Is market definition always necessary in determininganticompetitive effect?- Focused on recent discussions about market definition and market power in the United States -

2015 ◽  
Vol 64 (1) ◽  
pp. 58-102
Author(s):  
Kang, Sang Duk
Keyword(s):  
United States ◽  
Market Power ◽  
The United States ◽  
Market Definition

scholarly journals The impact of geographic market definition on the stringency of hospital merger control in Germany and the Netherlands

2012 ◽  
Vol 7 (3) ◽  
pp. 363-381 ◽  
Author(s):  
Marco Varkevisser ◽  
Frederik T. Schut
Keyword(s):  
United States ◽  
The Netherlands ◽  
The United States ◽  
Merger Control ◽  
Market Definition ◽  
Competition Authority ◽  
Hospital Mergers ◽  
Hospital Markets ◽  
Hospital Merger ◽  
The Impact

AbstractIn markets where hospitals are expected to compete, preventive merger control aims to prohibit anticompetitive mergers. In the hospital industry, however, the standard method for defining the relevant market (SSNIP) is difficult to apply and alternative approaches have proven inaccurate. Experiences from the United States show that courts, by identifying overly broad geographic markets, have underestimated the anticompetitive effects of hospital mergers. We examine how geographic hospital markets are defined in Germany and the Netherlands where market-oriented reforms have created room for hospital competition. For each country, we discuss a landmark case where definition of the geographic market played a decisive role. Our findings indicate that defining geographic hospital markets in both countries is less complicated than in the United States, where antitrust analysis must take managed care organisations into account. We also find that different methods result in much more stringent hospital merger control in Germany than in the Netherlands. Given the uncertainties in defining hospital markets, the German competition authority seems to be inclined to avoid the risk of being too permissive; the opposite holds for the Dutch competition authority. We argue that for society the costs of being too permissive with regard to hospital mergers may be larger than the costs of being too stringent.

scholarly journals Are Price-Cost Markups Rising in the United States? A Discussion of the Evidence

2019 ◽  
Vol 33 (3) ◽  
pp. 3-22 ◽  
Author(s):  
Susanto Basu
Keyword(s):  
United States ◽  
Market Power ◽  
Marginal Cost ◽  
Cost Minimization ◽  
National Income ◽  
The United States ◽  
Aggregate Data ◽  
The Past ◽  
Labor's Share

A number of recent papers have argued that US firms exert increasing market power, as measured by their markups of price over marginal cost. I review three of the main approaches to estimating economy-wide markups and show that all are based on the hypothesis of firm cost minimization. Yet different assumptions and methods of implementation lead to quite different conclusions regarding the levels and trends of markups. I survey the literature critically and argue that some of the startling findings of steeply rising markups are difficult to reconcile with other evidence and with aggregate data. Existing methods cannot determine whether markups have been stable or whether they have risen modestly over the past several decades. Even relatively small increases in markups are consistent with significant changes in aggregate outcomes, such as the observed decline in labor’s share of national income.

Introduction to Antitrust and the Provision of Healthcare in the United States and European Union

2020 ◽  
Author(s):  
Thomas Greaney ◽  
Okeoghene Odudu
Keyword(s):  
United States ◽  
European Union ◽  
Market Power ◽  
Healthcare Professionals ◽  
Healthcare Providers ◽  
The United States ◽  
Service Users ◽  
Healthcare Provision ◽  
Apparent Absence ◽  
Market Solutions

This chapter discusses healthcare provision in the United States and European Union, setting out some of the challenges faced and solutions adopted when seeking to use antitrust law to address market power problems arising in systems of healthcare provision. In the United States, where market solutions have greatest acceptance, antitrust has played and continues to play an important role in setting boundaries regarding conduct that providers and payers may undertake. In European jurisdictions, despite the apparent absence of markets, antitrust has played a similar role on the provider side while leaving the payer side largely untouched. Thus, antitrust has been used to prevent the use or abuse of market power held by healthcare professionals, institutional healthcare providers, or a combination of the two groups, to ensure that such agreements are in the interests of healthcare service users rather than the professionals or providers themselves. Where antitrust has struggled in European jurisdictions is with the behavior of payers and the decisions that payers make—revealing, in Europe at least, some limits of antitrust.

A Giant Problem: The Influence of the Chicago School on Australian Competition Law, Economic Dynamism and Inequality

2019 ◽  
Vol 47 (4) ◽  
pp. 696-714 ◽  
Author(s):  
Adam Triggs ◽  
Andrew Leigh
Keyword(s):  
United States ◽  
Market Power ◽  
Competition Law ◽  
Chicago School ◽  
The United States ◽  
Market Concentration ◽  
Vertical Restraints ◽  
Barriers To Entry ◽  
Competitive Process ◽  
Growing Body

Australia has a competition problem: there is not enough of it. Our industries are concentrated. Our markets show signs of weak competition. The way Australia’s courts, parliamentarians and regulators think about competition is partly to blame. Although it has been less influential in Australia than in the United States, the Chicago School’s views on competition have shaped our laws, policies and enforcement practices. The Chicago School views market concentration as a virtue more than a vice. The School contended that barriers to entry are negligible, market power is temporary, most mergers are good, vertical restraints and predatory pricing are either benign or efficient. The growing body of research and experience, however, shows that the Chicago School’s faith in the ability of markets to self-correct and deliver competitive outcomes was misplaced. There is a strong progressive case for repositioning how we think about competition. Focusing more on the competitive process, the structure of markets and the incentives those structures create for firms will play an important role in reducing inequality.

The institutional foundations of hegemony: explaining the Reciprocal Trade Agreements Act of 1934

1988 ◽  
Vol 42 (1) ◽  
pp. 91-119 ◽  
Author(s):  
Stephan Haggard
Keyword(s):  
United States ◽  
Market Power ◽  
Policy Process ◽  
Trade Agreements ◽  
The United States ◽  
Pressure Group ◽  
Credible Commitments ◽  
Trade Politics ◽  
Group Politics ◽  
Institutional Foundations

In 1930, Congress approved the highly restrictive Smoot–Hawley tariff, the textbook case of pressure group politics run amok. Four years later, Congress passed the Reciprocal Trade Agreements Act (RTAA), surrendering much of its tariff-making authority to a policy process in which internationalists had increasing influence. While the United States had used reciprocity to expand exports before, the stick of discriminatory treatment took precedence over the carrot of liberalizing concessions. With the transfer of tariff-making authority to the executive, the United States could make credible commitments and thus exploit its market power to liberalize international trade. Despite later modifications, the RTAA set the fundamental institutional framework for trade politics.

1. Introduction to competition law

2019 ◽  
pp. 1-26
Author(s):  
Sandra Marco Colino
Keyword(s):  
United States ◽  
Market Power ◽  
Free Market ◽  
Supply And Demand ◽  
Competition Law ◽  
The United States ◽  
Market System ◽  
House Of Lords ◽  
Competitive Activity ◽  
Made In

This chapter presents an introduction to competition law covering the development of competition law, the experience of the United States, economics and competition law, and competition law resources. Competition law is the legislation that ensures competition is protected from unrestrained market power in free market economies. The primary purpose of competition law is to remedy some of the situations in which the free market system — in which supply and demand, and not government intervention, determine the allocation of resources — breaks down. The point was well made in the House of Lords debate during the passage of the Competition Act 1998 (CA) that ‘competition law provides the framework for competitive activity. It protects the process of competition’.

scholarly journals Heterogeneous Markups, Growth, and Endogenous Misallocation

Econometrica ◽  
2020 ◽  
Vol 88 (5) ◽  
pp. 2037-2073 ◽  
Author(s):  
Michael Peters
Keyword(s):  
United States ◽  
Market Power ◽  
Productivity Growth ◽  
Firm Dynamics ◽  
The United States ◽  
Equilibrium Outcome ◽  
Firm Level ◽  
Competitive Effects ◽  
Level Data ◽  
Firm Level Data

Markups vary systematically across firms and are a source of misallocation. This paper develops a tractable model of firm dynamics where firms' market power is endogenous and the distribution of markups emerges as an equilibrium outcome. Monopoly power is the result of a process of forward‐looking, risky accumulation: firms invest in productivity growth to increase markups in their existing products but are stochastically replaced by more efficient competitors. Creative destruction therefore has pro‐competitive effects because faster churn gives firms less time to accumulate market power. In an application to firm‐level data from Indonesia, the model predicts that, relative to the United States, misallocation is more severe and firms are substantially smaller. To explain these patterns, the model suggests an important role for frictions that prevent existing firms from entering new markets. Differences in entry costs for new firms are less important.

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