Impact Evaluation of Merger Decisions

This paper provides a comparative analysis of methods for the empirical ex post evaluation of merger control decisions. It develops a competition-policy oriented framework of assessment criteria for the leading evaluation methods and applies them to structural modeling and simulation, differences-in-differences methods, event studies as well as survey-based methods. It concludes that a method-mix is recommendable, however, under the exclusion of event studies that fail to secure a minimum level of reliability regarding the evaluation results. Furthermore, it warns against overly optimistic expectations about the effects of systematic impact evaluations of merger decisions. I like to thank the participants of the OECD Roundtable „Impact Evaluation of Merger Decisions“ (Paris, Juni 2011), Arndt Christiansen and Knud Sinding for valua-ble comments on earlier versions of this paper as well as Janne Mordhorst for valuable editorial assistance.Empirical methods of industrial organization, merger control, competition policy, antitrust decisions, comparative analysis

An international multilevel competition policy system

This paper develops a proposal for an international multilevel competition policy system, which draws on the insights of the analysis of multilevel systems of institutions. In doing so, it targets to contribute to bridge a gap in the current world economic order, i.e. the supranational governance of private international restrictions to market competition. Such a governance can effectively be designed against the background of a combination of the well-known nondiscrimination principle and a lead jurisdiction model. Put very briefly, competition policy on the global level restricts itself to the selection and appointment of appropriate lead jurisdictions for concrete cross-border antitrust cases, while the substantive treatment remains within the competence of the existing national and regional-supranational antitrust regimes. --international competition policy,multilevel systems,international governance,economics of federalism,international economic order,international antitrust

A Note on Competing Merger Simulation Models in Antitrust Cases: Can the Best Be Identified?

Advanced economic instruments like simulation models are enjoying an increased popularity in practical antitrust. There is hope that they – being quantitative predictive economic evidence – can substitute for qualitative structural analysis and lead to unambiguous results. This paper demonstrates that it can be theoretically impossible to identify the most appropriate simulation model for any given merger proposal. Due to the inevitable necessity to reduce real-world complexity and multi-parameter character of merger cases, the comparative fit of proposed merger simulation models with mutually incompatible predictions can be the same. This is valid even if an ideal antitrust procedure is assumed. This insight is important regarding two aspects. First, the scope for partisan economic evidence cannot be completely eroded in merger control. Second, simulation cannot eliminate or substitute for qualitative reasoning and economically informed common sense.merger simulation, merger control, antitrust, economic evidence

The Institutional Framework for Doing Sports Business: Principles of EU Competition Policy in Sports Markets

The competition rules and policy framework of the European Union represents an important institutional restriction for doing sports business. Driven by the courts, the 2007 overhaul of the approach and methodology has increased the scope of competition policy towards sports associations and clubs. Nowadays, virtually all activities of sports associations that govern and organize a sports discipline with business elements are subject to antitrust rules. This includes genuine sporting rules that are essential for a league, championship or tournament to come into existence. Of course, „real? business or commercial activities like ticket selling, marketing of broadcasting rights, etc. also have to comply with competition rules. Regulatory activities of sports associations comply with European competition rules if they pursuit a legitimate objective, its restrictive effects are inherent to that objective and proportionate to it. This new approach offers important orientation for the strategy choice of sports associations, clubs and related enterprises. Since this assessment is done following a case-by-case approach, however, neither a blacklist of anticompetitive nor a whitelist of procompetitive sporting rules can be derived. Instead, conclusions can be drawn only from the existing case decisions – but, unfortunately, this leaves many aspects open. With respect to business activities, the focus of European competition policy is on centralized marketing arrangements bundling media rights. These constitute cartels and are viewed to be anticompetitive in nature. However, they may be exempted from the cartel prohibition on efficiency and consumer benefits considerations. Here, a detailed list of conditions exists that centralized marketing arrangements must comply with in order to be legal. Although this policy seems to be well-developed at first sight, a closer look at the decision practice reveals several open problems. Other areas of the buying and selling behavior of sports associations and related enterprises are considerably less well-developed and do not provide much orientation for business.sports business, competition policy, sporting rules, centralized marketing, sports economics

Local limits of uniform triangulations in high genus

We prove a conjecture of Benjamini and Curien stating that the local limits of uniform random triangulations whose genus is proportional to the number of faces are the Planar Stochastic Hyperbolic Triangulations (PSHT) defined in arXiv:1401.3297. The proof relies on a combinatorial argument and the Goulden--Jackson recurrence relation to obtain tightness, and probabilistic arguments showing the uniqueness of the limit. As a consequence, we obtain asymptotics up to subexponential factors on the number of triangulations when both the size and the genus go to infinity. As a part of our proof, we also obtain the following result of independent interest: if a random triangulation of the plane $T$ is weakly Markovian in the sense that the probability to observe a finite triangulation $t$ around the root only depends on the perimeter and volume of $t$, then $T$ is a mixture of PSHT.Comment: 36 pages, 10 figure

Monoculture versus diversity in competition economics

Economics rightfully represents the major basis for competition policy. Next to generating knowledge about competition and its welfare effects, the currently popular 'more-economic approach' is charged with a number of additional hopes and expectations, leading to a reduction of the ambiguities of real-world competition policy. While this article highlights the benefits of economics-based competition policy, it takes a cautious stance towards excessive expectations in particular regarding the idea that a monocultural, 'unified' competition theory as an exact, objective, and unerring scientific approach to antitrust makes normative assessment and generalizations superfluous. In a combination of two lines of argumentation, diversity in competition economics is advocated. Firstly, competition economics is empirically characterized by a considerable pluralism of theories and policy paradigms. This includes deviating views on core concepts like the nature of competition, the meaning of efficiency, or the goals of antitrust. Secondly, it is demonstrated that diversity of theories represents no imperfection of the state of science. In contrast, it is theoretically beneficial for future scientific progress. Therefore, no ultimate competition theory can ever be expected. As a consequence, the 'more-economic approach' must be extended in order to embrace diversity. This does not decrease its meaning and importance but instead puts some of the related high hopes into perspective. --antitrust,more-economic approach,competition policy paradigms,industrial economics,methodology of science

Sports Business and Multisided Markets: Towards a New Analytical Framework? (Long Version)

Despite still being younger than a decade, the theory of multisided markets has offered numerous valuable insights for the analysis of industries in which a supplier serves two distinct customer groups that are indirectly interrelated through externalities. Examples include payment systems, matching agencies, commercial media, and software platforms. However, professional sports mar-kets have largely been neglected so far in this kind of research although they possess the characteristics of multisided markets. This conceptual paper con-tributes to filling this gap by describing the platform elements of professional suppliers of sports events and conceptually outlining issues where an applica-tion of this theoretical framework is likely to provide valuable insights and to add to the existing knowledge. Among these problems are integrative pricing strategies of sports clubs towards such different customer groups like attendees, broadcasters, sponsors, etc., including their welfare and antitrust implications, design decisions of sports associations in order to promote positive feedback loops among the customer groups as well as management strategies to reinforce positive externalities among customer groups and alleviate negative ones. The authors would like to thank Anna Lund Jepsen and Nadine Lindstädt for valuable comments on earlier versions of this paper as well as Barbara Güldenring and Liz Patti for editorial assistance. A substantially shorter version of this paper will be published in Sports, Business, Management: An International Journal in 2011.sports economics, sports management, two-sided markets, multisided platforms, professional sports business, pricing strategies, broadcasting rights

The Prohibition of the Proposed Springer-ProSiebenSat.1-Merger: How much Economics in German Merger Control?

We review the Bundeskartellamt (Federal Cartel Office Germany) decision on the proposed merger between Springer and ProSiebenSat.1 from an economic point of view. In doing so, it is not our goal to analyse whether the controversial decision by the Bundeskartellamt has been correct or flawed from a legal point of view. Instead, we analyse whether the economic reasoning in the decision document reflects state-of-the-art economic theory on conglomerate mergers. Regarding such types of mergers, anticompetitive effects either do not occur regularly or are more often than not overcompensated by efficiency gains, so that a standard welfare perspective demands reluctance concerning antitrust interventions. This is particularly true if two-sided markets, like media markets, are involved. However, anticompetitive conglomerate mergers are not impossible, in particular in neighbouring markets where there is some relationship between the products of the merging companies. In line with the more-economic approach in European merger control, a particular thorough line of argumentation, backed with particularly convincing economic evidence, is necessary to justify a prohibition of a conglomerate merger from an economic point of view. Against this background, we do not find the reasoning of the Bundeskartellamt entirely convincing and sufficiently strong to justify a prohibition of the proposed combination from an economic perspective. The reasons are that (i) the Bundeskartellamt fails to continuously consider consumer and customer welfare as the relevant standards, (ii) positive efficiency and welfare effects of cross-media strategies are neglected, (iii) in contrast, the competition agency sometimes appears to view profitability of post-merger strategy options to be per se anticompetitive (efficiency offence), (iv) the incontestability of the relevant markets is not sufficiently substantiated, (v) inconsistencies occur regarding the symmetry of the TV advertising market duopoly versus the unique role of the BILD-Zeitung and (vi) the employment of modern economic instruments appears to be underdeveloped. Thus, we conclude that the Bundeskartellamt has not embraced the European more-economic approach in the analysed decision. However, one can discuss whether economic effects are overcompensated in this case by concerns about a reduction in diversity of opinion and threats to free speech. Similar to the Bundeskartellamt, we do not consider these concerns in our analysis.merger control, media markets, more-economic approach, conglomerate mergers, cross-promotion