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GREDEG Working Paper No. 2020-56; During the 1920s, two different proposals of a regulated competition competed in the US. The first, inspired by trade associations, was advocated by Herbert Hoover. This approach echoes a managerialist view of a coordinated competition under state support. The second - promoted by Louis Brandeis - provides an alternative view of what a regulated competition should be: avoiding a ruinous competition through information exchange among small firms. From his involvement in the Wilson’s campaign team in 1912, to his dissent in the American Colum ruling of the US Supreme Court in 1923 and his position against the National Industrial Recovery Act in Schechter Poultry in 1935, we argue that Louis Brandeis was constant in his opposition to such a convergence between Big Business and Big Government. His intemporal coherence relies in his Jeffersonian approach advocating for a dispersion of economic powers for both efficiency and political purposes. At the opposite, both the trade associations’ movement and the NIRA experience pertain to a Hamiltonian perspective that is based on an equilibrium between the economic gains resulting from concentration or coordination and a strong political control.Available at: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2020-56.pdf

International audience; This article conducts a detailed analysis of the concept of economic dependence and exploitative abuse based on how their treatment in competition law and economics and their enforcement in European case law have evolved. Although the theoretical roots of these concepts lie in economic theory, these issues have been ignored or considered only scantily in the context of competition law enforcement. An effects-based approach should take these problems into account and could provide insights into how to portray the impacts of these abuses. We draw on two examples – from the agri-food industries and the digital economy – of relevant economic dependence issues. This paper highlights the existence of a paradox: although industrial organization models provide relevant tools to characterize these abuses, assess their effects, and devise remedies, it seems that they are seldom used by competition law enforcers.; Cet article analyse les concepts d’abus d’exploitation et de dépendance économique, non seulement sous le prisme de la jurisprudence concurrentielle européenne mais également sous celui de l’économie industrielle. Bien que les racines théoriques de ces concepts reposent sur la théorie économique, ils ont été ignorés ou peu pris en compte dans le contexte de l’application du droit de la concurrence. Une approche fondée sur les effets (effects-based) devrait tenir compte de ces pratiques et pourrait fournir des indications sur la façon d’analyser leurs impacts. Nous nous appuyons sur deux exemples tirés des industries agro-alimentaires et de l’économie numérique. Le présent article souligne l’existence d’un paradoxe : bien que les modèles d’organisation industrielle fournissent des outils pertinents pour caractériser ces abus, évaluer leurs effets et concevoir des mesures correctives, ils demeurent peu utilisés dans la pratique décisionnelle.

International audience; Theoretical research has investigated the relevance of entry-inducing effects as countervailing factor to a merger-related increase in market power.We use route level data for the America West Airlines-US Airways merger (2005) to investigate whether such an effect can be identified empirically. Our results show that both entry-inducing and entry-dissuading effects can be observed depending on the type of affected route and the carrier under investigation.

International audience; The paper analyzes the interactions between trade and renewable energy policies based on the EU-China solar panel dispute which is the most significant antidumping (AD) complaint in Europe. We build a price competition duopoly model with differentiated products and intra-industry trade in photovoltaic (PV) equipment. We show that an optimal antidumping duty always increases with the feed-in tariff (FIT) program set in the home country. An appropriate antidumping duty - nullifying the dumping margin - decreases with the FIT program. We show that optimal FIT increases with the AD duty. Therefore, trade and renewable energy optimal policies may complement one another. Lastly, we introduce R\&D activities in the PV sector, and international spillovers. We show that R\&D makes the optimal FIT lower and increases the dumping margin. These effects are reinforced by technological spillovers.

The purpose of this article is to show, based on the case of the French market, that consumer perception of different funeral service offers, along with new entry in a special storing facility service (“chambre funéraire”), can be sufficient to impose competitive pressures on the various suppliers, including the former monopolist. With a discrete choice experiment implemented in Lyon, France, we find evidence that, contrary to widely shared beliefs about this specific market, demand for funeral services seems characterized by relatively high price elasticities, at least as soon as consumers are fully informed about the opportunities open to them in this market. Consumer behavior has actually changed in favor of a better assessment of the different possibilities of services supplied and of their relative price. We then implement simulations in local markets and show that, with good consumer information, the market power of the supposedly dominant firm is much less important than it is generally believed. Furthermore, simulations stress the procompetitive effects of setting up a new storing facility by any businesses. We finally show that, if some improvements can still be brought to the functioning of this market, they should come from a better regulation of consumer information and of the entry of firms.

International audience; Faced with the energy transition imperative, governments have to decide about public policy to promote renewable electrical energy production and to protect domestic power generation equipment industries. For example, the Canada - Renewable energy dispute is over Feed-in tariff (FIT) programs in Ontario that have a local content requirement (LCR). The EU and Japan claimed that FIT programs constitute subsidies that go against the SCM Agreement, and that the LCR is incompatible with the non-discrimination principle of the World Trade Organization (WTO). This paper investigates this issue using an international quality differentiated duopoly model in which power generation equipment producers compete on price. FIT programs including those with a LCR are compared for their impacts on trade, profits, amount of renewable electricity produced, and welfare. When 'quantities' are taken into account, the results confirm discrimination. However, introducing a difference in the quality of the power generation equipment produced on both sides of the border provides more mitigated results. Finally, the results enable discussion of the question of whether environmental protection can be put forward as a reason for subsidizing renewable energy producers in light of the SCM Agreement.

In this article, we use a history of economic thought perspective to analyze the process by which the Chicago School of Antitrust emerged in the 1950s and became dominant in the US. We show the extent to which economic objectives and theoretical views shaped antitrust laws in their inception. After establishing the minor influence of economics in the promulgation of U.S. competition laws, we then highlight U.S. economists' very cautious views about antitrust until the Second New Deal. We analyze the process by which the Chicago School developed a general and coherent framework for competition policy. We rely mainly on the seminal and programmatic work of Director and Levi (1956) and trace how this theoretical paradigm was made collective, i.e. the 'economization' process took place in US antitrust. Finally, we discuss the implications, if not the possible pitfalls, of such a conversion to economics-led competition law enforcement.

International audience; This paper aims to analyze the effectiveness of asset transfers in preventing unilateral effects of a merger. We show that asset divestitures allow the remedying of certain price increases. Market size negatively impacts the scope of the divestiture package, while the number of merging firms increases with it. In spite of the required asset sale, parties' profitability remains ensured in most cases. Buyers always make profit from their purchase if industry fixed costs are rather low. We also add the alternative of a second buyer and compare outcomes with both consumer and welfare standards. Furthermore, as many mergers lead to efficiency gains, we integrate specific cost synergies and show that the higher synergies, the smaller the divestiture share. In the case when no buyers are available, we show that the option of divesting to a start-up entity is bound to fail if firms' technology remains the same. Lastly, we find that product differentiation can reduce the efficiency of the asset transfer.

Évaluation SMART - auteur hors Unité au moment de la publication; International audience; This paper aims to build and empirically evaluate a discrete choice model of merger remedies as a basis for policy analysis. The database consists of 229 merger cases accepted in Phase I or Phase II of the European merger process between 1990 and 2005. We focus on the following question: Which merging firms’ characteristics lead the European Commission to decide whether to require conditional acceptance? Although a lot of empirical studies have been carried out these last years, ours is distinguished by at least two original features. First, we explore determinant factors of the Commission’s decisions with a neural network model differentiating cases accepted with or without remedies (either structural or behavioral). Secondly, we implement three multinomial logit models. We find that variables related to high market power lead more frequently to a remedy outcome, no matter the phase. Innovative industries such as energy, transportation and communications positively affect the probability of a behavioral remedy. Lastly, former Competition Commissioner Mario Monti’s policy appears to be pro-remedy, i.e. seeking concessions from merging parties.

This paper aims to build and empirically evaluate a discrete choice model of merger remedies as a basis for policy analysis. The database consists of 229 merger cases accepted in Phase I or Phase II of the European merger process between 1990 and 2005. We focus on the following question: Which merging firms’ characteristics lead the European Commission to decide whether to require conditional acceptance? Although a lot of empirical studies have been carried out these last years, ours is distinguished by at least two original features. First, we explore determinanting factors of the Commission’s decisions with a neural network model differentiating cases accepted with or without remedies (either structural or behavioral). Secondly, we implement three multinomial logit models. We find that variables related to high market power lead more frequently to a remedy outcome, whatever the phase. Innovative industries such as energy, transportation and communications positively affect the probability of a behavioral remedy. Lastly, former Competition Commissioner Mario Monti’s policy appears to be pro-remedy, i.e. seeking concessions from merging parties.