posted on March 07, 2009The witch hunt is over. Last evening, the FTC announced that it would drop its antitrust action against high-end grocer Whole Foods in exchange for the chain’s agreement to sell 32 stores and to give up the rights to Wild Oats’ name. FTC Chairman Jon Leibowitz proclaimed that “[a]s a result of this [...
DOJ AAG Designate Christine Varney on Section 2, Europe, Google & A Puzzling Statement About Error Costs
Posted on February 23, 2009Kmiec on the Death of the GOP
Posted on February 17, 2009I must begin this post with a caveat: I am not a Republican. Nor am I a Democrat. I really have little interest in defending one party over the other. I agree with the GOP on some matters, with the Democrats on others, and with neither party on a host of [...
Elhauge Lecture on Antitrust, Entrepreneurship, and Innovation
Posted on February 17, 2009Here’s the program announcement: All are invited to The Ewing Marion Kauffman Foundation Distinguished Lecture in Antitrust, Entrepreneurship, and Innovation, with 2009 Guest Lecturer Prof. Einer Elhauge, Harvard Law School. The lecture will be held at the American University Washington College of Law, 4801 Massachusetts Ave...
FTC RPM Workshops This Week
Posted on February 16, 2009Tuesday and Thursday this week the FTC will be hosting the first two in a series of workshops on Resale Price Maintenance. Presentation materials, slides, and papers are available on the website.
New and Improved: Is Antitrust Too Complicated for Generalist Judges
Posted on February 16, 2009Co-author Michael R. Baye (of the Kelley School of Business at Indiana University and formerly Director of the Bureau of Economics at the Federal Trade Commission) and I have posted a new and improved version of our paper, Is Antitrust Too Complicated For Generalist Judges: The Impact of Economic Complexity and Judicial Training on Appeals, [...
Evans on Antitrust & the Global Internet Economy
Posted on February 16, 2009From the Northwestern University Law Review Colloquy, David Evans explores the implications of the emerging global internet economy for antitrust. Here’s the closing two paragraphs: We can expect the web-based industries will follow the same trajectory, and thus far they have...
Vizio Files Monopolization Suit Against Funai
Posted on February 15, 2009This looks like an interesting suit involving antitrust, patents, and standard setting: VIZIO, Inc., America’s HDTV Company, announced today that it has filed an antitrust and unfair competition lawsuit in the United States District Court, Central District of California, against Funai Electronics Co...
Zywicki on Judicial Modification of Mortgage Contracts
Posted on February 13, 2009Earlier this week, I argued that courts should resist the urge to modify what turn out to be improvident commercial contracts. An unintended consequence of rewriting such contracts, I asserted, is that negotiated agreements would become unreliable, which would raise the risks associated with, and thereby discourage, wealth-creating exchanges...
Sirius-XM Merger Retrospective…
Posted on February 11, 2009It looks like Sirius-XM is now contemplating bankruptcy (HT: Danny Sokol). There were quite a few critics of the Bush administration’s decision not to challenge the merger. Various antitrust commentators and critics (as well as rivals like the NAB) lined up on the side of enforcement, arguing that the merger would lead to [...
O’Hara and Ribstein’s The Law Market
Posted on February 11, 2009You can now purchase it in hard copy, or on Kindle, and follow the action at the Conglomerate Book Club in March. I’ll be starting it on my Kindle on an airplane this afternoon.
To Whom It May Concern: Please Stop Calling RPM Agreements Cartels (or Price-Fixing)
Posted on February 11, 2009The headline of this Bloomberg story on the Swiss Competition Authority’s complaint against Bayer, Pfizer and Lilly announces that the firms operated an “Erection Drug Cartel.” I read a bit further to learn something about what I suspected, from the title of the story, would be a horizontal agreement between the firms — that [...
Is anyone else terrified that the fate of the economy hangs in Maxine Waters’ hands?
Posted on February 11, 2009Yes, actually. I was going to write a post on this topic, but then Megan McCardle said pretty much what I wanted to say, only snarkier and pithier. A taste, but read the whole thing: But this woman is sitting on the House Financial Services Committee...
Becker and Murphy on the Stimulus
Posted on February 10, 2009I’ve got the over-under on Krugman name-calling directed at both set at noon EST tomorrow. Any takers? Anyway, here’s some key excerpts from the WSJ piece: In a full-employment situation, increased government spending would largely replace private spending, so the net stimulus to GDP would likely be quite small...
Wanna Keep This Economic Mess to a Minimum? Honor Contracts.
Posted on February 09, 2009New York Times business columnist Joe Nocera insists that current economic conditions call for courts to ignore carefully negotiated contracts between sophisticated business entities. Arguing that Dow Chemical Company should be free to walk away from its agreement to buy specialty chemical manufacturer Rohm & Haas, Mr...
Why oh why can’t we have a better Paul Krugman?
Posted on February 06, 2009Krugman’s latest opinion piece is here. Like me, Paul is beating the same drum over and over (oh, and by the way, like at DeLong’s place, my comments mysteriously don’t show up on his blog. Odd. I swear I am civil and engaged. I’m not sure why I am blacklisted...
Robert Barro Talks Stimulus
Posted on February 06, 2009Here’s the link. Its an accessible read. Here’s a few key question (in bold) and answers: Do you read Paul Krugman’s blog? Just when he writes nasty individual comments that people forward. Oh, well he wrote a series of posts saying he thought the World War II spending evidence was not good, for a variety of reasons, but [...
A Different Form of Competition
Posted on February 05, 2009A DC area blog reader sends the following update on Inova’s successful attempts to forestall entry in Northern Virginia: The Loudoun County Board of Supervisors voted yesterday to reject a proposal by HCA Virginia to build a hospital in Loudoun, capping more than five years of fierce debate over how best to meet the rising demand [...
“One thing is clear to me: the orthodox and unvarnished Chicago School of economic theory is on life support, if it is not dead”
Posted on February 05, 2009More settling economic debates by declaration and without regard to the evidence. When you make declarations like this it is best to do your homework. Consider the following: The Post-Chicago theoretical advances are well known to be built upon the foundation laid by Chicago School founders like Aaron Director — it is simply misleading to argue [...
The Boss Settles It
Posted on February 05, 2009Is the Ticketmaster/Live Nation merger anticompetitive? Does it present an opportunity to test whether the DOJ will adopt the evasion of constraint theory of monopolization which I’ve criticized? These are academic questions. The matter has been settled by the Boss: A final point for now: the one thing that would make the current ticket situation even [...
Too Bad They Couldn’t Get Bob Dole for the Ad
Posted on February 05, 2009Those lame Super Bowl commercials have nothing on this one. (HT: Don Boudreaux)
More Evasion of Pricing Constraints as Antitrust Violations: Vertical Merger Edition
Posted on February 04, 2009I’ve criticized elsewhere what appears to the the FTC’s new “evasion of pricing constraint” theory of monopolization emerging from Ovation (see also here), N-Data, and Rambus. I expressed some concern that this theory had no limiting principles and was detached in important ways from sound economics: Here are a few examples of conduct the FTC could [...
Does this count as socialism? Maybe it’s fascism.
Posted on February 04, 2009Oh, those monikers always confuse me. So much seems to hang on the right label. When does government intervention in the economy become so extreme that it is appropriate to label it socialist? Here at TOTM we’ve had this discussion before. But no mind–call it “toast,” or call it “eggplant,” or just call it stupid, but [...
More Hayek (and Buchanan), Less Keynes
Posted on February 04, 2009Dick Armey has a nice op-ed in today’s Wall Street Journal. The piece, titled Washington Could Use Less Keynes and More Hayek, echoes points I made recently in criticizing the stimulus and advising President Obama on good stuff to read. Armey writes: Sound money policy, [Hayek argued], allowed the disparate knowledge of millions of [...
Zaring on the Panic of 1907
Posted on February 03, 2009With an antitrust angle to boot: The Panic of 1907, published last year by Robert Bruner and Sean Carr, is a good blow by blow account of the action stations nature of a financial crisis, in this case one that began with a freezing of the credit markets, blew up with an ill-timed effort to corner [...
Pssst Wall Street: Change the Name from Bonuses to “Making Work Pay” Credits
Posted on February 02, 2009President Obama, widely admired for his willingness and ability to engage in nuanced analysis, painted with pretty broad strokes when he attacked the bonuses recently paid by Wall Street banks: One point I want to make is that all of us are going to have responsibilities to get this economy moving again...
Is it just me, or is Brad DeLong little more than an ideological hack? Krugman, too.
Posted on February 02, 2009Hey, what a shock: Brad DeLong cites to a cursory and useless critique of the Efficient Market Hypothesis and declares it, with the author, “refuted.” Here’s Brad’s cite; here’s the original “refutation.” The complete list is absurd (there are five purportedly refuted doctrines, including “the case for privatization” and “individual retirement accounts...
Seriously, Alpha = 0? Have You Read the Bill?
Posted on January 28, 2009Not to harp on the same point over and over, but can anybody look at this list from the stimulus package with a straight face and claim that the absence of inefficient government spending (HT: Peter Klein)? $1 billion for Amtrak $2 billion for child-care subsidies $50 million for the National Endowment for the Arts $400 million for global-warming [...
Stop Brad DeLong!
Posted on January 27, 2009Few people in my small sphere of the world are taken as seriously as Brad DeLong, while still being as much of an ass as he is. The latest stems from his juvenile criticism of this masterful analysis of the stimulus situation by John Cochrane. Brad’s juvenile criticism is here...
Alpha = 0?
Posted on January 26, 2009Geoff’s post about Kevin Murphy’s recent slides and analytical framework for thinking about the stimulus are worth reading and if you haven’t yet. Here’s a link to the video. Here’s Murphy’s analysis in a nutshell for those who haven’t: A Framework for Thinking about the Stimulus Package Let G = increase in government spending 1-?= value [...
The Know Betters’ Stimulus Plan
Posted on January 26, 2009National Economic Council Chairman Larry Summers was on Meet the Press yesterday defending President Obama’s proposed fiscal stimulus plan, which is heavily weighted toward government spending and away from tax cuts (and, to the extent it reduces taxes, does so via tax credits without cutting marginal rates)...
Is the Stimulus Package Obama’s Patriot Act?
Posted on January 26, 2009Why are the proponents of the stimulus package so reluctant to have a serious, non ad hominem-laden debate about whether it will, in fact, stimulate the economy? Because that’s not really its point. As Steve Horwitz explains: Bottom line: the more that those of us who are skeptical continue to even refer to [...
“I Pledge to Be a Servant to Our President”
Posted on January 23, 2009I’m sorry, but this is just plain creepy. (Watch to the end.) It’s one thing to respect the President, to give him the benefit of the doubt, and to support him when he does the right thing. Hollywood would do well to do more of those things, and I will certainly do them for [...
Bork and the Antitrust Paradox Revisited
Posted on January 22, 2009The Harvard Journal on Law and Public Policy recently published a symposium on the contributions of Judge Robert Bork. Readers of TOTM might be interested in three essays on Bork’s enduring contributions to antitrust law from Judge Frank Easterbrook, Judge Douglas Ginsburg, and Professor George Priest...
Likely Monopolization Suit Targets
Posted on January 21, 2009I’ve written previously about the upcoming surge in monopolization enforcement deriving from a “perfect storm” of sorts, including: (1) an incoming administration dedicated to “reinvigorate antitrust enforcement,” (2) an outgoing administration heavily and publicly criticized for lack of monopolization enforcement, and (3) interjurisdictional competition between the US and EU as the world’s primary antitrust enforcer [...
George W. Bush’s stinky parting gift
Posted on January 20, 2009Bush has proved himself to be a statist, protectionist ignoramus on many occasions. But this, one of his final acts in office, is simply appalling: People in the southern French district of Lozeyron are having a hard time swallowing US President George W...
Sykuta on Bailing Out the Italians
Posted on January 20, 2009My friend and Missouri colleague, Mike Sykuta, sent me the following insightful comments about the expected Fiat/Chrysler deal: Today?s Wall Street Journal reports that Fiat is expected to announce a new partnership with Chrysler LLC that will, in the end, result in Fiat taking control of Chrysler...
More on Error Costs
Posted on January 20, 2009Speaking of error cost analysis, this paper from a trio of lawyers in the General Counsel’s Policy Studies’ group at the FTC has a section entitled “Error Costs: The False Positive/ Negative Debate.” A frustration for me in discussing the error cost issue with respect to antitrust policy is that many people do not seem [...
Kevin Murphy models the stimulus–and the results aren’t pretty
Posted on January 20, 2009A great video from the University of Chicago here with comments from John Huizinga, Kevin Murphy and Robert Lucas. John Huizinga also wonders if we’re calculating the costs. Robert Lucas is skeptical. But Kevin Murphy’s discussion is (not surprisingly) worth the price of admission (I only wish the video showed the slides)...
Tom Smith Gets Error Costs
Posted on January 20, 2009Here he is making the very basic but critical point while responding to Delong’s critique of classic liberalism: DeLong explains why classical liberalism/libertarianism is wrong. I agree with much of what he says. The problem is, and it’s a very basic mistake and I don’t understand why people keep making it, is that just [...
Microsoft Again. Really? Why?
Posted on January 20, 2009DG Comp is after Microsoft. Again. Here is the EU’s press release which states the obvious about the basis of the Statement of Objections : the Commission’s decision in the Windows Media Player decision renders illegal virtually any tie by a firm with a “dominant” share under EU law...
The heart of the matter
Posted on January 19, 2009David Evans gets to the heart of the matter: The problem that we now face involves fixing many different aspects of our financial system?from incentive systems that encouraged excessive risk taking (do we really believe bankers are innately more greedy than anyone else?), to financial engineers who didn?t think through the consequences of their innovations, to [...
What One Article Should Obama Read Tonight?
Posted on January 19, 2009Imagine what must be going through President-elect Barack Obama’s head today. Tomorrow he begins what must be the most stressful job on the planet (just look at before-and-after pictures of Presidents Clinton and Bush, both of whom appeared to age decades in only eight years)...
Kiesling on Sunstein, OIRA and Nudging
Posted on January 17, 2009A post that everybody should read over at Knowledge Problem in which Lynne Kiesling moves from behavioral economics to the design of fixed price default contracts in electricity markets to a Hayekian critique of the Sunstein-Thaler libertarian paternalist program to the following closing paragraph: In devising OIRA policy I?d like to hear Sunstein invoke another of [...
Should the Supreme Court Grant Cert in Rambus (Revisited, and Cross-Posted at Patently-O)
Posted on January 16, 2009[Rutgers Professor Michael Carrier recently posted as a guest at Patently-O arguing in favor of the FTC’s position in Rambus and the Supreme Court granting certiorari. I thought Professor Crouch might be interested in sharing with his readers a different perspective on the merits of the FTC’s petition for cert in Rambus sketched out in [...
Three from Brad DeLong
Posted on January 15, 2009Yesterday I criticized Brad DeLong for, essentially, acting like a child. Today I want to draw attention to three posts from Brad DeLong–in none of which does he act like a child. The first is this post, correcting his mistaken ad hominem attack on Glen Weyl...
More (less) on the costs of stimulus
Posted on January 15, 2009This is what I’m talking about in my last post: We can continue to debate the size and nature of the stimulus, of course, but roughly $800bn seems right and the mix of spending and tax cuts currently proposed also makes sense. Yeah, roughly $800,000,000,000, give or take a few zeros...
Disgorgement and Damages in Ovation
Posted on January 15, 2009A couple of weeks ago, I posted a blog discussing the FTC?s complaint against Ovation. One of the interesting factors of that complaint was the FTC?s decision to seek disgorgement of profits allegedly improperly gained as a result of the challenged acquisition...
Some sense on stimulus
Posted on January 13, 2009Apparently to some people, intellectual disagreements are intolerable, and those who disagree intellectually can only be the most pathetic, worthless thing on the planet: Republican hacks (of the “ethics-free” variety). I’m talking about Brad DeLong here...
What Influence Will the Section 2 Report Have? The Role of Political Ideology
Posted on January 12, 2009There has been a great deal of speculation and discussion in this blog and around the antitrust community regarding what will happen with the DOJ Section 2 Report. Rightly so. It is a document with the potential to influence both agency monopolization enforcement decisions, international antitrust enforcement, and U...
Epstein on the Economics of Fault in Contract Law
Posted on January 12, 2009A new paper from Richard Epstein came across my inbox via SSRN this morning, The Many Faces of Fault in Contract Law: Or How to Do Economics Right, Without Really Trying? Here’s the abstract: Modern law often rests on the assumption that a uniform cost/benefit formula is the proper way to determine fault in ordinary contract [...
500!
Posted on January 12, 2009So sometime between January 17th, 2006 and this post, I managed to accumulate 500 blog posts here at Truth on the Market. Not bad. Not quite at par with our recently-tenured David Hoffman’s 550 or so, but more than also recently tenured Bill Henderson’s 200...
Whole Foods Remand Update
Posted on January 10, 2009From the Blog of Legal Times: Yesterday, Friedman sided with the FTC?s interpretation of the D.C. Circuit?s three-way opinion. He will limit his role on remand, which is exactly what lawyers for the FTC said the D.C. Circuit wanted. The Whole Foods lawyers?including Dechert partners Paul Friedman (not the judge) and Paul Denis?urged Friedman to revisit [...
Some Links
Posted on January 08, 2009Economist Philip Cook on alcohol control policy at the Volokh Conspiracy Alex Tabarrok on President-Elect Obama’s visit to George Mason Cass Sunstein to head OIRA (is this evidence that I was wrong that the Obama regulatory regime will be built upon an intellectual platform of behavioral law and economics?) Manfred Gabriel explains Hart-Scott-Rodino Tom Smith (the most entertaining law [...
Taking On Lebron: What’s the Impact of a Gold Medal Performance?
Posted on January 08, 2009Stories like this one suggest that winning Olympic gold in Beijing have catapulted team members into better seasons. Here’s a quote from Lebron James: ?To win the gold just uplifted all of us into this season. A lot of people were wondering if we?d hit a wall because we played in the Olympics...
The Law Market
Posted on January 06, 2009The Law Market, Larry Ribstein’s new and important book with Erin O’Hara looks great and is available here from Oxford University Press. The book description from the website sets the stage: Today, a California resident can incorporate her shipping business in Delaware, register her ships in Panama, hire her employees from Hong Kong, place her earnings [...
AEA Meeting
Posted on January 02, 2009I’m off to the American Economics Association meeting in San Francisco tomorrow. Any of our loyal readers attending who want to try to meet, please let me know. Happy New Year!
Is Antitrust Too Complicated for Generalist Judges?
Posted on December 30, 2008One of the highlights of my recent time as Scholar in Residence at the Federal Trade Commission was the opportunity to work with some of the brightest minds around on antitrust issues on investigations and policy projects as well some academic projects...
Caplan on the Law as a Phony Discipline
Posted on December 30, 2008Bryan Caplan writes: At risk of offending my many friends in the legal academy, I think that law is a shockingly phony discipline. Virtually everyone - liberal, conservative, Marxist, libertarian, or whatever - imagines that the law conveniently agrees with what they favor on non-legal grounds...
More on Letter of Intent and Release Bargaining
Posted on December 30, 2008Last month I highlighted the story of DeMarcus Cousins, a blue chip high school basketball recruit who was playing a game of chicken with the University of Alabama-Birmingham (UAB) over signing his National Letter of Intent — the letter that commits a player to attend the university and imposes the penalty of giving up a [...
Economic Issues in the Ovation Complaint
Posted on December 29, 2008On December 16, 2008, the FTC filed a complaint against Ovation Pharmaceuticals that challenged its 2006 acquisition of the drug Neoprofen from Abbott. (The acquisition had fallen beneath the HSR thresholds and thus was not subject to an HSR investigation prior to consummation)...
Welcome Guest Blogger Mary Coleman
Posted on December 28, 2008Bill’s shift to emeritus status and move to Arizona are not the only changes at TOTM for the coming new year. We’ve also got some plans to make sure that we’re feeding our loyal readers a steady stream of law, economics, and business content...
Bill’s News
Posted on December 28, 2008There’s good and bad news for Truth on the Market, and I wanted to share both with our loyal readers. The good news: Bill, co-founder of this blog and stalwart of our early blogging days’ focus on securities regulation and corporate law and governance, has accepted a new, senior position at the University of Arizona Rogers [...
Dominant Incumbent, Meet the New Entrant
Posted on December 27, 2008The new Competition Law Center at George Washington University School of Law (see earlier post at ACP here), funded by a $5.1 million cy pres award from alum and plaintiff’s lawyer Michael Hausfeld (formerly of Cohen, Milsten Hausfeld and Toll, now Cohen, Milsten, Sellers and Toll) will be providing some competition to the nearby American [...
Top Ten Antitrust Articles of 2008
Posted on December 24, 2008Its the time for end of the year lists. In conjunction with Danny Sokol’s survey of nominations for article of the year in 2008 (here are last year’s entries and here’s my list of the top 10 from last year), and without further ado, here are my personal, idiosyncratic, completely non-scientifically derived top 10 [...
Presenting Complex Economic Theories to Judges
Posted on December 23, 2008This fascinating OECD document compiling submissions on the topic is a gold mine of observations on purported best practices for presenting economic testimony to judges and issues facing competition authorities and judges deciding complex antitrust cases on the basis of complex economic evidence...
Interim Final Rules Amending Parts III and IV Rules of FTC Rules of Practice Issued
Posted on December 23, 2008The FTC announced today that it has approved a notice adopting interim final rules amending Parts III and IV of its rules of practice. As boring as that sound, this is a big deal. Here is the Federal Register notice. There are a number of changes, for instance, deadlines are imposed to [...
DOJ Files Another Section 2 Case
Posted on December 23, 2008Press release here. Here’s an excerpt: The complaint alleges that post-acquisition Microsemi raised prices significantly on small signal transistors certified by the Defense Supply Center Columbus (DSCC), a component of the DOD, at the Joint Army-Navy Technical Exchange-Visual Inspection (JANTXV) and Joint Army-Navy Space (JANS) levels of reliability on its qualified manufacturers list or [...
Teachable Moments
Posted on December 22, 2008Don Boudreaux turns the Illinois corruption scandal into a teachable moment on rent seeking (HT: Todd Zywicki). By the way, there has never been a better time to read this. In another teachable moment story related to George Mason, my colleague Neomi Rao’s Constitutional Law students were treated to an end of the year lecture [...
The NOSMART Petition
Posted on December 18, 2008To: The 110th and the Incoming 111th United States Congress From: The National Organization of Silly Men Against Risk Taking (NOSMART) Distinguished Congressmen and Congresswomen: Our nation is in crisis. It is a nation of gamblers. If ever your help was needed, now is the time...
Comings and Goings at the FTC Office of Policy and Planning
Posted on December 17, 2008Congratulations to Maureen Ohlhausen, outgoing Director of the Office of Policy and Planning at the Federal Trade Commission, who is headed to a new position as Technology Policy Counsel at the Business Software Alliance, a nonprofit trade association that promotes innovation, growth, and a competitive marketplace for commercial software and related technologies...
Fool me once, shame on?shame on you. Fool me - you can’t get fooled again.
Posted on December 17, 2008I?d like to share a quote on banking industry regulation: ?To restrain private people, it may be said, from receiving in payment the promissory notes of a banker for any sum, whether great or small, when they themselves are willing to receive them; or, to restrain a banker from issuing such notes, when all his neighbours [...
Clearing the Way for an Organ Market?
Posted on December 17, 2008From the WSJ on potential legislation clearing the way for compensation to donors in the form of tax deductions: While the chilling effect of the federal ban has remained since 1994, the national transplant waiting list has more than quadrupled. This may be why organizations like the National Kidney Foundation, which has previously opposed all incentives [...
No Ovation for FTC’s Latest Enforcement Theory
Posted on December 17, 2008The Federal Trade Commission announced a puzzling complaint filed in a new consummated merger & monopolization case in the U.S. District Court for the District of Minnesota. Here’s the explanation of the case from the press release: The Federal Trade Commission today filed a complaint in federal district court challenging Ovation Pharmaceuticals, Inc...
Price Discrimination is Good, Part 3
Posted on December 16, 2008At Knowledge Problem, Michael Giberson collects anecdotal evidence on New York’s zone pricing ban, i.e. a prohibition on price discrimination. While gasoline prices are falling all over the country, the anecdotal evidence is that New York’s zone pricing ban is resulting in higher profits for retailers at the expense of consumers...
Zywicki on the Bankruptcy and the Bailout
Posted on December 16, 2008My colleague Todd Zywicki is in the Wall Street Journal today on the merits of bankruptcy along with some public choice: General Motors looks like a financially failed rather than an economically failed enterprise — in need of reorganization not liquidation...
Hamermesh on the Point of the Bailout
Posted on December 15, 2008Some simple economics and common sense: Governments intervene in markets all the time ? and they should, in order to make markets more competitive; to solve problems of externalities (which are ubiquitous); to resolve difficulties caused by individuals? shortsightedness, including the spurring of innovation; and to reduce transactions costs...
Kolasky on What Happens with the Section 2 Report
Posted on December 14, 2008William Kolasky (Wilmer Hale, and one of the frontrunners for the DOJ AG spot according to the rumormill) has an interesting piece in the Antitrust Source on the DOJ Section 2 Report arguing that while: even the objecting Commissioners would probably agree that the Justice Department Report does a good job analyzing particular types of exclusionary [...
Antitrust, The Bailout, and the Coming Boom in Monopolization Enforcement
Posted on December 13, 2008From the WSJ comes an editorial from Martin Neal Baily and Matthew Slaughter describe a forthcoming report from the Private Equity Council making the link between product market competition and productivity: A central theme of this report is the critical role that competitive product markets play in spurring productivity growth and boosting standards of living...
Law and Economics 2.0
Posted on December 12, 2008Readers of TOTM know that the future of law and economics is a frequent topic of discussion here, and a topic in which I am both personally invested and spend a good deal of time thinking about (see, e.g. my blog series on the future of law and economics here)...
The Devilish Details of Detroit’s Deal
Posted on December 10, 2008There are some pretty scary devils in the details of this Detroit bailout legislation. This WSJ article provides some specifics. Under the terms of the draft legislation, “the government would receive warrants for stock equivalent to at least 20% of the loans any company receives...
Whole Foods Brings It.
Posted on December 09, 2008“Now for the evidence,” said the King. “And then the sentence.” “No!” said the Queen. “First the sentence, and then the evidence.” So goes a famous passage of Lewis Carroll’s Alice in Wonderland...
Are We Reinvigorated Yet?
Posted on December 04, 2008Despite rumors, slogans, and “new” conventional wisdom to the contrary (See, e.g. here, here and the Obama campaign promise to “reinvigorate merger enforcement), it is apparently not the case that the current DOJ is not interested in enforcing the antitrust laws...
The D.C. Circuit Re-Disappoints in Whole Foods: An Analysis of the Amended Opinions
Posted on December 04, 2008Being a “glass is half-full” type of guy, I figured there was no way the D.C. Circuit’s decision on Whole Foods’ petition for rehearing en banc could turn out poorly: Either the court would grant the motion and correct the panel’s mistakes, or the court would deny the motion, setting up an attractive opportunity for [...
American Airlines Announces New Pricing Scheme
Posted on December 03, 2008At least, thats what the Onion (the go to source for antitrust humor, by the way) headline says: American Airlines Now Charging Fees To Non-Passengers December 1, 2008 | Issue 44?49 FORT WORTH, TX?Cash-strapped American Airlines announced a new series of fees this week that will apply to all customers not currently flying, scheduled to fly, or [...
Price Discrimination Is Good, Part I
Posted on December 01, 2008Price discrimination involves a firm taking advantage of different elasticities of demand for the same goods by charging different prices relative to marginal cost. Price discrimination is ubiquitous in our economy but remains a four letter word in policy and regulation circles...
Should the Supreme Court Grant Cert in Rambus?
Posted on December 01, 2008As noted, the FTC has exercised its right under 15 USC 56(a)(3) to petition for a writ of certiorari to review the judgment of the D.C. Circuit in its FTC v. Rambus. The FTC press release is here. The petition is here. The questions presented, as framed by the Commission are: 1...
Price Discrimination is Good, Part 2
Posted on December 01, 2008Yesterday I started a new TOTM feature on why price discrimination is good in light of the bad rap that the practice gets in public policy circles and with the public generally. Lest one believe that the examples of regulatory scrutiny of price discrimination in antitrust and regulated industries are special cases, a reader [...
Happy Thanksgiving!
Posted on November 27, 2008To TOTM readers. And Happy Thanksgiving and Retirement to my colleague, now of the Emeritus variety, Gordon Tullock.
FTC Seeks Cert in Rambus
Posted on November 25, 2008The press release is here. The petition is here. The questions presented, as framed by the Commission are: 1. Whether deceptive conduct that significantly contributes to a defendant?s acquisition of monopoly power violates Section 2 of the Sherman Act...
College Athlete Drives a Hard Bargain Over Letter of Intent
Posted on November 24, 2008Seth Davis (Sports Illustrated) has an interesting column on the intersection of two issues I hold near and dear: contracts and college basketball. For those unfamiliar, college recruits in football, basketball and some other sports sign National Letters of Intent (NLI) committing themselves to spend at least one full year at the college...
Principles for Bailout Management
Posted on November 21, 2008I had the pleasure last week of participating in a bailout panel at William & Mary Law School. The William & Mary Federalist Society, which hosted the event, asked each panelist to address three topics: what led to the current situation, how the bailout plan will (or won’t) fix things, and suggestions for implementing [...
The Butcher, the Baker and the Candlestick Maker (2.0)
Posted on November 19, 2008My colleague Tom Hazlett strikes again in Barron’s on Google’s transformation from its initial reluctance to advertise and its desire to stick to the non-profit sector to an unrelenting market driven approach to its discovery that search-term clicks were … well … profitable...
Bainbridge on the Cuban Insider Trading Case
Posted on November 18, 2008Professor Bainbridge offers a very detailed analysis of the complaint in the SEC’s case against Dallas Mavericks owner Mark Cuban.
Wanted: NSF Law and Social Science Program Director
Posted on November 18, 2008Last Spring, I had the pleasure of serving on the NSF Law and Social Science Advisory Panel. It was an honor to be invited and a fantastic experience that gave me exposure to accomplished interdisciplinary scholars in fields and perspectives with which I rarely have the opportunity to interact...
Doherty on Empirical Toolkits and the Future of ELS
Posted on November 18, 2008UCLA’s Joe Doherty is guest blogging over at ELS Blog and is first post is a must read for folks engaged in empirical legal studies generally which strikes at the heart of defining our enterprise. Doherty points out the tendency toward the adoption of narrow toolkits within fields (methodological differences between political scientists and [...
Top Ten Econ Blogs!
Posted on November 17, 2008TOTM has never been afraid of a little bit of self-promotion, but in this case, we’re happy to report that the promotion is coming from the outside. Craig Newmark, of the always excellent Newmark’s Door, has ranked us in the Top 10 “Really Best Economics Blogs...
Inter-Agency Teleseminar Showdown
Posted on November 17, 2008You may recall we’ve been blogging quite a bit about the FTC and DOJ scuffle over Section 2 (See here and here). On Thursday, December 11th, the ABA Antitrust Division is sponsoring a Teleseminar that will feature my former FTC colleague Ken Glazer (Deputy Director, Bureau of Competition, Federal Trade Commission), Bill Kolasky (WilmerHale, [...
“This Liberal Will Be All About Socializing … Uhhh … Basically … Taking Over and the Government Running All of Your Companies”
Posted on November 13, 2008That is from Maxine Waters (HT: Luke Froeb). It is increasingly difficult these days to figure out whether socialization/ nationalization is a threat or a promise. The clip is priceless. You can see her two colleagues getting a kick out of Waters’ rant (which starts about the 1:10 mark) in response to [...
Global Competition Policy Symposium on Section 5
Posted on November 11, 2008The newest issue in Global Competition Policy includes a symposium (disclosure: for which I was the senior editor) on Section 5 enforcement under the FTC Act. Contributors included Commissioner Rosch’s attorney advisor Kyle Andeer, Doug Melamed (WilmerHale) and Joe Sims...
My Encounter With Rahm
Posted on November 10, 2008The business section of yesterday’s New York Times included advice to President-elect Obama from a number of econ-types. Greg Mankiw, for example, exhorted Obama to heed the advice of his (quite capable) economic advisers and, in essence, govern from the center...
Taking Price Gouging Laws Seriously
Posted on November 10, 2008Over at Organization and Markets, Peter Klein notes that consumers have been exploiting producers by taking advantage of market conditions, reducing their demand for gasoline, and earning windfall profits.
Who Does Best on the GRE?
Posted on November 07, 2008Greg Mankiw links to a chart which provides the evidence (or click here for the larger version). The answer is physics (1899), math (1877), computer science (1862) and, of course, economics (1857) … followed by a handful of engineering majors and philosophy...
The Antitrust Rumormill …
Posted on November 06, 2008So, now that the election is over, it must be time to start speculating as to who will fill what spots in the Obama administration. I already made some predictions about what an Obama antitrust regime might look like, but who will be running the show at the DOJ and the FTC? The [...
Will This Be a Bull Market for Law and Economics?
Posted on November 05, 2008Larry Ribstein thinks so. The argument is that current economic conditions have exposed the costs of economic naivete and that now is the time for rational and serious discourse about the costs and benefits of specific regulations: The last election has revealed clearly the costs of economic cluelessness...
Antitrust under President Obama: “I will direct my administration to reinvigorate antitrust enforcement”
Posted on November 05, 2008Danny Sokol makes some predictions about Post-Obama antitrust, and about my disappointment in what he perceives to be the likely direction of antitrust policy in the Obama administration: 1. increased challenges of mergers and monopolization cases, especially at DOJ 2...
No Google-Yahoo Deal
Posted on November 05, 2008From the Google Public Policy Blog: In June we announced an advertising agreement with Yahoo! that gave Yahoo! the option of using Google to provide ads on its websites (and its publisher partners’ sites) in the U.S. and Canada. At the same time, both companies agreed to delay implementation of the agreement to give regulators the [...
Feeding at the trough
Posted on November 04, 2008I love it! Today saw the “biggest presidential election day rally [in the stock markets] in 24 years.” And why, you ask? Is it because the seemingly-certain Obama victory has calmed all our fears of economic catastrophe (to say nothing of terrorist-induced catastrophe)? Nope...
For you statist libertarians out there
Posted on November 03, 2008Tom Smith ups the ante with a brilliant post–far and away the best Obama endorsement I’ve seen yet. Here’s a taste, but head over and read the whole thing. Some may say, and you call yourself a libertarian. But I have decided I can be a kind of statist, big government, expansive regulation, high taxing, low [...
NY Times Endorses Pre-Chicago Antitrust
Posted on November 02, 2008The NY Times (HT: Danny Sokol) decided to run an editorial blasts the DOJ’s Section 2 Report, asserting that the “antitrust division is supposed to be the agency looking out for the interests of American consumers, not big companies ? a role it has clearly forgotten over the last eight years” citing the familiar bullet [...
Mr. Anti-Smith Goes to Washington
Posted on November 02, 2008Senator Barack Obama, October 30, 2008: You know I don?t know when, when they decided they wanted to make a virtue out of selfishness. Adam Smith, 1776: It is not from the benevolence of the butcher, the brewer, or the baker that we can expect our dinner, but from their regard to their own interest...
Obama “Voted With the Socialist” 92% of the Time
Posted on October 30, 2008The Mizzou campus is all atwitter today over a scheduled appearance this evening by the world?s biggest celebrity — my old constitutional law prof, Barack Obama. As I write this, I?m watching the Obama folks prepare for the rally, which is to take place on the quad my office overlooks...
Speaking of Resale Price Maintenance …
Posted on October 29, 2008It looks like the FTC is interested in doing more than just investigating RPM (see Thom’s excellent post), as the agency just announced a series of public workshops on the question of how best to distinguish pro-competitive uses of RPM from those that raise competitive concerns...
FTC’s Latest RPM Investigation: Sound and Fury Signifying Nothing?
Posted on October 24, 2008Once again displaying its tenacious devotion to old Dr. Miles, the FTC is investigating whether makers of musical instruments and audio equipment have engaged in illegal resale price maintenance (RPM). Yesterday’s WSJ reported that the Commission has issued subpoenas to a number of prominent musical instrument manufacturers, including Fender, Yamaha, and Gibson, as well [...
UC Irvine School of Law Update
Posted on October 23, 2008Dean Erwin Chemerinsky and UCI School of Law are in the news. WSJ Law Blog reports on a little scuffle between Chemerinsky and Second Circuit Chief Judge Jacobs about the purported public interest mission of the law school whether it entails a distinct political leaning...
The End of Libertarianism?
Posted on October 23, 2008Not so fast, says Will Wilkinson is this must read (and well earned) dismantling of Jacob Weisberg’s recent Slate column which has been getting a lot of attention: If you think ?libertarianism? caused the financial crisis, you?re either stupid or dishonest...
First Annual FTC Microeconomics Conference: November 6-7
Posted on October 23, 2008I think conferences like this are an effective way to attract talented economists to work on interesting antitrust problems. I can envision a similar event from the Bureau of Competition or policy shops featuring academic research from law and economics scholars...
Antitrust Contests
Posted on October 23, 2008Director of the FTC Bureau of Economics Michael Baye posted slides of Antitrust Contests from a conference presentation in Stockholm. I am a co-author on the project along with FTC economist Paul Pautler. The paper is an attempt to structurally estimate a Tullock contest model of antitrust litigation using some unique data on [...
“Screw off, John”
Posted on October 21, 2008Emailed James Heckman in response to fellow the Milton Friedman Institute (MFI) committee member John Cochrane, who had warned Heckman about his publicly expressed views that he was open to considering changing the name of the MFI and that at least some of the now well-cataloged objections to the MFI were rooted in the view [...
Fannie and Freddie as “Greater Fools”
Posted on October 18, 2008Today’s New York Times features an op-ed by Michigan Law Professor Michael Barr and former Clinton advisor Gene Sperling that (somewhat predictably) blames our current financial mess on a lack of “common sense regulation” and exonerates the Community Reinvestment Act, Fannie Mae, and Freddie Mac...
Some Links
Posted on October 16, 2008Henry Manne offers his thoughts on the financial crisis and the increasing role for those who understand markets to play in the new regulatory age Larry Ribstein defends the Illinois no-LSAT admission program Krugman on Krugman A conference on property rights I wish I could attend featuring a keynote from Harold Demsetz, my early frontrunner for the Nobel [...
Reverse Payments Ripe for Cert?
Posted on October 16, 2008The Federal Circuit came down on the side of rule of reason analysis, and no liability, in a reverse payment case in Cipro (HT: Antitrust Review and Patently-O): Since there was no basis for the district court to confidently predict that the Agreements at issue here would be found to be unlawful under a rule of [...
FTC v. DOJ on Section 2: Just Different Priors?
Posted on October 15, 2008Turns out the Global Competition Policy issue on Reviewing the DOJ Report on Competition and Monopoly, in addition to the articles I pointed to in this post, has added a few more responses to the Report, the FTC Response, and what the schism might mean for antitrust enforcement over the next several years...
Kieff on Quanta v. LG Electronics
Posted on October 14, 2008Scott Kieff (Wash U., Hoover Project on Commercialization Innovation) has posted a paper on Quanta v. LG Electronics: Frustrating Patent Deals by Taking Contracting Options off the Table?: The Supreme Court’s unanimous decision in Quanta v. LG Electronics may make it significantly more difficult to structure transactions involving patents...
Abuse of Plaintiff Win Rates as Evidence that Antitrust Law Is Too Lenient
Posted on October 14, 2008I was recently reading Dean Chemerinsky (Irvine Law) on the Roberts Court at Age 3. One of Chemerinsky’s standard takes when he talks about the Roberts Court is that the Court’s pro-business stance is one of its defining characteristics. Readers of the blog will know that I’ve been critical of Chemerinsky for his [...
Google Yahoo Deal Update
Posted on October 14, 2008The Wall Street Journal offers an update on the settlement talks with DOJ over the Google-Yahoo deal, which includes some interesting details about possible concessions to get the deal through: In the settlement talks with the government, both companies have discussed concessions...
GCP on the Section 2 Report Schism
Posted on October 13, 2008Global Competition Policy has a trio of interesting articles on the DOJ Section 2 Report, and FTC response, which I’ve blogged about here and here from Tim Brennan, William Kolasky and Mark Popofsky. The abstract from Popofsky’s article gives a sense of the scope and importance of the issues here: The U...
Krugman Wins
Posted on October 13, 2008Here’s the announcement. The Prize is for his “analysis of trade activity and location of economic activity.” Tyler Cowen has a lengthy write up with lots of links and information. The WSJ article is here. Here’s Krugman in the NYT: “There was something very beautiful about the old existing trade theory, and its ability to capture [...
A Bad Picture for McCain
Posted on October 11, 2008SOURCE: The State of the Union (HT: Right Coast).
Nobel Watch
Posted on October 11, 2008We’re now very close to the Nobel announcement which is expected Monday morning. Tyler Cowen favors Williamson and Tirole because they might want “to bring it down to earth and also they might wish to choose a Frenchman.” Peter Klein favors a prize for organizational economics and, I have a hunch, favors Williamson...
Citigroup, Wachovia, and Wells Fargo: Round Three
Posted on October 10, 2008For those who have missed it, Citigroup announced almost two weeks ago an agreement in principle with Wachovia to acquire for $2.1 billion Wachovia?s retail banking operations. Four days later, Wells Fargo jumped the deal, announcing a merger agreement signed by both boards for Wells Fargo to acquire all of Wachovia...
Posner’s Definition of a “Private Sector” Response
Posted on October 09, 2008Many observers have been shocked by the level of government involvement in the U.S. economy in recent days. Among other things, the government has (1) bailed out an insurance company that got “too big to fail,” (2) decided to spend up to $700 billion buying the distressed assets of financial firms (and apparently directly [...
May Treasury Buy Newly Issued Securities of Ailing Financial Firms?
Posted on October 07, 2008Last week I posted about Lucian Bebchuk’s thoughtful bailout plan, which would have expanded Treasury’s powers to include the ability to make direct investments in ailing financial firms (as opposed to just buying their distressed assets)...
What Did Twombly Do Anyway?
Posted on October 07, 2008Here is a very interesting empirical paper examining post-Twombly pleading from Martin Redish and Lee Epstein describing the state of affairs at the appellate court level, they write: To briefly summarize the state of the appellate doctrine on the issue: (1) two circuits (the D...
Commissioner Rosch v. Economics, Again
Posted on October 07, 2008I’ve been critical of the Federal Trade Commission, and particularly Commissioner Rosch, for embracing what I think is a dangerously obsolete view of the role of economics in antitrust. First, it was the Section 2 Report response and before that, it was Commissioner Rosch’s observation that “any kind of economic analyses that require the [...
Everything you wanted to know about the Citigroup-Wachovia-Wells Fargo Debacle
Posted on October 06, 2008Coverage of the Citigroup-Wachovia-Wells Fargo situation has revealed many fundamental misunderstandings of various aspects of the debacle, such that I wanted to offer my thoughts on a few points that have been curiously misstated: 1. A discussion of ?fiduciary outs? is a bit of a non sequitur here...
Wachovia Complaint and Status Check
Posted on October 05, 2008The Wachovia and Citigroup litigators have been working overtime this weekend. As I reported earlier, Citigroup convinced New York State Justice Ramos late last night to toll the expiration of the Citigroup-Wachovia exclusivity agreement that was set to expire tomorrow, October 6, 2008...
Wachovia, Wells Fargo, and Citigroup - Score one for Citigroup!
Posted on October 05, 2008Last last night, a New York judge issued an injunction tolling the termination of Wachovia’s Exclusivity Agreement with Citigroup. In addition, the judge set a show cause hearing date for next Friday to sort out the issue of whether Wachovia’s pending merger with Wells Fargo should be enjoined as a violation of Wachovia’s exclusivity agreement [...
Easterbrook (Gregg, not Frank) Up a Creek
Posted on October 05, 2008Here?s another reason?as if you needed it?as to why getting a reasonable bailout of the mortgage-backed securities market through Congress was so difficult. Below I reproduce an analysis from Gregg Easterbrook of the Brookings Institute: Supposing we assume the bailout is required, here is what bothers me about the plan so far: Taxpayers don?t get stock, [...
Exclusivity Agreements, the Bailout Act, and Section 126(c)
Posted on October 05, 2008The Wachovia-Citigroup-Wells Fargo dance continues. Now, however, it seems to involve confusion about Section 126(c) of the newly adopted Emergency Economic Stabilization Act (?EESA?). Allow me to take a stab at clarifying. To bring everyone up to speed, last weekend, after Lehman was allowed to go belly-up and Washington Mutual was seized by the FDIC, the [...
Armen Alchian Plays Prisoners’ Dilemma
Posted on October 05, 2008Many economists know of the famous repeated prisoners’ dilemma experiments played by famous economists. I recently came across this old post from Brad Delong with an excerpt from Poundstone (1992) which recounts a game between Armen Alchian (who should win the Nobel Prize this year) and Rand economist John Williams...
Hazlett on Net Neutrality and Antitrust
Posted on October 05, 2008My colleague Tom Hazlett has an interesting piece in the Financial Times chiming in on the network neutrality debate. Hazlett makes the point that if “competitive harm” is the concern, isn’t antitrust the answer rather than regulation of this sort? Hazlett writes: But rather than enforce such [disclosure] rules, the FCC launched regulatory attack by asserting [...
Is This Finally the Year for a UCLA Economics Nobel?
Posted on October 03, 2008Its a fall ritual here at TOTM. Every fall when the Nobel speculation starts I make a prediction, Geoff bets the field against my prediction, and I lose. But at least I’ve been consistent with my predictions and certainly in my rooting interests...
Citigroup, Wachovia, Wells Fargo, the Exclusivity Agreement, and Specific Performance… and the Huntsman Opinion
Posted on October 03, 2008On Monday, Citigroup announced that it had reached an agreement in principle to acquire some of Wachovia?s assets. Today, Wachovia announced it was being wholly acquired by Wells Fargo in a stock deal. Citigroup responded with outrage, announcing that Wachovia was in breach of its Exclusivity Agreement with Citigroup...
Coate on Unilateral Effects at the FTC
Posted on October 01, 2008FTC economist Malcolm Coate has posted Unilateral Effects Under the Guidelines: Models, Merits and Merger Policy to SSRN. Here’s the abstract: This paper models FTC unilateral effects merger policy using a broad sample of 153 investigations undertaken between 1993 and 2005...
Hexion v. Huntsman: Vice Chancellor Lamb’s Must-Read Opinion For Deal Lawyers
Posted on October 01, 2008On Monday night, Delaware Vice Chancellor Lamb issued an opinion in the epic Hexion v. Huntsman battle, ordering Hexion to perform its obligations under its 2007 agreement to acquire Huntsman. The opinion is well worth reading for deal lawyers ? it offers a good tutorial on how private equity deals can fall apart, how merger [...
The Price of Gas in Antlers, OK
Posted on September 30, 2008From the DOJ: A federal grand jury in Oklahoma returned a one-count indictment today charging Kwik-Chek Food Stores Inc., a Texas-based convenience store company, and one of its agents, Jarrod “Judd” [...]
Antitrust and Health Care
Posted on September 30, 2008Barak Richman (Duke) and James Blumstein (Vanderbilt) have an interesting exchange at PENNumbra, University of Pennsylvania School of Law’s online forum for debate surrounding scholarship in the U. Penn. L. Rev. Here’s the abstract from Professor Richman’s article: Courts reviewing proposed mergers of nonprofit hospitals have too often abandoned the bedrock principles of antitrust law, failing [...
Financial Crisis Explained
Posted on September 30, 2008See here (it’s from February, but I hadn’t seen it until it was forwarded to me today so it may be a waste of your time BW).
A Separate FTC Section 2 Report?
Posted on September 29, 2008I’ve discussed some problems with the FTC statement in response to DOJ’s release of the Section 2 Report. In particular, I criticized some of the anti-economic rhetoric in the FTC statement. I wrote: What really bothers me is the Commissioners? failure to consider, at least seriously consider, the evidence and engaging in this anti-economic rhetoric all [...
A Open Letter From Steve Horwitz
Posted on September 29, 2008To his friends on the left on accepting and understanding the role that regulation has played in the current financial mess despite calls to chalk the whole thing up to knee-jerk ideological deregulatory policies. Greg Mankiw also calls out Senator Obama for offering a distorted version of history in the Presidential debate.
Now that the Bailout Has Failed, How About Bebchuk’s Plan?
Posted on September 29, 2008I’ve avoided saying anything at all about the bailout because (1) I’m not an expert on banking, finance, etc. and (2) events are moving so fast I can’t keep up with the latest proposal. Nonetheless, since the bailout bill has just failed, this might be an opportune time to consider an alternative to the [...
Cartel Enforcement and the Election
Posted on September 29, 2008From an excellent short article by Dan McInnis (Akin Gump) on the potential impact of the election on cartel policy in Global Competition Policy: Antitrust policy has played little role in the election. Indeed, at least for cartel policy, there may be little to differentiate the candidates...
Questions on the Bailout
Posted on September 29, 2008From Peter Klein: Over and over during the last week we?ve been told that unless Congress, the Treasury, and the Fed ?take?bold action,? credit markets will freeze, equity values will plummet, small businesses and homeowners will be wiped out, and, ultimately, the entire economy will crash...
The Costs of International Antitrust Enforcement and Superficial Convergence
Posted on September 29, 2008There is an interesting profile on Intel in the WSJ. While the profile focuses on some of the technological and competitive challenges facing Intel and CEO Paul Otellini, the CEO mentions the proliferation of antitrust laws across the globe, and the uncertainty associated with regulatory costs in such an environment, as one of the major potential impediments facing [...
AIG/NY Fed Credit Agreement
Posted on September 27, 2008available here. From the 8-K: On September 22, 2008, American International Group, Inc. (?AIG?) entered into an $85 billion revolving credit facility (the ?Credit Facility?) and a Guarantee and Pledge Agreement (the ?Pledge Agreement?) with the Federal Reserve Bank of New York (?NY Fed?)...
N-Data Settlement Approved 3-1
Posted on September 26, 2008The public comment period has closed and the N-Data settlement has been approved by a vote of 3-1 with Chairman Kovacic voting against (his earlier dissent is here). I think is a sleeper candidate for one of the most important antitrust events of the year as it potentially signals a remarkable expansion of the Commission’s [...
How About a Little Personal Responsibility?
Posted on September 25, 2008I was reading an article last week about the SEC temporary ban on short-sales and came across the following quote: Short-selling can contribute to efficiency while adding liquidity to the markets. But a recent wave of the maneuvers — profiting by selling unowned shares of companies in the anticipation their prices will drop — has been [...
Geradin on Loyalty Rebates
Posted on September 24, 2008Damien Geradin has posted an interesting paper on “Separating Pro-competitive from Anti-competitive Loyalty Rebates: A Conceptual Framework.” Here’s the (long) abstract: In its submission to the recent OECD Roundtable on Bundled and Loyalty Discounts and Rebates (the “OECD Roundtable on rebates“), Korea observed that “loyalty discounts are getting growing attention both academically and practically” and [...
Antitrust Week in Chicago
Posted on September 18, 2008Speaking of law and economics in Chicago, its the place to be for antitrust next week. On Thursday, the FTC at 100 series will continue at Northwestern University School of Law where I’ll be on a panel discussing the FTC’s competition mission after lunch along with Thomas Campbell, Randy Picker, and Robert Pratt...
Nothing to See Here, Move Along …
Posted on September 18, 2008You’ve got questions about Freddie Mac? They’ve got answers. Here’s my favorite: Does Freddie Mac pose financial risk to American taxpayers? No. Many independent, formal studies ? conducted by government agencies and private rating agencies ? confirm that Freddie Mac is adequately capitalized and manages its business risks well...
The Fed’s Bail-out of AIG and Shareholder Equity
Posted on September 18, 2008The Federal Reserve Bank of New York’s announcement of an $85 billion bail-out of AIG came as a shock to many of us, and the precise terms of the lending agreement underlying the bail-out are still unclear. In an e-mail to the BIZLAW listserv, Professor Bainbridge rightly queried how AIG could have offered the Fed secured [...
Odd FTC Consent in Vertical Licensing Case
Posted on September 17, 2008The FTC announced a complaint today challenging Fresenius Medical Care AG & Co.’s proposed acquisition of an exclusive sublicense from Luitpold Pharmaceuticals, who is in turn a wholly owned subsidiary of a Japanese firm Daiichi Sankyo Company...
Bainbridge on Law & Economics at Chicago
Posted on September 17, 2008Motivated by Justice Scalia’s remark (HT: Brian Leiter) that the University of Chicago Law School is not what it once was and “has lost the niche it once had as a rigorous and conservative law school,” Professor Bainbridge notes that: It?s certainly true that, from the outside, Chicago now looks like your run of the mill [...
An Unsurprising Result
Posted on September 16, 2008The Irish Competition Authority releases a report offering the stunning finding that ?The retail planning system limits competition among grocery retailers and as a result consumers are not getting the best possible choice or value for money.” HT: Danny Sokol...
Baker on the Dueling Bush Administration Antitrust Agencies
Posted on September 15, 2008Jonathan Baker (American) has a column at The New Republic focusing on a different aspect of the FTC vs. DOJ scuffles over antitrust policy. Baker claims that the DOJ is engaging in what he describes as “deregulatory radicalism that allows monopolies to spin out of control,” while he is largely supportive of FTC [...
Inter-Agency Scuffling Over Section 2: What Role for Economists and Economics at the FTC and DOJ?
Posted on September 12, 2008Much has already been written about the strained relationship between the FTC and DOJ in antitrust matters. There is no more entertaining description of these strains than Chairman Kovacic’s description of the sister agencies as “an archipelago of policy makers with very inadequate ferry service between the islands” and ?too many instances when you go [...
Best Paper Title at CELS?
Posted on September 11, 2008Unfortunately, I’m missing this year’s Conference on Empirical Legal Studies at Cornell. But I spent the morning skimming the program and came across the following from Ilya Beylin & Anup Malani: Finding Love in the Wreckage: Estimating Spousal Altruism with Data on Fatal Car Accidents...
Dr. Miles is Dead. Now What?
Posted on September 11, 2008As regular readers of this blog will know, I was pretty stoked when the Supreme Court finally overruled its infamous Dr. Miles decision. The Leegin Court?s holding that minimum resale price maintenance (RPM) is not per se illegal constituted a major step toward an economically rational and theoretically coherent approach to vertical restraints...
Teaching Antitrust
Posted on September 07, 2008I’m two weeks into the semester here at UT, and the antitrust course. I’ve made a few changes to the course this year. Specifically, I’m using the new 2nd edition of the Gavil, Kovacic and Baker. So far so good on that front on adjusting to the new edition...
A High Profile Test Case for the Chinese Antimonopoly Law
Posted on September 05, 2008Coca-Cola and China’s Huiyuan Juice Group Ltd $2.4 billion deal looks like it is set to be the first major merger test for the China’s new AML. This WSJ story gives some sense of market shares and potential market definition issues: Defining the market could be tricky...
Mississippi Declares Supply, Demand Illegal
Posted on September 04, 2008Hotel owner to face $1000 fine and up to six months in jail after after enforcement of state price-gouging law (HT: Knowledge Problem). Oh, and the AG would also like the power to declare a state of emergency for the sole purpose of enforcing the price-gouging law in response to some crafty business owners who [...
Data on Congressional Voting Records for Presidential Candidates
Posted on September 03, 2008I don’t like blogging about politics except when there is some antitrust angle. This, for reasons that are obvious but still disappoint me, doesn’t happen too often (but see here and here). My general disinclination to blog about politics is that it isn’t my area of expertise and I don’t think I [...
Merging to Second Best
Posted on September 03, 2008Luke Froeb, Mikhael Shor and Steven Tschantz have just posted an interesting looking model of mergers in auction settings where the incumbent firm has an advantage in subsequent auctions. The model captures the intuition that sometimes a mergers creating a “second-best” rival can result in more more aggressive bidding and result in lower prices even [...
George Mason Law Review Antitrust Symposium
Posted on September 03, 2008The George Mason Law Review 12th Annual Symposium on Antitrust will be held on December 4th at the Ronald Reagan Building and International Trade Center. This is typically a very well organized and well attended event. This years theme is “Antitrust Policy in the New Administration,” and will feature addresses from Judge Douglas [...
Howard Stern and Unilateral Effects
Posted on September 02, 2008That’s a catchy title for a merger conference (HT: Danny Sokol). The program faculty include: David L. Meyer, Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice, Ketan P. Jhaveri, Senior Associate, Simpson Thacher & Bartlett LLP, Charles E...
Harold Demsetz: From Economic Man to Economic System
Posted on September 01, 2008Just when I thought I had read it all, and re-read most of it a few times, Harold Demsetz releases a new book, From Economic Man to Economic System (Cambridge University Press, table of contents available here). My colleague Lloyd Cohen has a very nice blurb that captures the spirit of Harold’s work: This lovely set [...
Cross-Price Elasticity of Demand, Diddy Edition
Posted on September 01, 2008It’s not quite a bump in scooter sales or farmers switching from tractors to mules in response to rising gasoline prices: The hip-hop mogul said he is now flying on commercial airlines instead of in private jets, which Combs said had previously cost him $200,000 and up for a roundtrip between New York and Los Angeles...
AALS Agency, Partnerships and LLCs Section Call for Papers
Posted on August 31, 2008Larry Ribstein is organizing the upcoming AALS session of agency, partnerships and LLCs and has posted the following call for papers: The Section on Agency, Partnerships and Limited Liability Companies is calling for papers for the 2009 AALS Annual Meeting in San Diego...
Welcome D.C. Circuit Law Clerks to our Whole Foods Coverage
Posted on August 28, 2008Our friends at Antitrust Review point to the Petition for Rehearing En Banc in Whole Foods. As readers of the blog will know, Geoff and Thom have been exhaustively covering the Whole Foods litigation. Now, their latest efforts have been cited by the parties in the Petition (see n...
Antitrust Links
Posted on August 28, 2008Luke Froeb (and the WSJ) on learning about potentially anticompetitive mergers from false negatives The Onion does antitrust (its a bit old, but still quite funny) Rumors of Microsoft investigation in China pickup again … Antitrust Review links to the petition for rehearing en banc and motion to disqualify the Commission as the administrative law judge in Whole [...
Gordon Tullock Retires From George Mason
Posted on August 24, 2008News like this, is in no small part due to men scholars like Gordon Tullock whose presence at the law school was a significant one. Gordon announced his retirement today (HT: Boettke). In the coming days, there will likely be a number of statements of admiration of Gordon and his work from people who knew [...
Searle Center Events this Fall
Posted on August 24, 2008Northwestern University’s Searle Center on Law, Regulation and Economic Growth is one of the most intellectually interesting and active centers for law and economics around. Here’s a lineup of research roundtables and conferences scheduled for this fall...
Antitrust Fallacies of Fact and Theory
Posted on August 22, 2008Steve Hurwitz as a characteristically thoughtful and provocative post over at Austrian Economists on identifying the most dangerous fallacies of fact and theory in economics that a reasonably informed layperson would believe. Steve’s nominations are that the average person believes that the “economic well-being of the average American is on the decline” (fallacy of [...
FTC at 100 Online Forum
Posted on August 21, 2008We’ve mentioned the FTC at 100 self-assessment project before. The FTC at 100 home page is available here and has links to webcasts and other relevant material. The webcast of the July Washington DC event is already up. The next scheduled events are in Chicago at Northwestern University in September and Boston [...
Some Links
Posted on August 21, 2008Some blog posts I’ve been reading: Professor Bainbridge makes a lot of sense on the case against the Socratic Method in law teaching (so does Gordon Smith). By the way (and the Professor probably does not remember this), but he also gave me very good advice when I went on the job market in 2004...
Obama v. McCain Debate Antitrust?
Posted on August 19, 2008Well, not exactly. But the under card sponsored by the DC Bar is still pretty impressive: James Rill (Howrey, representing McCain) v. Bill Kolasky (Wilmer Hale, representing Obama) September 24 at GW Law School. HT: Antitrust Review.
Life After Dr. Miles
Posted on August 18, 2008An article in today’s WSJ, Price-Fixing Makes Comeback After Supreme Court Ruling, reports that minimum resale price maintenance (i.e., the setting of minimum retail prices by product manufacturers) is increasing in light of last summer’s Leegin decision...
Why Antitrust?
Posted on August 16, 2008As the start of the new academic year inches closer, and students are deciding what courses to take, I thought I’d give a little plug to antitrust law. I’ve seen enrollment in antitrust courses vary dramatically over the past 10 years or so since I was a student and now as a professor...
Antitrust Source: Required Antitrust Reading for the Next Administration
Posted on August 08, 2008In the current issue of Antitrust Source, including my own submission which I blogged about here.
Optimal Regulatory Design, Fragmentation, and Abolition
Posted on August 07, 2008In response to my post about the optimal institutional design for merger enforcement and the problems associated with dual federal enforcement, a reader points me to this related paper by Jon Klick, Francesco Parisi, and Norbert Schulz in the International Review of Law and Economics which models alternatives for allocating decision-making across multiple agencies...
Corporate Assassinations and Antitrust
Posted on August 06, 2008Over at Overcoming Bias, they are asking the following question: Given how little it seems to cost to have someone killed, why don’t more corporations have their competitors’ leaders knocked off? There are interesting answers in the comments suggesting that perhaps these killings or rival firms’ leaders are more common or more costly than commonly thought...
International Antitrust Explosion in the FT
Posted on August 06, 2008Financial Times (HT: Danny Sokol) highlights the problem of multi-jurisdictional antitrust enforcement, emphasizing the rise of India and China. The article repeats the basic point, worth repeating, that international cooperation can help avoid bad outcomes with multiple regulatory stakeholders with different incentives and institutional environments: That is not a criticism of the new competition rules in [...
Wolfers on the Decline of Happiness Inequality
Posted on August 06, 2008Part 1, Part 2, and Part 3. Here is the paper with Betsey Stevenson.
More Milton Friedman Institute Commentary
Posted on August 04, 2008While much has been said about the recent Milton Friedman Institute scuffle at the University of Chicago (including here at TOTM here), Chicago GSB Professor John Cochrane’s scathing comments on the original Protest letter have stirred up some additional commentary worth reading...
Antitrust Survey
Posted on August 04, 2008Danny Sokol is conducting a survey of private practitioners for an empirical project examining how antitrust law shapes compliance. The survey is here.
The Price of Merger Approval and Triple Federal Enforcement
Posted on August 02, 2008Geoff and Thom (see the comments) continue to have the Whole Foods litigation covered. I don’t and can’t have anything to add to their comments about the particulars of the litigation. I will note, playing off my previous post on bad case law out there looking to be overturned, that there is significant demand for [...
The unfortunate return of the “strange, red-haired, bearded, one-eyed, man with a limp”
Posted on July 29, 2008The DC Circuit has reversed the district court in the Whole Foods case. The opinion is here. [HT: Danny Sokol] As regular readers know, we have covered this case extensively on this blog, including most recently this great, lengthy post from Thom on the proper standard of review...
Say on Pay in the UK
Posted on July 28, 2008An interesting new paper by Ferri and Maber entitled Say on Pay Vote and CEO Compensation: Evidence from the UK has recently been posted on SSRN. Here’s the abstract: In this study, we examine the effect on CEO pay of new legislation introduced in the United Kingdom (UK) at the end of 2002 that requires [...
New NIE Book Available
Posted on July 23, 2008New Institutional Economics: A Guidebook (Brousseau and Glachant eds., CUP 2008) is available. HT: Peter Klein. This looks like a wonderful collection of papers and a must-have resource for those interested in NIE, law and economics, or institutions more generally.
The Demise of Property Rights Has Been Greatly Exaggerated …
Posted on July 23, 2008My colleague Tom Hazlett (George Mason University) has a characteristically thoughtful and provocative column in the Financial Times on the recent Clearwire joint venture and what it tells us about the “innovation commons” and current public policy debates such as network neutrality, spectrum property rights, and municipal wi-fi...
Autism Misinformation Continues
Posted on July 22, 2008First from McCain, who first claimed that there was “strong evidence of a link between vaccines and autism” and now has since revised his position acknowledging that there is no scientific evidence supporting such a link and emphasized his support for autism research...
A $66.5 Million Math Error?
Posted on July 22, 2008Wow…: GSA officials were asked recently to reassess the total cost of donated items in what the agency called a routine audit. “In doing so, it was determined that some of the unit costs were ‘eaches’ and others were ‘for-case’ lots...
What is the Worst Antitrust Decision That is Good Law?
Posted on July 22, 2008There’s been a bit of discussion about the “most destructive” decision that is good law around the blogs, e.g. here and here, in response to John McCain’s criticism of Boumedine calling it “one of the worst decisions in the history of this country...
Recommended Antitrust Reading for the Next Administration
Posted on July 21, 2008The August issue of the Antitrust Source will feature several short contributions from lawyers, judges, professors, and economists in the antitrust community suggesting some recommended reading (a book, scholarly article, or judicial opinion) for the transition team members of the new administration...
Bainbridge on Diversity at UCI Law School
Posted on July 20, 2008Professor Bainbridge sees an interesting tension in the successful initial hiring at the UCI Law faculty: Liberals like Chemerinsky say that affirmative action is necessary so that a school can ?look like? the community it serves. In this case, however, it seems to be okay with just about everybody that Chemerinsky?s law school doesn?t reflect [...
The Filesharing Debate Gets Ugly
Posted on July 18, 2008David Glenn brings us the latest in the filesharing dispute. HT: Peter Klein, who says sensible things about the newest, and ugliest piece of the controversy: Strumpf suggests that Liebowitz is pressing the issue so zealously because Liebowitz?s center at UT-Dallas receives funding from the RIAA and ?other commercial interests,? a charge I find shockingly inappropriate [...
More From Henry Manne on The Future of Law and Economics
Posted on July 14, 2008The following email from Henry Manne takes up our previous discussion of the future of law and economics (available here in downloadable form) and is published with permission. I’ve inserted a few links where Manne references a few blog posts responding to our earlier discussion...
University of Chicago Conference on China
Posted on July 14, 2008Program is here (HT: Spontaneous Order). Attendees and presenters include Coase, Cheung, Tullock, Demsetz, North, Peltzman, and many others. The conference is from July 14th-18th.
More on the Milton Friedman Institute
Posted on July 12, 2008Dan Drezner raises the plausible possibility that the real reason for the objection of some 8% (101) of the full-time faculty to the Milton Friedman Institute at the University of Chicago, which we blogged about earlier here, is “grounded less on ideology and more on an effort to ensure these departments get a bigger slice [...
Baker on Market Concentration and Horizontal Mergers
Posted on July 11, 2008Jonathan Baker (American University) has posted Market Concentration in the Antitrust Analysis of Horizontal Mergers to SSRN. Baker’s article is another of the entries which will be appearing in the forthcoming Antitrust Law and Economics volume edited by Keith Hylton (Elgar Publishing) (see this post for links to others)...
Two Promising International Antitrust Resources
Posted on July 11, 2008Antitrust Encyclopedia (HT: Antitrust Hotch Potch) and Antitrust World Reports. Both have been added to the blogroll.
Kobayashi on the Law and Economics of Predatory Pricing
Posted on July 10, 2008My colleague and co-author Bruce Kobayashi has posted The Law and Economics of Predatory Pricing to SSRN and is forthcoming in Keith Hylton’s Antitrust Law and Economics volume (Edward Elgar Publishing). It is a comprehensive and insightful review of the expansive legal and economic literatures on this topic...
A Few Thoughts on Privacy and Antitrust
Posted on July 08, 2008In the comments to this post, Peter Swire (Ohio State) points to some recent comments (see also here and here) he submitted to the Federal Trade Commission on how to incorporate privacy into conventional antitrust analysis. The privacy and antitrust link appears to be something that will receive quite a bit of attention in the [...
Richman on Institutional Economics and Concerted Refusals to Deal
Posted on July 08, 2008Barak Richman (Duke) has posted The Antitrust of Reputation Mechanisms: Institutional Economics and Concerted Refusals to Deal to SSRN (forthcoming in the Virginia Law Review). Here’s the abstract: An agreement among competitors to refuse to deal with another party is traditionally per se illegal under the antitrust laws...
Liebowitz’s Reply to O/S on Filesharing
Posted on July 07, 2008[See Update Below] Stan Liebowitz has posted a reply to Oberholzer-Gee/Strumpf’s (O/S) referee report/ reply to Liebowitz’s original comment submitted and rejected by the JPE for publication (got all that?) (HT: Newmark and Peter). Stan includes email exchanges between himself and OS concerning access to the data (O/S did not allow access), copies of [...
Picker on Competition, Privacy and Web 2.0
Posted on July 06, 2008Randy Picker (HT: Randy) has posted an interesting new paper to SSRN entitled “Competition and Privacy in Web 2.0 and the Cloud“. It is an insightful look at the how privacy rules imposed on Web intermediaries might raise competition concerns...
Commissioner Rosch on the (Smaller?) Role of Economists in Antitrust Litigation
Posted on July 04, 2008From FTC Commissioner Rosch: Personally, I think simulation analyses and indeed any kind of economic analyses that require the use of mathematical formulae are of little persuasive value in the courtroom setting. When I see an economic formula my eyes start to glaze over, and if the formula uses Greek letters I tend to think ?it’s [...
Some Links
Posted on July 03, 2008Tom Barnett on “Current Issues in Merger Enforcement” — offering a defense against claims that the DOJ has been especially inactive in merger enforcement (see, e.g., this paper from Jon Baker and Carl Shapiro) and its decision not to challenge the Whirlpool/ Maytag transaction (see Geoff’s earlier post) Avner Grief responds (”The claim that merchants’ relations [...
Harvard v. Chicago on Vertical Restraints
Posted on July 02, 2008In a new article in the June 2008 issue of Antitrust Source, Howard Marvel discusses what the rule of reason could and should look like in the Post-Leegin world as well as the different proposals to a rule of reason approach articulated by the states and the FTC in the recent Nine West consent order [...
Very nearly Commisioner Troy Paredes
Posted on June 30, 2008Only the formality of full Senate confirmation stands between Troy Paredes and the SEC following unanimous approval from the Senate Banking Committee. Congratulations, Troy.
Austin Bound
Posted on June 29, 2008My tour of duty as the FTC Scholar in Residence came to an end this past week. It was a fantastic opportunity for a junior scholar that I am grateful to have had. Plus, I couldn’t have picked a more interesting year to be at the Commission. Anyway, I’ll have more to say about all [...
Behavioral Economics and Antitrust at AAI
Posted on June 29, 2008Related to Thom’s post on behavioral economics and the problem of conflicting or offsetting biases, the American Antitrust Institute (AAI) held a conference on June 18th 2008 (audio available at the link above). The conference was, as I understand it, designed as a precursor to the AAI?s release of a ?Transition Report” to the [...
Lipton on Shareholder Primacy
Posted on June 27, 2008It should be no surprise that the inventor of the poison pill is pro-director, but Marty Lipton?s remarks at a June 25 conference at the University of Minnesota Law School left no doubt that he truly believes in his heart of hearts that we?re better off with strong, unencumbered boards...
Academic Buzzwords
Posted on June 26, 2008Apparently, the Local Government Association has told British bureaucrats in local and town governments to stop using 100 “non-words.” (CNN) From the story: The list includes the popular but vague term “empowerment;” “coterminosity,” a situation in which two organizations oversee the same geographical area; and “synergies,” combinations in which the whole is greater than [...
New Global Competition Policy: Class Cert & Merger Review in the UK
Posted on June 26, 2008The new issue is available here, and features the following articles in Class Certification and Antitrust Actions: Why Economics Now Matters for Antitrust Class Actions at the Class Certification Stage by Wendy Bloom (Kirkland & Ellis) The Potential Impact of Twombly on Antitrust Class Actions by Wendy Bloom (Kirkland & Ellis) and James Langenfeld (LECG) Opening the Curtain: [...
The Law Of Household Economics
Posted on June 25, 2008Yesterday the W$J ran an article with the above-referenced title (see here). The gist of the article is that whenever a household is blessed with an unexpected windfall, it will be cursed by an equal, unexpected cost. When I read the column, I thought to myself that it?s funny because it?s true...
Behavioralism and the Problem of Conflicting Quirks
Posted on June 25, 2008I’ve been spending quite a bit of time with the behavioralists lately. I recently read Dan Ariely’s interesting book, Predictably Irrational: The Hidden Forces that Shape Our Decisions. Then I heard Tom Ulen give a nice overview presentation at the recent Silicon Flatirons conference on the New Institutional Economics...
Cert Granted in Linkline
Posted on June 23, 2008The Supreme Court has granted cert in Pacific Bell Telephone Co., dba AT&T California v. linkLine Communications in order to address the question of whether a Section 2 “price squeeze” claim is viable under the Sherman Act if the defendant has no duty to deal...
The NWU 2 Year Program
Posted on June 21, 2008Bill Henderson has some thoughtful commentary on Northwestern University’s announcement of its 2 Year JD. He likes it. Here’s an excerpt: So let’s get this straight: NWU Law is going to attract applications from all the experienced, motivated students who want their elite JD degrees in two years versus three...
Chairman Kovacic Announces the “FTC at 100″ Self-Assessement Exercise
Posted on June 19, 2008Chairman Kovacic has posted a paper announcing a major self-assessment initiative at the FTC: The FTC at 100: Into our Second Century. Here is the opening paragraph: Albert Cummins was one of the chief sponsors of the Federal Trade Commission Act of 1914...
Call for Antitrust Papers
Posted on June 19, 2008From the Mississippi College School of Law: The Mississippi College Law Review is issuing a call for papers pertaining to antitrust law. The Law Review has published several themed issues in the past two years, and wishes to publish an article concerning antitrust, as the Law Review has not published any articles on this topic in several years...
“Its nonsensical to object”
Posted on June 18, 2008So says Jagdish Bhagwati about the recent objections by 100 or so University of Chicago faculty members to the establishment of the Milton Friedman Institute. (HT: Chicago Tribune). Here’s the whole quote as reported from the Chicago Tribune: “It is nonsensical to object...
Economics & Ideology Again
Posted on June 16, 2008Crooked Timber has a very interesting post up on the minimum wage debate (HT: Brian Leiter). I want to comment on the sub-theme of the post (and the theme picked up in the title of Leiter’s post), which was that economics ideologically driven by pro-market bias which results in the publication of pro-market findings over [...
Kobayashi & Wright on Antitrust Limits, Federalism and Patent Holdup
Posted on June 16, 2008I’ve posted to SSRN my new article (co-authored by my colleague Bruce Kobayashi), Federalism, Substantive Preemption, and Limits on Antitrust: An Application to Patent Holdup. We presented an earlier version of our analysis at the George Mason/ Microsoft Conference on the Law and Economics of Innovation and benefited significantly from comments from the [...
The Future of Law and Economics on SSRN
Posted on June 15, 2008I’ve compiled (with some light editing) the blog posts from the future of law and economics series into an article, including the response from Henry G. Manne, entitled “The Future of Law and Economics: A Discussion.” For those interested in reading the blog posts in their original form, along with the comments, I’ve indexed the [...
Global Competition Review FRAND Roundtable
Posted on June 15, 2008Global Competition Review recently sponsored a roundtable on FRAND commitments and their antitrust implications. The transcript is available here. It was moderated by Helen Jenkins (Oxera), and participants included Bernard Amory (Jones Day), George Cary (Cleary Gottlieb, advising Broadcom in its suit against Qualcomm), Damien Geradin (Howrey, advising Qualcomm), Matias Dewatripont (Universite Libre [...
RPM and the NIE
Posted on June 12, 2008I’ve just spent a couple of great days in spectacular Boulder, Colorado at a conference on the New Institutional Economics (NIE). (Not sure why the “the” is required, but it always seems to be used.) The conference, organized by Colorado Law’s Phil Weiser and hosted by the Silicon Flatirons Center for Law, Technology, [...
Pioneers in Law and Economics: Benjamin Klein
Posted on June 12, 2008I’ve mentioned previously that my colleague Lloyd Cohen and I are editing a volume for Edward Elgar Publishing on Pioneers in Law and Economics. Look for details in this space soon on a full list of contributing authors and subjects as well as where to buy the book! One of the perks of co-editing a [...
GCP on Single Product Rebates and Bundled Discounts
Posted on June 12, 2008Global Competition Policy has a new issue out focusing on the antitrust analysis of single product rebates and bundled discounts in the United States and Europe, including articles from: H.E. Frech (UCSB) Benjamin Klein (UCLA and LECG) Jonathan Rubin (Patton Boggs) M...
Three From Professor Elhauge on Antitrust
Posted on June 11, 20082008 has been a busy year for Harvard Professor Einer Elhauge so far from the looks of his SSRN page (not to mention advising Senator Obama on legal policies). He’s posted three new working papers covering a diverse set of antitrust topics: Loyalty Discounts and Naked Exclusion (purporting to “prove that loyalty discounts create anticompetitive [...
Are Loyalty Discounts Really Anticompetitive?
Posted on June 11, 2008I promised that I would write about why I think that Professor Elhauge’s claim in his new working paper, “Loyalty Discounts and Naked Exclusion,” that he has proven that loyalty discounts generally involve anticompetitive effects is mistaken...
Poker Cheating Scandal at Ultimate Bet
Posted on June 09, 2008Its a few weeks old now, but apparently a couple of former employees were able to bilk online rivals of a lot of money at Ultimate Bet. How? Certain players gained an unfair advantage through their ability to see their opponents’ hole cards. In a game of incomplete information, the ability to see an opponent’s hole [...
EU/US Convergence in Competition Policy
Posted on June 08, 2008FTC Chairman William Kovacic, easily one of the most insightful thinkers and writers on issues of global competition policy, has posted a new paper offering a thoughtful analysis of where the EU and US competition policy systems have been, where they are going, what institutional differences might cause the systems to converge or diverge further, [...
Advice for Economics Graduate Students
Posted on June 06, 2008From Peter Boettke at the Austrian Economists blog. Boettke gives detailed advice on how to prepare for your first year of a graduate program in economics, but the general message of the advice is more broadly applicable. I agree with virtually everything he says about the economics (start writing early and read lots of Alchian [...
Growthology
Posted on June 06, 2008Growthology is a new economics blog by Tim Kane and Bob Litan that, as the name suggests, focuses on all things to do with economic growth and particularly, entrepreneurship. Yesterdays posts include an interview with SSRN founder Mike Jensen. (HT: Peter Klein).
Conference: The Economics and Law of the Entrepreneur
Posted on June 05, 2008The Searle Center on Law, Regulation and Economic Growth at Northwestern University School of Law is continuing its excellent run of conferences with an event on June 18th-19th organized by Daniel Spulber centering around some new (and very interesting looking) papers on economic and legal issues involving entrepreneur and discuss high quality research relevant to [...
Mankiw Makes the Case for McCain’s Corporate Tax Cut
Posted on June 01, 2008The article is in the NY Times (HT: Mankiw). An excerpt: A cut in the corporate tax as Mr. McCain proposes would initially give a boost to after-tax profits and stock prices, but the results would not end there. A stronger stock market would lead to more capital investment...
Interesting Panel on FTC Merger Litigation — June 5
Posted on May 23, 2008Antitrusters in D.C. ought to head to the National Press Club at noon on Thursday, June 5. At that time, the Federalist Society’s Corporations, Securities, and Antitrust Practice Group will host a panel discussion entitled Assessing Recent FTC Merger Litigation: One Win, One Loss, One Tie...
A Few Antitrust Links
Posted on May 21, 2008Antitrust Review reports on Obama on Antitrust (”?We?re going to have an antitrust division in the Justice Department that actually believes in antitrust law. We haven?t had that for the last seven, eight years”) Danny Sokol wants you to sign the letters at the link to support direct appropriations for technical assistance Commissioner Rosch on the State [...
The Future of Law and Economics Part 6: Wrap Up & A Brief Reply to Manne on Empirical L&E
Posted on May 21, 2008In Part V of the series on the future of law and economics (Parts I, II, III, and IV), Henry Manne graciously offered a reply to my thoughts on where L&E might be headed and why. I encourage the readers interested in the series to take time to re-read Henry’s response in its [...
Peter Klein on Benkler’s Wealth of Networks
Posted on May 21, 2008Peter’s concise and insightful book review is available here and is forthcoming in the Fall 2008 issue of The Independent Review.
FINRA Rules
Posted on May 15, 2008As you may be aware, in July 2007, the NASD and the member regulation, enforcement and arbitration functions of the New York Stock Exchange were consolidated into the Financial Industry Regulatory Authority (FINRA). Technically, NYSE Regulation functions and employees were transferred to the NASD, and the NASD changed its name to FINRA...
A softball is not so soft when it hits you in the face
Posted on May 15, 2008So I was playing centerfield in softball the other night, lost the ball in the sun, and ended up with seventeen stitches (4 internal, 13 external) over my right eyebrow. Unpleasant picture after the jump.
And the Clear Channel litigation will not continue….
Posted on May 14, 2008The news just broke that the Clear Channel acquisition litigation ? both in Texas and New York - is on the road to being settled, with the parties having penned a new set of agreements tonight, providing for the acquisition of Clear Channel by Thomas H...
Clear Channel Litigation Is Going To Trial! Or not….
Posted on May 13, 2008I have just been told by someone who attended the 10:45 a.m. hearing this morning in Justice Helen Freedman’s courtroom in New York state court that the Clear Channel litigation brought by private equity buyers against their lenders ? the litigation that the media kept saying over the past two days was *about* to settle ? [...
The Future of Law and Economics Part 5: A Reply From Henry Manne
Posted on May 13, 2008I’ve had a wonderful time writing this series on the future of law and economics. When I started the series (Part I, Part II, Part III, and Part IV), I thought it would be a fun thought experiment for me to think through aloud and hopefully start a valuable conversation...
FTC to Dr. Miles: “I Wish I Knew How to Quit You!”
Posted on May 08, 2008In April 2000, the FTC issued a Complaint against women’s shoe distributor Nine West, claiming that Nine West had engaged in minimum resale price maintenance (RPM) (i.e., the setting of minimum prices that retailers could charge for its shoes). Apparently, Nine West was providing retailers with lists of “off limits” or “non-promote” shoes that [...
Hell No, Don’t Let Them Go!
Posted on May 08, 2008My colleague and fellow UCLA alumnus Thomas Hazlett and I have published an op-ed in the Chicago Tribune proposing a partial solution, partially inspired by the early exit of Kevin Love from our beloved Bruin basketball squad, to the problem of early exit by potential NBA draftees...
Cato Book Forum: Steven Teles on May 14th at Noon
Posted on May 08, 2008A new Cato Book Forum Wednesday May 14th at Noon: Featuring the author, Steven Teles, University of Maryland and Yale University Law School, with comments from Roger Pilon, Cato Institute and Hon. David McIntosh, Mayer, Brown, Rowe & Maw, former Member of Congress (R-IN), Federalist Society Co-Founder...
The Future of Law and Economics Part 4: Potential Solutions
Posted on May 06, 2008In a series of posts (Part I, Part II and Part III), I’ve sketched out how the trend toward increasing detachment in L&E scholarship might reduce the influence of the L&E movement at the retail level and become its ultimate undoing. I must say, writing this series has been a lot of fun but has [...
The Future of Law and Economics: Does Behavioralism Offer Hope for the Non-Technical?
Posted on May 06, 2008Josh?s series-in-progress on the future of law and economics (Part I, Part II, Part III?and more to come) is simply fantastic. It?s also a bit depressing for those of us who are economically inclined but lack the skill set required to do sophisticated modeling and/or rigorous empirical work...
The Future of Law and Economics Part 3: L&E Scholarship
Posted on May 05, 2008In previous posts (Part I and Part II) I discussed the increasing trend towards formal mathematics in L&E scholarship and some of the potential issues this raises for the L&E movement as it becomes more detached from the legal academy. This post focuses on another question: What will L&E scholarship in law [...
Microsoft Withdraws Its Bid For Yahoo!
Posted on May 03, 2008This just in: Microsoft withdrew its most recent bid for Yahoo and announced it will not be making a hostile move for Yahoo. This comes on the heels of the announcement a mere day ago that Yahoo and Microsoft were sitting down to try to hammer out a friendly deal...
Score One for Obama
Posted on May 02, 2008I?ve been waiting for my old con law prof to take a political stand I could really get behind, and he finally has. Barack Obama is the only one of the presidential candidates to take a firm stand against this shamefully populist gas tax holiday. Good for you, Prof! Now, I?m not normally a [...
Delaware is winning the LLC race.
Posted on May 01, 2008Dammann and Schundeln have a new paper up on SSRN entitled “Where are Limited Liability Companies Formed? An Empirical Analysis” (see here) that examines the state of formation choice of 64,000+ LLCs. Here’s the abstract: We empirically study the incorporation choices or, more accurately: formation choice, of limited liability companies...
Dammit - DC Madam Hangs Herself
Posted on May 01, 2008The DC Madam killed herself today, about a week after being found guilty by a jury on prostitution-related charges of money-laundering (among other things). Among her alleged clients are Louisiana Senator David Vitter, former U.S. Deputy Secretary of State Randall Tobias, and Harlan K...
The Future of Law and Economics Part 2: Mathematics, Retailing L&E, and Detachment
Posted on April 30, 2008In my previous post, I sketched out some trends in the Law & Economics movement in recent years. Specifically, I’ve focused on the trends towards increasing mathematical formality and specialization within economics as a stand alone discipline...
The Future of Law and Economics, Part 1
Posted on April 28, 2008I’m very interested in the history, the present, and the future of the law and economics methodology and movement. Recently, I’ve been giving some thought to the direction of the movement, especially as it currently exists in the legal academy...
How Should Competition Policy Be Taught?
Posted on April 28, 2008Harvard’s Einer Elhauge answers the titular question in the newest issue of Competition Policy International, in response to a review of his new textbook Global Antitrust Law and Economics (with Damien Geradin) at the newly revamped Global Competition Policy website...
Nudge at Cato
Posted on April 23, 2008Speaking of Nudge, Cato is holding a book forum on Cass Sunstein and Richard Thaler’s new book on May 1 which will feature Sunstein, and comments from Will Wilkinson and my colleague Terrence Chorvat. Registration is free and you can also watch the event live at the link above.
Happy 94th Birthday Armen Alchian!
Posted on April 23, 2008I wrote this brief post awhile back, and forgot to post it on April 12th, Armen’s 94th birthday. I’m late. But better late then never they say. On Armen Alchian’s 94th birthday, it seems appropriate to reflect on some of his contributions to economics and economic analysis of the law...
Some Economics Links
Posted on April 23, 2008James Pethokoukis at US News reports on interviews with chief economic advisers Austan Goolsbee and Douglas Holtz-Eakin. Brian Leiter is pleased to point out a study showing that while both groups are in the top 3, Philosophy majors outperform Economics majors on the LSAT...
Big Antitrust News: Rambus Overturned
Posted on April 22, 2008The D.C. Circuit’s opinion is available here. Here is one of the key passages explaining the D.C. Circuit’s logic: To the extent that the ruling (which simply reversed a grant of dismissal) rested on the argument that deceit lured the SSO away from non-proprietary technology, see id...
Nudge
Posted on April 18, 2008Sunstein and Thaler have a series of posts over at Volokh Consipiracy on their new book Nudge, which expands on their notion of libertarian paternalism (see here, here , here and here). Something in the most recent post caught my eye. In preparing to respond to various objections to libertarian paternalism, Sunstein argues that this [...
The “New” Issue of JLE is Online
Posted on April 17, 2008The new issue of the Journal of Law & Economics is available online. This is an exciting development for me because the issue includes my paper with Ben Klein on The Economics of Slotting Contracts (SSRN version available here), and because it has been a very long wait to see the paper in final [...
The Economics of Post-Merger Product Repositioning
Posted on April 15, 2008Amit Gandhi, Luke Froeb, Steven Tschantz and Gregory Werden have published “Post-Merger Product Repositioning” in the Journal of Industrial Economics. (HT: Luke). The critical insight is that the conventional unilateral effect incentive to raise prices post-merger is offset by the incentive to “separate” in product space...
“Leegin is a triumph of pragmatism”
Posted on April 13, 2008That is what Judge Posner has to say about Leegin in his new book, How Judges Think. I’m only a few chapters in, but so far, its a fascinating read. I’ll probably blog some more about parts of the book later. In particular, I’ve been thinking recently about how the complexity of substantive antitrust analysis [...
GE “Slashes” Earnings: Free Advice from Nowicki for GE Exec. Jeffrey Immelt!
Posted on April 12, 2008The Financial Times reported yesterday that an embarrassed GE CEO Jeffrey Immelt had to tell GE shareholders that the 10% growth in earnings for 2008 that he had promised analysts in March was not going to be possible. GE missed its quarterly forecasts and halved its 2008 forecast to 5% growth in earnings (as opposed [...
Searle Center Call for Antitrust Papers
Posted on April 09, 2008Northwestern University School of Law’s Searle Center on Law, Regulation and Economic Growth will be holding a conference on Antitrust Economics and Competition Policy on September 26-27th. From the Call for Papers: The goal of this Research Symposium is to provide a forum where leading scholars from across the country can gather together with Northwestern?s own [...
Merger Agreements, ?Material Adverse Changes,? and Delaware Vice Chancellor Leo Strine?s Obsession With Keira Knightley
Posted on April 03, 2008I am blogging today from the Tulane Corporate Law Institute, here in New Orleans, at the stunning Westin Hotel. I am set to appear on the Private Equity panel tomorrow, where I will talk about, among other things, the implications of 2007?s string of failed private equity deals...
Some Thoughts on the Nacchio Decision and Insider Trading
Posted on March 31, 2008On the flight back from my spring break ski trip, I had a chance to read the recent Tenth Circuit opinion reversing the insider trading conviction of former Qwest CEO, Joseph Nacchio. Mr. Nacchio had been convicted of 19 counts of insider trading, sentenced to six years in prison (plus two years’ supervised release), [...
The Dual Antitrust Enforcement Question
Posted on March 31, 2008With all of the recent talk of the “optimal regulatory structure” and proposals about regulatory consolidation and reorganization (here is Glom Blogger David Zaring on the Big Reorg), I wonder if the discussion might carry over into antitrust and the recurring “dual enforcement” question...
Some GMU (and GMU Related) Hiring News
Posted on March 31, 2008First, David Bernstein reports on GMU’s very productive hiring season which includes the additions of Helen Alvare, Laura Bradford, T.J. Chiang, Jonathan Mitchell, Adam Mossoff, Chris Newman, David Schleicher, and Jay Verret. Second, Brian Leiter reports that Jonathan Klick (Florida State), a graduate of GMU Law (and of the economics department with a Phd in 2003) [...
Regulate in Haste, Repent in Leisure: Reforming the Financial Regulatory Scheme
Posted on March 31, 2008Today, Treasury Secretary Henry Paulson is set to present some comments about the Treasury’s Blueprint for Financial Regulatory Reform, released on Saturday. (A summary of the proposal is here.) The summary of the proposal report provides: ?In this report, Treasury presents a series of “short-term” and “intermediate-term” recommendations that could immediately improve and reform the U...
Death of a chinchilla
Posted on March 27, 2008For at least two years, my boys (Liam, 9 and Ollie, 6) have been clamoring for a pet chinchilla. While perusing craigslist a few days before Ollie’s birthday, I ran across a listing for a 18-month-old chinchilla that came with a cage and all accessories (including a dust bather!) for a mere $75...
Comment on “Barnett on Sirius-XM”
Posted on March 25, 2008I can’t seem to get my comment on Geoff’s XM-Sirius post below to go through, so I’ll just post it: I would still disagree with the DOJ when they say “there is not likely to be significant competition…through the car manufacturer channel for many years...
Do Casinos Cause Crime?
Posted on March 25, 2008Grinols and Mustard (2006) answer “Yes” in their ReStat article. Douglas Walker rebuts and Grinols and Mustard reply in the latest issue of Econ Journal Watch — which you should be reading. The debate largely involves issues of measurement error and endogeneity, e...
One More Thought on Ex Ante Competition and Merger Analysis
Posted on March 25, 2008One last issue with respect to ex ante competition and merger analysis. What if it could be demonstrated convincingly that XM and Sirius payments to automobile manufacturers. The DOJ hints at this possibility in the press release: XM and Sirius engaged in head-to-head competition for the right to distribute their products and services through each car [...
Competition for the Field, Sirius/XM and Shelf Space
Posted on March 25, 2008Geoff and Paul like the result in XM/ Sirius but are puzzled by the DOJ press release, in particular as it pertains to analyzing ex ante competition, or “competition for the field,” in the form of payments to automobile manufacturers to adopt their services...
Barnett on Sirius-XM
Posted on March 24, 2008The Washington Post is reporting that the long-embattled Sirius/XM merger has received DOJ approval (FCC approval still pending) (HT: David Fischer). About time, I’d say (it’s been two years). See all of the ToTM posts on the topic here...
Tulane Corporate Law Institute
Posted on March 21, 2008Tulane’s annual “Corporate Law Institute” is coming up! The conference - widely viewed as the must-attend deal conference of the year is April 3 and 4 (only two weeks away). The roster for this year’s conference reads like a who’s who of the deal world, with a range of Delaware jurists, investment bankers, top lawyers, and [...
Public Choice and the Law Textbook
Posted on March 20, 2008Todd Zywicki and Maxwell Stearns have a draft of their new textbook, “Public Choice Concepts and Applications in the Law,” available for review for profs that are interested in teaching with the manuscript this Fall 2008 or Spring 2009 term (the book is due to be published in 2009)...
Some Antitrust Links
Posted on March 20, 2008The new Global Competition Policy online magazine contains some insightful commentary on the Google/ Doubleclick clearance, critical loss analysis in Whole Foods (from Kevin Murphy and Robert Topel) and more generally (from Greg Werden), as well as competing reactions to the Intel antitrust allegations … The Supreme Court did not grant cert in Microsoft v...
Are the Roberts Court Antirtust Decisions Really Pro-Business?
Posted on March 20, 2008I’m a bit late to the party on Jeffrey Rosen’s provocative article in the NY Times Magazine claiming that the Supreme Court is biased in favor of businesses. For readers not familiar with Rosen’s claim, the basic assertion is that: With their pro-business jurisprudence, the justices may be capturing an emerging spirit of agreement [...
All We Are Saying Is Give PeaceHealth a Chance.
Posted on March 13, 2008Josh had a characteristically thoughtful post last week on safe harbors for loyalty and bundled discounts. I didn’t comment on the post, with which I generally agree, because I was busy writing an amicus brief (also signed by Dan Crane, Richard Epstein, Tom Morgan, and Danny Sokol) in an attempt to preserve a different [...
New York State Governor Eliot Spitzer Will Resign
Posted on March 12, 2008The news has just broken that New York State Governor Eliot Spitzer intends to resign on Monday. This means that Lieutenant Governor, David Paterson, a relative unknown, will become the governor of New York State. More importantly, this means Joe Bruno, New York State Senate Majority Leader, will be tapped to “perform all the duties of [...
EU Clears Google-Doubleclick
Posted on March 11, 2008From the WSJ Online: The transaction had faced stiff opposition in Brussels from Google rivals including Microsoft Corp. and Yahoo Inc., as well as privacy advocates who fretted that a combined company would control a vast storehouse of data on Web users and their surfing habits...
The Economics of $4300
Posted on March 10, 2008Tyler Cowen invokes Klein and Leffler (1981) to explain the the apparently high price of paid by Client #9 for sex, arguing that high price in combination with the repeat purchase mechanism were part of a self-enforcement mechanism designed to assure performance (in this case, presumably, sex and secrecy)...
Eliot Spitzer - Tied to Prostitution? The Boys Versus The Girls
Posted on March 10, 2008According to the Associated Press, New York State Governor Eliot Spitzer is reported to be or have been a client of a “high-end prostitution ring called Emperors Club VIP.” This morning, Governor Spitzer publicly apologized to his family and the public, “but did not not elaborate on a bombshell report that he has been involved in [...
Steven Cheung’s Blog
Posted on March 10, 2008Of potential interest to TOTM readers (especially those who can read Chinese), Stephen Cheung has a blog. (HT: Peter Klein)
#31
Posted on March 04, 2008That is where TOTM lands on Race to the Bottom’s list of the Top 50 Most Influential Law Faculty Blogs for 2007 based upon traffic, links, and citations. UPDATE: Or #68 amongst economics blogs…
Thoughts on Safe Harbors for Quantity Discounts (and Bundling)
Posted on March 04, 2008Dennis Carlton and Michael Waldman have posted an insightful DOJ working paper on antitrust safe harbors for unilateral conduct involving quantity discounts and bundling. The discussion is very timely in light of the Microsoft CFI decision, AMC Report, Section 2 Hearings, and various monopolization cases in the United States, EU, and other antitrust jurisdictions...
Barnett on the the Supreme Court, Convergence, and Enforcement Levels
Posted on March 04, 2008Tom Barnett (DOJ Antitrust AG) gave a speech February 29th to the Federalist Society where he touched upon a number of interesting issues we’ve discussed from time to time here at TOTM. Some highlights: Barnett on recent Supreme Court activity...
Is Austan Goolsbee Overrated?
Posted on March 03, 2008Not as an economist of course! There is no doubt that Goolsbee is one of the world’s premier economists. But another brilliant economist, Jagdish Bhagwati, argues that voters should (HT: Mankiw) favor Barack Obama’s free trade credentials over Hillary Clinton’s based, at least partially, on Austan Goolsbee’s credentials as an advocate of free [...
WPT Enterprises Trial Date Extended to August 5
Posted on March 03, 2008Just as the April 1 trial date was approaching in the lawsuit by seven elite-level poker players against WPT Enterprises, it has been extended four months to August 5. The case involves antitrust claims of exclusive dealing and price-fixing as well as the non-antitrust issue of contractual interference with respect to the releases players must sign before competing [...
Evaluating “Long Term Advisors” and “Short Term Interventions”
Posted on February 27, 2008My colleague Danny Sokol has posted An Empirical Evaluation of Long Term Advisors and Short Term Interventions in Technical Assistance and Capacity Building to SSRN. The abstract for the paper, which is co-authored by Kyle Stiegert, follows: Technical assistance to improve the capacity of regulatory agencies around the world remains a key priority for international [...
The Deadwood Report is Coming …
Posted on February 26, 2008Thats the opening line of my colleague and Green Bag Editor Ross Davies’ announcement (posted here) that The Green Bag is ready to enter the law school rankings game. The Deadwood Report (see also Inside Higher Ed) has law school puffery and false advertising in its sights...
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