We show how observed product margins may be used in lieu of an observed market elasticity to calibrate parameters for two commonly used demand forms: the Almost Ideal Demand System (AIDS) and the multinomial logit. This technique is useful for antitrust practitioners interested in simulating the...

In antitrust enforcement as in cost-benefit analysis, neoclassical economics may be interpreted as arguing for the use of a “total welfare” standard whose implementation treats transfers as welfare-neutral. Several recent papers call for antitrust agencies to move in the direction of this...

Economists sometimes decry the persistence with which firms set prices above marginal cost and thus, according to the economists, fail to maximize profits. But it is the economists who have it wrong – first, because variable accounting costs are not always a good proxy for marginal economic...

In the U.S., unlike much of the rest of the world, the mixing of banking and commerce is largely prohibited. One exception is industrial loan companies (ILCs), state chartered depository institutions some of which are owned by commercial parents. In 2006, the FDIC put a moratorium on the...

In this paper I describe a method for analyzing mergers in industries in which it is more cost effective to close capacity than to idle it. The method can be used to define markets, to assess the likelihood of competitive effects and to evaluate divestitures. I also discuss the method’s data...

Motivated by relatively recent theoretical contributions on the role played by uncertainty, sunk costs and technological change in influencing entry, exit and industry structure, we conduct an empirical analysis covering 267 U.S. manufacturing industries over the period 1963-1992.

Trade barriers are failing and U.S. producers are competing in increasingly open international markets. Further, data reveal considerable heterogeneity across industries in the intertemporal path of import-penetration. Against this backdrop, we focus on an issue that is increasingly important...

Research joint ventures may coordinate research investments or improve research sharing. When research joint venture partners only share R&D results, large consortia are more profitable than small ones, and joint ventures prefer their rivals dispersed. According to a coalition formation game, an...

The decision to request a preliminary injunction—a court order that bans a party from certain actions until their lawfulness are ascertained in a final court ruling at trial—is an important litigation instrument in many areas of the law including antitrust, copyright, patents, trademarks,...

In this article we distinguish between two types of single-firm conduct. The first, which we call "extraction," is conduct engaged in by the firm to capture surplus from what the firm has itself created independent of the conduct’s effect on rivals. The second, which we call “extension," is...