single firm conduct

Famous Trademarks and The Rational Basis For Protecting Irrational Beliefs

Contrary to the traditional view, this article argues that mega-brands are neither economic evils nor limited to imparting information about the products they adorn. It also rejects the view that famous marks persuade “snobs” to “irrationally” pay more for the same physical product they could have purchased for less. Rather, it adopts the view that in purchasing a branded good, the consumer is actually purchasing a bundle of three products: a physical product, information about the physical product, and an intangible product, such as fame, prestige, peace of mind, or a pleasant feeling. This article explores the demand for the intangible product and its impact on pricing, welfare, and the strategies of consumers and producers. It concludes that under certain conditions one may witness the anomaly of an increase in both price and output. Further, contrary to conspicuous goods theory, this analysis shows that snobbism may occur in the traditional downward-sloping demand curves and is not limited to goods with conspicuous properties. A direct implication of this analysis is that mega-brands neither confer a monopoly nor foster price discrimination. On the contrary, they enhance competition in both the physical and intangible spheres. Further, the analysis provides a rational basis for anti-dilution law. Anti-dilution law - widely considered to protect producers and injure consumers - actually inures to the benefit of both groups. Finally, this analysis shows that even snobs are rational, and that there are sound economic justifications for the law’s unique protection of famous marks. Keywords: famous trademarks, mega brands, persuasive advertising, branding, intangible product, snobs, conspicuous goods, irrational consumers, social norms, anti-dilution, externality, intellectual property, price discrimination, tying, antitrust, psychological value
Reference :

14 Geo. Mason L. Rev. 605 (2007) (Lead Article)

Access Barriers to Competition

While data were always valuable in a range of economic activities, the advent of new and improved technologies for the collection, storage, mining, synthesizing, and analysis of data has led to the ability to utilize vast volumes of data in real-time in order to learn new information. Part I explores the four primary characteristics of big data: volume, velocity, variety, and veracity and their effects of the value of data. Part II analyzes the different types of access barriers that limit entry into the different links of the data value chain. In Part III, we tie together the characteristics of big data markets including potential entry barriers, to analyze their competitive effects. The analysis centers on those instances in which the unique characteristics of big data markets lead to variants in the more traditional competitive analysis. Our analysis suggests that the unique characteristics of big data have an important role to play in analyzing competition and in evaluating social welfare.
Reference :

Rubinfeld, Daniel L. and Gal, Michal S., Access Barriers to Big Data, forthcoming Arizona L. Rev (2017), available at SSRN: https://ssrn.com/abstract=2830586

Algorithmic Consumers

The next generation of e-commerce will be conducted by digital agents, based on algorithms that will not only make purchase recommendations, but will also predict what we want, make purchase decisions, negotiate and execute the transaction for the consumers, and even automatically form coalitions of buyers to enjoy better terms, thereby replacing human decision-making. Algorithmic consumers have the potential to change dramatically the way we conduct business, raising new conceptual and regulatory challenges. This game-changing technological development has significant implications for regulation, which should be adjusted to a reality of consumers making their purchase decisions via algorithms. Despite this challenge, scholarship addressing commercial algorithms focused primarily on the use of algorithms by suppliers. This article seeks to fill this void. We first explore the technological advances which are shaping algorithmic consumers, and analyze how these advances affect the competitive dynamic in the market. Then we analyze the implications of such technological advances on regulation, identifying three main challenges.
Reference :

Gal, Michal S. and Elkin-Koren, Niva, Algorithmic Consumers (August 8, 2016). Harvard Journal of Law and Technology, Vol. 30, 2017. Available at SSRN: https://ssrn.com/abstract=2876201

Margin Squeeze in the Telecommunications Sector: A More Economics-based Approach

A margin squeeze occurs when a vertically integrated company, dominant in the supply of an indispensable upstream input, pursues a pricing policy which prevents downstream competitors from trading profitably, thereby leading to their ultimate exclusion from the downstream market. In the telecommunications sector, where large ex-state firms still enjoy considerable market power, margin squeeze has long been frequent. Interestingly, the United States and the European Union have tackled this problem in considerably different ways. Dismayed by the idea of an antitrust court intervening in a company’s price setting, the US Supreme Court held that margin squeeze was exclusively the domain of regulation. Conversely, the Court of Justice of the European Union has endorsed a modern economics-based approach enabling competition authorities to engage in a coherent and verifiable antitrust assessment of the price differentials that potentially amount to a margin squeeze. This paper will argue that (1) the economics-based approach is the right solution in the European context, but that (2) this approach will only lead to convincing results if it includes a rigorous and transparent analysis of the effects on competition and consumers.
Reference :

World Competition 35(2)/2012, S. 205–232 (Kluwer Law International BV, The Netherlands)

Digital markets: New rules for competition law

Many people are concerned about the strong market position of certain individual companies of the digital economy. This paper (editorial) discusses proposals on how to create incentives for quick closure of abuse cases. It also proposes to extend the reach of European merger control. That extension would alow to catch operations between parties that have heretofore shown modest annual turnovers but have a high market potential (as expressed by high sales prices).
Reference :

http://jeclap.oxfordjournals.org/cgi/content/full/lpv049?ijkey=iFn5Cfi83SpdzaK&keytype=ref

Freedom of Choice - The Emergence of a Powerful Concept in European Competition Law

as the world is looking for a new standard to design and apply rules of competition, one possibility would be to let markets decide what is best for them.
Reference :

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2077694

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