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Report
Sunk costs, contestability, and the latent contract market
The idea that an industry with sunk costs may be contestable even in the absence of long-term contracts has received little attention from formal economic theory yet is popular among monopolists facing antitrust suits. The paper formally illustrates the argument. In an infinitely repeated game, there exists a class of contestable outcomes in which the monopolist sells only on the spot market and charges low prices along the equilibrium path to prevent customers from resorting to long-term contracts. Then, the crucial test for contestability is the level of transaction costs in the latent ...
Journal Article
Banking antitrust in transition
Journal Article
Antitrust analysis in banking : goals, methods, and justifications in a changed environment
During recent decades banking markets have changed considerably. Nevertheless, banking antitrust analysis continues to follow the same basic philosophy laid down 40 years ago by the Supreme Court. Does the change in banking markets imply the need to alter antitrust analysis in banking? This article reviews the methods of antitrust analysis and discusses justifications for them. The article concludes that the means of analysis continues to make sense regardless of a changed environment.
Working Paper
Structural screens in stochastic markets
Journal Article
Antitrust and payment technologies
Journal Article
Assessing bank antitrust standards
Working Paper
Are there regimes of antitrust enforcement? An empirical analysis
In this paper, the authors propose a new index of antitrust enforcement. The index is compiled from quarterly data from the Department of Justice from 1890 to 1989 and is designed to reflect the relative influence of variables that have deterrent effects. The authors use Hamilton's (1989, 1990) regime-switching technique to estimate a model in which the enforcement index follows a regime-specific AR(1) process. The authors find evidence of long-lived regimes. The high enforcement regime, which lasted from about 1910 to the mid-1960s, produced enforcement that was, on average, almost twice as ...
Conference Paper
Bank merger activity: the antitrust perspective