The 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.”

Read the full piece here.

Jonathan 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 policies. Baker sees the growing rift between the agencies as one of ideologies — one mainstream and one radical…

Read the full piece here. 

Much 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 to visit those islands the inhabitants come out with sticks and torches and try to chase you away.” It looks like the recent dust-up over the Section 2 Report is going to be the latest front in that matter.  Here’s the DOJ Report, the Statement from Commissioners Rosch, Leibowitz and Harbour, and from Chairman Kovacic.

Read the full piece here. 

As 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. (And on a more personal note, Leegin‘s holding meant that I didn’t have to eat my hat, as I’d promised to do if the Court upheld the per se rule against vertical price-fixing.)

Read the full piece here. 

Coca-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…

Read the full piece here.

Abstract

When the winner of one auction gains a cost advantage in the next, bids reflect not only the value of winning the auction, but also the value of gaining an incumbent advantage in future auctions. If a larger firm’s advantage derives from a cost or product advantage, it has a greater chance of holding onto incumbency status which, in turn, increases the value it places on gaining incumbency. As a consequence, larger firms bid more aggressively than their smaller rivals, where “size” is measured by the probability of winning. In this environment, mergers eliminate competition among the merged firms but they also change bidding behavior by both merging and non-merging firms. Computational experiments suggest that the scope for pro-competitive mergers is much wider than in auctions without an incumbent advantage. In particular, mergers among smaller firms are likely to be pro-competitive because they tend to create better losers, i.e., firms who bid more aggressively but still lose a large part of the time.

Luke 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 if the merger does not create efficiencies.

Read the full piece here.

Steve 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 fact) and (for the fallacy of theory) “that consumption (rather than savings/investment) is the key to economic growth.” The comments are definitely worth a read if you find the topic interesting and include lots of good nominations.

Read the full piece here.

An 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. That’s great news for me, because I’ve spent most of the summer cranking out an article on how exactly such price-fixing should be evaluated now that the Dr. Miles rule of per se legality is dead.

Read the full piece here.