Competition policy

Murillo Campello, Daniel Ferrés, Gaizka Ormazabal, 07 September 2017

Strategies for cartel detection and prosecution differ across countries. This column uses a US dataset to show that independent directors of cartel-indicted firms favour the implementation of corrective actions in order to mitigate damage to their personal reputations. Firms with a larger fraction of independent directors on their boards observe smaller value losses and lower cartel duration during cartel-busting episodes.

Rafael Dix-Carneiro, Brian Kovak, 23 August 2017

The effects of foreign competition have been shown to vary substantially across regions within a country. Using administrative and household survey data from Brazil, this column examines the various margins of adjustment in response to trade-induced regional shocks. The results demonstrate a key role for the non-tradable sector and informal employment in the adjustment process.

Howard Smith, Øyvind Thomassen, 24 July 2017

Many consumers buy multiple types of goods from a single location (or firm) to save on shopping costs, turning these goods into pricing complements. Using data from the UK, this column shows that the internalisation of these complementary effects by supermarkets greatly improves the competitiveness of grocery supply. It also argues that one-stop shoppers have a greater pro-competitive impact on supermarket pricing than multi-stop shoppers.

Laurent Gobillon, Carine Milcent, 21 July 2017

It is widely believed that the goal of keeping health expenditures under control while increasing the quality of the healthcare system can best be achieved by giving a greater role to market forces. This column evaluates the effect of a pro-competition reform implemented in France over 2004-2008 on hospital quality. It finds that the impact on quality depends on the managerial autonomy of hospitals. And due to the French healthcare market structure, the overall effect of the reform has been limited.

Christos Genakos, Tommaso Valletti, Frank Verboven, 16 June 2017

Europe is experiencing a wave of mergers in the telecommunications industry. This column argues that an increase in market concentration in the mobile industry generates an important potential trade-off: while consolidation increases prices, investment per operator also goes up. Competition and regulatory authorities should be open to the potential trade-off between market power effects and efficiency gains from agreements between firms.

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