The impact of EU cartel policy reforms on the timing of settlements in private follow-on damages disputes: An empirical assessment of cases from 2001 to 2015
Private cartel damages litigation is on the rise in Europe since early 2000. This development has been initiated by the European courts and was supported by various policy initiatives of the European Commission, which found its culmination in the implementation of the EU Directive on Antitrust Damages end of 2016. This paper explores the impact of this reform process on effective compensation of damaged parties of cartel infringements. For that purpose we analyse all European cartel cases with a decision date between 2001 and 2015, for which we analyse litigation activity and speed. Overall, we find a substantial reduction of the time until first settlement (increase in litigation speed) together with a persisting high share of cases being litigated (high litigation activity). This supports the view that the reform not only increased the claimant’s expectation about the amount of damages being awarded, but also resulted in an alignment in the expectations of claimants and defendants in the final damages amount, i.e. the European Commission succeeded in reaching its objective to clarify and harmonize legal concepts across Europe.
We study a canonical model of simultaneous price competition between firms that sell a homogeneous good to consumers who are characterized by the number of prices they are exogenously aware of. Our setting subsumes many employed in the literature over the last several decades. We show there is a unique equilibrium if and only if there exist some consumers who are aware of exactly two prices. The equilibrium we derive is in symmetric mixed strategies. Furthermore, when there are no consumers aware of exactly two prices, we show there is an uncountable-infinity of asymmetric equilibria in addition to the symmetric equilibrium. Our results show the paradigm generically produces a unique equilibrium. We also show that the commonly-sought symmetric equilibrium (which also nests the textbookBertrand pure strategy equilibrium as a special case) is robust to perturbations in consumer behaviour, while the asymmetric equilibria are not.
Pages
17
Working Paper
Organizing for entrepreneurship: Field-experimental evidence on the performance effects of autonomy in choosing project teams and ideas
We build a framework where firm size is a source of market power in a frictional labor market. The key mechanism is that a granular employer can eliminate its own vacancies from a worker’s outside option in the wage bargain. Hence, a granular employer does not compete with itself for workers. We derive a structural mapping from a microfounded concentration index to average wages. Using the framework in Austrian micro-data, we find that granular market power depresses wages by 9-13 percent and can explain 40 percent of the observed decline in the labor share from 1997 to 2015. Merging the two largest firms in every labor market depresses market-wide wages by six percent.
Economics, politics and business environment; Management sciences, decision sciences and quantitative methods
Keyword(s)
Shapley value, potential, restriction operator, partition function form game, externalities
JEL Code(s)
C71, D60
In the absence of externalities, marginality is equivalent to an independence property that rests on Harsanyi‘s dividends. These dividends identify the surplus inherent to each coalition. Independence states that a player‘s payoff stays the same if only dividends of coalitions to which this player does not belong to change. We introduce notions of marginality and independence for games with externalities. We measure a player‘s contribution in an embedded coalition by the change in the worth of this coalition that results when the player is removed from the game. We provide a characterization result using efficiency, anonymity, and marginality or independence, which generalizes Young‘s characterization of the Shapley value. An application of our result yields a new characterization of the solution put forth by Macho-Stadler et al. (J Econ Theor, 135, 2007, 339-356) without linearity, as well as for almost all generalizations put forth in the literature. The introduced method also allows us to investigate egalitarian solutions and to reveal how accounting for externalities may result in a deviation from the Shapley value. This is exemplified with a new solution that is designed in a way to not reward external effects, while at the same time it cannot be assumed that any partition is the default partition.
Discrete choice, rational inattention, information acquisition, non-uniform information costs, market inference
JEL Code(s)
D40, D80
Consumers often do not have complete information about the choices they face and therefore have to spend time and effort in acquiring information. Since information acquisition is costly, consumers trade-off the value of better information against its cost, and make their final product choices based on imperfect information. We model this decision using the rational inattention approach and describe the rationally inattentive consumer’s choice behavior when she faces alternatives with different information costs. To this end, we introduce an information cost function that distinguishes between direct and implied information. We then analytically characterize the optimal choice probabilities. We find that non-uniform information costs can have a strong impact on product choice, which gets particularly conspicuous when the product alternatives are otherwise very similar. There are significant implications on how a seller should provide information about its products and how changes to the product set impacts consumer choice. For example, non-uniform information costs can lead to situations where it is disadvantageous for the seller to provide easier access to information for a particular product, and to situations where the addition of an inferior (never chosen) product increases the market share of another existing product (i.e., failure of regularity). We also provide an algorithm to compute the optimal choice probabilities and discuss how our framework can be empirically estimated from suitable choice data.
Technologieanalysen. Ergebnisse der Umfrage zur Einstufung und Bewertung von Technologien [Technology analyses. Survey based results for classification and qualification of technologies]
Free University Berlin Working paper
Elisabeth Eppinger, Andreas Tauber, Monique Goepel, Viktor Jarotschkin (2018)
Betting on right technologies, selecting meaningful fields of application and thus steering technology developments with suitable properties in the right direction is crucial for the sustainable success of technology companies. However, due to the worldwide increase and rapid acceleration of research and development activities as well as the increasing integration of value chains, it is becoming increasingly difficult to correctly assess technology developments. At the same time, access to data and information has dramatically improved powered by the developments of the world wide web. Powerful information and telecommunication devices as well as software make large data sets easier to access and complex data analyses with new types of indicators possible. Thus, the possibilities of indicator-based technology assessments have also improved for companies that have very limited resources for technology analysis. In order to provide an up-to-date overview of which indicators and methods for technology analysis are currently used in practice and in science, the Chair of Innovation Management of the Free University Berlin conducted a survey of German-speaking experts* from business and science in November and December 2017. The results are presented in this report.
Pages
62
Working Paper
Defaults and donations: Evidence from a field experiment
Düsseldorf Institute for Competition Economics Discussion PaperNo. 294