In this article, published in The Criterion Journal of Innovation, Michael Salinger and Geeta Gouri examine the merits of competition cases brought against Google with respect to alleged search bias. The four key steps in a structured investigation into an alleged abuse of dominance/monopolization/unfair method of competition are:
1) characterization of the conduct,
2) market definition,
3) assessment of market power, and
4) assessment of competitive effects.
Of these, the last step is the most important as it addresses the ultimate issue in the investigation. The authors analyze the fourth step and argue that the behavior at issue is competitive. They then go through the first three steps and show that while economically sound analysis of those steps clarifies the proper answer to the fourth step, an overly mechanistic approach to those steps can obscure clear analysis in the fourth step.
To read the article, click the link below.
Assessing umbrella pricing incentives
When collusive agreements involve a subset of firms in an industry, they may create the incentive and ability for firms that are not participants in the cartel...