It is widely believed that fuel prices tend to rise swiftly when oil prices increase, but take longer to fall after oil prices decrease. This ¡°rockets and feathers¡± pattern could be due to tacit collusion at some level of the supply chain. We test the ¡°rockets and feathers¡±...

When large retailers merge, there is a concern that a sudden and marked increase in concentration will alter the intensity and nature of price competition to the detriment of consumers. This chapter considers just such a situation in regard to UK grocery retailing, which has witnessed steadily...

This chapter provides a comprehensive discussion of the deterrence properties of a competition policy regime. On the basis of the economic theory of law enforcement, we identify several factors that are likely to affect its degree of deterrence: (1) sanctions and damages; (2) financial and human...

We examine aspects of how new technology may be transferred to firms that use it in a final product market. Should technology transfer take place to a single firm or to more than one, and should it happen gradually or at once? How do the incompleteness of contracts and the nature of product...

In this chapter, we review some recent work on public intervention in economic environments where firms undertake investments in research or in physical assets, and then select appropriate business practices to extract profits from the outcomes of the investment process. Public policies may take...

We study the impact of legal principles on the design and the effectiveness of antitrust fines. Modern antitrust enforcement obeys four basic legal principles: punishments should fit the crime, proportionality, bankruptcy considerations, and minimum fines. We integrate these principles into a...

Public policy makers around the world are concerned with the cost and quality of healthcare. I argue that competition-policy economics can make valuable contributions to solving the healthcare crisis by addressing four fundamental questions:Why don't insurance companies offer policies that...

We develop a parametric model in which a high-quality dominant firm faces a low-quality competitive fringe. We show that in this model, an increase in the dominant firm's product quality increases total welfare and consumer surplus. An increase in fringe firm quality has an ambiguous effect on...

We consider the interaction between an incumbent firm and a potential entrant, and examine how this interaction is affected by demand fluctuations. Our model gives rise to procyclical entry, prices, and price-cost margins, although the average price in the market can be countercyclical if the...

By defining three targets as pillars of their environmental policy (20% cleaning, 20% greening, and 20% saving energy by 2020), European authorities are putting out noisy signals on what the actual objective is and how to achieve it. I show that, whereas the community-wide CO2 market (named...