Erik Feyen, Jon Frost, Leonardo Gambacorta, Harish Natarajan, Matthew Saal, 23 October 2021

Big Techs’ expansion into financial services can bring competition, efficiency, and inclusion, particularly in emerging market and developing economics. But it also gives rise to issues concerning a level playing field with banks, operational risk, too-big-to-fail issues, as well as challenges for antitrust rules and consumer protection. This column presents a policy triangle that highlights the trade-offs between three objectives: financial stability, competition, and data privacy. Handling these challenges requires more coordination on rules and standards, both between domestic authorities and across international borders. 

Marco Bottone, Cristina Conflitti, Marianna Riggi, Alex Tagliabracci, 30 June 2021

How has the Covid-19 shock affected firms’ pricing choices and inflation expectations? Using a rich survey of Italian firms, this column documents that planned price changes and inflation expectations appear to have been driven by the expected duration of the downturn and by the strength of competitive pressures. It finds no effects of liquidity and financial conditions, which were major drivers of corporate pricing policies during the Great Recession and the sovereign debt crisis, on pricing strategies during the pandemic.

Ben Vollaard, Jan van Ours, 24 June 2021

Many expert product reviews are non-blind and influenced by cosy relationships between reviewers and producers that consumers are not aware of. The downside of biased reviews is largely unknown because of a lack of data and small sample sizes. Based on unique data for a long-running expert product review in the food-service industry, this column finds that a conflict of interests for reviewers led to a sizeable bias in ratings. This casts doubt on the value of non-blind expert product reviews that are not bound by very strict rules.

Pierre Régibeau, 13 March 2021

On 15 December 2020, the European Commission approved the acquisition of Fitbit by Alphabet, subject to a number of commitments. The case caused considerable concern that Google will gain unfair advantages in the online advertising market and ensure its dominance in digital health, with dire consequences for privacy. Critics also feared the acquisition would reduce Google’s incentives to keep its Android ecosystem open to rival wearable products. This column argues that the decision is appropriate, addressing the four main concerns. The suggested theories of harm have remedies or they are not supported by evidence to the requisite legal standard. 

Georges Siotis, Carmine Ornaghi, Micael Castanheira, 28 February 2021

A perplexing feature surrounding generic entry is that the price of the other on-patent potential substitutes is barelyaffected, leading competition authorities to conclude sometimes that a single molecule may constitute a distinct antitrust market.  Using data on prices, quantities, and promotional effort for a large number of molecules sold in the US, this column finds that there is no such thing as a single/natural antitrust market, even for a fixed set of products (and absent technological, regulatory, or trade shocks).  

Joan Costa-Font, Rosella Levaggi, Gilberto Turati, 20 September 2020

While competition between publicly funded hospitals seems to improve efficiency and the quality of care in ‘normal’ times, during a pandemic certain types of disintegrated hospital competition models can compromise the necessary stewardship of the system, and give rise to a larger number of fatalities. This column presents a regional comparison of the healthcare systems in three Italian regions that were severely hit at the beginning of the Covid-19 pandemic. The analysis suggests that an integrated model can provide a swifter reaction to an outbreak by minimising coordination efforts as well as  information costs.

Stefano Federico, Fadi Hassan, Veronica Rappoport, 25 June 2020

In a period where the backlash against trade and globalisation is at historical high point, it is crucial to understand the frictions that prevent a full realisation of the gains from trade. This column takes evidence from Italy and contributes to the debate by identifying a novel channel: the endogenous funding constraint of banks whose loan portfolios are affected negatively by the liberalisation. There are spillovers between ‘losers’ and ‘winners’ from trade that operate through banks, which hinder the reallocation of resources towards firms that should actually expand after the liberalisation.

Elena Argentesi, Paolo Buccirossi, Emilio Calvano, Tomaso Duso, Alessia Marrazzo, Salvatore Nava, 04 March 2020

Dominant companies in the digital market may use merger and acquisitions – especially ‘killer’ or ‘zombie’ acquisitions – and the (under)enforcement of merger control to stifle competition and cement their market dominance. This column analyses acquisition activity by Amazon, Facebook, and Google between 2008 and 2018, and finds that they often targeted very young firms. Because the evolution of young firms is still uncertain, it is difficult for competition authorities to assess the effects of these mergers, especially when the focus is on single acquisitions without considering the overall acquisition strategy.

Maurizio Bussolo, Francesca de Nicola, Ugo Panizza, Richard Varghese, 28 February 2020

Firms can use political connections to gain an unfair advantage in resource allocation, such as easier access to credit. This column examines around 460,000 firms from six central and eastern European economies and shows that political connections ease credit constraints, distort capital allocation, and may have large welfare costs. Connected firms do not always borrow to invest and, when they do invest, they are likely to misallocate capital.

Joyce He, Sonia Kang, Nicola Lacetera, 08 February 2020

Many work environments require their employees to apply for promotions, a process that results in fewer women opting to compete. This column presents evidence to suggest that changing promotion schemes to a default where everyone is considered but has the option to ‘opt out’ could help close the gender gap in applications to compete for promotions. 

William Kerr, 31 January 2020

Why are cities so keen to create their own technology clusters, and why is it so difficult? Bill Kerr of Harvard Business School tells Tim Phillips what economists know (and don't know) about where tech clusters come from

Thorsten Kaeseberg, 12 December 2019

The agendas and roadmaps for the future of digital policy in Europe have been debated extensively. This column proposes a menu of different policy instruments for the new European Commission in order to achieve this transformation. These include reforming the framework of the e-commerce Directive, regulating super-dominant digital platforms, facilitating data intermediaries as counter-balancing actors, facilitating the rise of European platforms, and pushing blockchain. 

Kathryn Graddy, 21 September 2019

The auction market provides important information regarding prices to a host of players, including buyers, sellers, investors, students of art history, and even economists. Already dominating the high-end public auction system in art, Christie’s and Sotheby’s have recently been making a significant push into private sales. This column examines the potential implications of this move for the art market and whether it may decrease competition.

Maria Chiara Cavalleri, Alice Eliet, Peter McAdam, Filippos Petroulakis, Ana Soares, Isabel Vansteenkiste, 24 August 2019

Recent evidence suggests that competitive intensity has been declining in the US. This column aims to contribute to our understanding of these trends in the euro area. It finds that, in contrast to the situation in the US, market power metrics have been relatively stable over recent years and mark-ups have marginally been trending down since the late 1990s. It suggests that more research on the sectoral level and with better data is necessary to analyse the complex welfare and policy implications of these developments.

Rabah Arezki, 19 August 2019

Algeria’s recent victory in the Africa Cup of Nations has united a country whose development model has frustrated its young and educated workforce. This column offers four lessons for economic development from the national football team’s success: on the role of competition and market forces, mobilising talent, the role of managers, and the importance of referees (i.e. regulation). 

John Van Reenen, 19 July 2019

John Van Reenen discusses how 'superstar firms' such as Google and Apple have changed the global economy.

Ufuk Akcigit, Sina T. Ates, 04 July 2019

The US economy has witnessed a number of striking trends that indicate rising market concentration and a slowdown in business dynamism in recent decades. This column uses a micro-founded model of endogenous firm dynamics to show that a decline in the intensity of knowledge diffusion from frontier firms to laggard ones plays a key role in the observed shifts. It presents new evidence on higher concentration of patenting in the hands of firms with the largest stock that corroborates declining knowledge diffusion in the economy. 

Sébastien Jean, Anne Perrot, Thomas Philippon, 18 June 2019

Some policymakers believe that EU competition policy prevents the emergence of industrial champions. The column argues that Europe’s competition policy has successfully contained the rise in concentration and excess profits, and the EU should not follow the US in weakening its approach. Instead, the EU needs to strengthen its trade policy to be more assertive on reciprocity in market access and control of industrial subsidies. 

Thomas N. Hubbard, 30 January 2019

Harold Demsetz, who passed away earlier this year, was an enormously influential figure in industrial organisation, the economics of organisation, and law and economics. This column, written by a friend and colleague, outlines some of his most influential ideas and characterises his thinking as rigorous, insightful and highly relevant to central problems in industrial organisation and business strategy today.

Daniel P. Gross, 20 January 2019

Creativity, despite its importance, is rarely studied by economists. The column uses the outcome of design competitions to evaluate whether positive ratings and strong competition spur creativity. Positive feedback with little competition reduces creativity, while the presence of small numbers of highly rated competitors increases it. But as the numbers of strong competitors increases, designers are increasingly likely to give up entirely.

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