Handbook of Antitrust Economics PDF
Preview Handbook of Antitrust Economics
Handbook of Antitrust Economics Handbook of Antitrust Economics edited by PaoloBuccirossi TheMITPress Cambridge,Massachusetts London,England 62008MassachusettsInstituteofTechnology Allrightsreserved.Nopartofthisbookmaybereproducedinanyformbyanyelectronicormechanicalmeans (includingphotocopying,recording,orinformationstorageandretrieval)withoutpermissioninwritingfromthe publisher. Forinformationaboutspecialquantitydiscounts,[email protected] ThisbookwassetinTimesNewRomanandSyntaxon3B2byAscoTypesetters,HongKong. PrintedandboundintheUnitedStatesofAmerica. LibraryofCongressCataloging-in-PublicationData Handbookofantitrusteconomics/editedbyPaoloBuccirossi. p. cm. Includesbibliographicalreferencesandindex. ISBN978-0-262-02627-7(hardcover:alk.paper)—ISBN978-0-262-52477-3(pbk.:alk.paper) 1.Consolidation andmergerofcorporations. 2.Industrialorganization(Economictheory) 3.Antitrustlaw—Economicaspects. I.Buccirossi,Paolo. HD2746.5.H3584 2007 338.8—dc22 2007002665 10 9 8 7 6 5 4 3 2 1 Contents Contributors vii Introduction ix 1 EconomicEvidenceinAntitrust:DefiningMarketsandMeasuringMarketPower 1 JonathanB.BakerandTimothyF.Bresnahan 2 UnilateralCompetitiveEffectsofHorizontalMergers 43 GregoryJ.WerdenandLukeM.Froeb 3 TheCoordinatedEffectsofMergers 105 Kai-UweKu¨hn 4 CompetitiveEffectsofVerticalIntegration 145 MichaelH.Riordan 5 AnalysisofConglomerateEffectsinEUMergerControl 183 DamienJ.Neven 6 DetectingCartels 213 JosephE.HarringtonJr. 7 LeniencyandWhistleblowersinAntitrust 259 GiancarloSpagnolo 8 FacilitatingPractices 305 PaoloBuccirossi 9 EconomicsofVerticalRestraints 353 PatrickReyandThibaudVerge´ vi Contents 10 ExclusiveContractsandVerticalRestraints:EmpiricalEvidenceandPublicPolicy 391 FrancineLafontaineandMargaretSlade 11 AbuseofMarketPower 415 JohnVickers 12 PriceDiscrimination 433 MarkArmstrong 13 PublicPolicyinNetworkIndustries 469 NicholasEconomides 14 CompetitionPolicyforIntellectualProperty 519 RichardJ.Gilbert 15 CompetitionPolicyinTwo-SidedMarkets,withaSpecialEmphasisonPayment Cards 543 Jean-CharlesRochetandJeanTirole 16 CompetitionPolicyinAuctionsand‘‘BiddingMarkets’’ 583 PaulKlemperer 17 EuropeanStateAidControl:AnEconomicFramework 625 HansW.Friederiszick,Lars-HendrikRo¨ller,andVincentVerouden Index 671 Contributors MarkArmstrong,University College London GiancarloSpagnolo,University of Rome atTor Vergataand Stockholm School of JonathanB.Baker,American University Economics TimothyF.Bresnahan,Stanford University JeanTirole,Toulouse University (IDEI- PaoloBuccirossi, Lear (Laboratorio di GREMAQ) and MIT economia, antitrust,regolamentazione) ThibaudVerge´,CREST-LEI NicholasEconomides,New York University VincentVerouden, Chief Economist Team HansW.Friederiszick, European Schoolof of the European Commission, Directorate- Management and Technology, Berlin General for Competition LukeM.Froeb,Vanderbilt University JohnVickers,Oxford University RichardJ.Gilbert,University of California GregoryJ.Werden,US Department of at Berkeley Justice JosephE.HarringtonJr., Johns Hopkins University PaulKlemperer, Oxford University and UK Competition Commission Kai-UweKu¨hn, University of Michigan FrancineLafontaine,University ofMichigan DamienJ.Neven, Graduate Institute of International Studies,Geneva, and DG Competition of the European Commision PatrickRey,Toulouse University (IDEI- GREMAQ) MichaelH.Riordan,Columbia University Jean-CharlesRochet, Toulouse University (IDEI-GREMAQ) Lars-HendrikRo¨ller,European Schoolof Management and Technology, Berlin and Humboldt University MargaretSlade,University of Warwick Introduction PaoloBuccirossi Economics lies at the heart of competition, or antitrust, law. While in the early days the application of antitrust rules was almost entirely left to the wit of people with only a legal background,itisnowwidelyacceptedthattheproperinterpretationoftheserulesrequires an understanding of how markets work and of how firms can alter their e‰cient function- ing. This knowledge is the realm of economic science. Asthe awareness of the central role of economics in antitrust has progressed, so has the research. An industrial economist would probably say that the growth in the demand for economic knowledge coming from administrative bodies, courts, companies, and lawyers (in short, the antitrust community) has ledto a reorganization of the industry, with asharp increase in the supply of newthe- oretical models and more reliable empirical methods. This reorganization has taken place mostly over the last twenty years or so, and has significantly changed the landscape. Now seemstheappropriatetimetoprovidetheantitrustcommunity,whichrecognizestheecon- omist as one of its members, with an updated map of the territory. This Handbook serves thispurpose. DifferentJurisdictions,SameEconomics:AimsandScopeoftheHandbook Not all jurisdictions have experienced an increase in the use of economics with the same intensity, rapidity, and scope, and some may still lag behind. The essays contained in this Handbook relate the economic theory to the application of competition, or antitrust, law mostly in two jurisdictions: the United States and the European Union. Between these two jurisdictions, there are nevertheless important di¤erences in the way competition, or antitrust, rules are interpreted and applied. Even the name that identifies the relevant leg- islationdi¤ers:intheUnitedStatesitisgenerallyreferredtoas‘‘antitrustlaw,’’whereasin the European Union it is normally referred to as ‘‘competition law.’’ In this Handbook both terms are used interchangeably, and the choice of the title does not express a bias in favor of the United States.1 It rather advocates the opinion that for the subject matter of thisvolumethemanyandnotabledi¤erencesbetweenthesetwojurisdictions(andbetween themand all those that are not cited) are not pertinent.This idea needs to be explained.
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