Publications
E.CA Economists publish regularly in academic journals, competition and regulation journals and the more popular business press. We speak frequently at conferences, workshops and symposiums.
Owner Effect and Sunk Investments
Keywords: owner effect, sunk investments
How to deal with price wars in cartel damages estimations?
A standard approach to damages estimation is to compare prices during the cartel period with prices before or after. However, it is not uncommon to see prices wars right after the cartel breaks down. As price wars are characterised by prices below the competitive level, an inclusion of price wars in the comparison period can lead to overcharges that are too high. This E.CA Compact explains how we modelled the price war period in the example of a German cement cartel.
Keywords: damage estimation, price wars
Dominant and Efficient – On the Relevance of Efficiencies in Abuse of Dominance Cases
The European Commission’s policy on the relevance of efficiency considerations in abuse of dominance cases (Article 102 TFEU) has not been resolved satisfactorily. In an attempt to give guidance on this matter, we address the topic from two different angles: First, we review EC soft law provisions and recent decisions. Based on this review, we find that efficiency defences play a limited role under the current practice. They are of relevance in the growing number of IT related cases but only in these. Second, we explore – in the example of low price strategies – business practitioners’ views on the relevance of the pro and anti-competitive motives. Based on a survey of EMBA students, we find that low price strategies are indeed frequently used. The motives are diverse however, often pro-competitive and in line with antitrust compliance, i.e. low price strategies are rarely considered advisable for leading firms. Finally, policy conclusions are drawn.
Keywords: antitrust policy, efficiency defence, predatory pricing
Competition Law in Regulated Industries: On the Case and Scope for Intervention
Keywords: regulation, telecommunication
Automatically renewable contracts hamper switching to competitors
On behalf of Ofcom, E.CA and Gregory Crawford empirically analysed the impact of BT’s automatically renewable contracts on customer switching behaviour between telecom providers. Accounting for a variety of confounding factors, including tenure, bundling, price discounts and self-selection into contracts, it was found that households on automatically renewable contracts switch 35% less often than comparable households on standard contracts. In light of these findings Ofcom decided to prohibit these contracts in the fixed-line voice and boradband sectors for residential and small-business customers.
Keywords: switching, telecoms
Are EC State aid rules compatible with attracting airlines through rebates?
Operating an airport profitably means generating sufficient traffic to cover operation costs at a margin which allows recovering fixed costs in the long run. Thus, airports often incentivise the opening of new routes or the establishing of hub status by individual airlines through rebate schemes. State-owned airports face the challenge to self-assess whether those rebates are in compliance with EC State aid rules. This note illustrates a simple but robust technique for such a self-assessment.
Keywords: rebates, state aid
Estimating network effects in two-sided markets without data on prices and quantities
Keywords: Two-sided markets; Network effects; Semi-structural model
Vertical coordination through renegotiation
This paper analyzes the strategic use of bilateral supply contracts in sequential negotiations between one manufacturer and two differentiated retailers.