A Simple Theory of Predation

We propose a simple theory of predatory pricing, based on incumbency advantages, scale economies and sequential buyers (or markets). The prey needs to reach a critical scale to be successful. The incumbent (or predator) has an initial advantage and is ready to make losses on earlier buyers so as to deprive the prey of the scale the latter needs, thus making monopoly profits on later buyers. Several extensions are considered, including cases where scale economies exist because of demand externalities or two-sided market effects, and where markets are characterized by common costs. Conditions under which predation may take place in actual cases are also discussed.

Winner-Picking or Cross-Subsidization? The Strategic Impact of Resource Flexibility in Business Groups

We show that in business groups with efficient internal capital markets both winner-picking and cross-subsidization may occur. Depending on the amount of internal resources, a group may either exit a market in response to increased competition, or rather channel funds to the subsidiary operating in that market. This has important implications for the strategic impact of group membership. Affiliation to a monopolistic subsidiary can make a cash-rich stand-alone firm more vulnerable to entry deterrence. Conversely, a cash-poor firm becomes less sensitive to its financial constraints upon affiliation to a group, and thus less vulnerable to entry deterrence. Finally, resource flexibility within a group makes subsidiaries' reaction functions flatter, thus discouraging rivals' strategic commitments when entry is accommodated.Expectations, Pension reform

A Simple Theory of Predation

We propose a simple theory of predatory pricing, based on scale economies and sequential buyers (or markets). The entrant (or prey) needs to reach a critical scale to be successful. The incumbent (or predator) is ready to make losses on earlier buyers so as to deprive the prey of the scale it needs, thus making monopoly profits on later buyers. Several extensions are considered, including markets where scale economies exist because of demand externalities or two-sided market effects, and where markets are characterised by common costs. Conditions under which predation may take place in actual cases are also discussed.Anticompetitive Behaviour, Exclusion, Below-Cost Pricing, Antitrust

Buyers’ miscoordination, entry, and downstream competition

This paper shows that buyers’ coordination failures might prevent entry in an industry with an incumbent firm and a more efficient potential entrant. If there was a single buyer, or if all buyers formed a central purchasing agency, coordination failures would be avoided and efficient entry would always occur. More generally, exclusion is the less likely the lower the number of buyers. For any given number of buyers, exclusion is the less likely the more fiercely buyers compete in the downstream market. First, intense competition may prevent miscoordination equilibria from arising; second, in cases where miscoordination equilibria still exist, it lowers the maximum price that the incumbent can sustain at such exclusionary equilibriaCountervailing Power; Exclusion; Buyers’ Fragmentation

Exclusive dealing, entry, and mergers

This paper studies a model where exclusive dealing (ED) can both promote investment and foreclose a more efficient supplier. While investment promotion is usually regarded as a pro-competitive effect of ED, our paper shows that it may be the very reason why a contract that forecloses a more efficient supplier is signed. Absent the effect on investment, the contract would not be signed and foreclosure would not be a concern. For this reason, considering potential foreclosure and investment promotion in isolation and then summing them up may not be a suitable approach to assess the net effect of ED. The paper therefore invites a more cautious attitude towards accepting possible investment promotion arguments as a defence for ED.

On the Anticompetitive Effect of Exclusive Dealing when Entry by Merger is Possible

We extend the literature on exclusive dealing, which assumes that entry can occur only by installing new capacity, by allowing the incumbent and the potential entrant to merge. This uncovers new effects. First, exclusive deals can be used to improve the incumbent's bargaining position in the merger negotiation. Second, the incumbent finds it easier to elicit the buyer's acceptance. Third, exclusive dealing, despite allowing the more efficient technology to find its way into the industry, reduces welfare because (i) it may trigger entry through merger whereas independent entry would be socially optimal, (ii) it leads to a sub-optimal contractual price when the exclusive dealing include a price commitment, (iii) it may deter entry altogether.Technology Transfer; Inefficient Entry; Antitrust; Authority's Behavior

Exclusive Dealing: The Interaction between Foreclosure and Investment Promotion

This paper studies a model where exclusive dealing (ED) can both promote investment and foreclose a more efficient supplier. While investment promotion is usually regarded as a pro-competitive effect of ED, our paper shows that it may be the very reason why a contract that forecloses a more efficient supplier is signed. Absent the effect on investment, the contract would not be signed and foreclosure would not be a concern. For this reason, considering potential foreclosure and investment promotion in isolation and then summing them up may not be a suitable approach to assess the net effect of ED. The paper therefore invites a more cautious attitude towards accepting possible investment promotion arguments as a defence for ED.Monopolization Practices, Vertical Agreements

Non visual effects of light: an overview and an Italian experience

Since the discovery of non-visual effect of light, consequences on human psychology and physiology have been investigated; however, effects on cognition of exposure to different spectral composition have been partially explored. Aim of this paper is an overview on researches developed in this field to compare general approaches and measurements protocols: the scarce knowledge of the physiological mechanisms, as well as the lack of shared methods, techniques, tools and procedures represent the weak point of this research. The impact of different procedures and experimental settings on results is shown, evidencing the need for scientifically consistent and internationally agreed procedures

The Deep-Pocket Effect of Internal Capital Markets

We provide evidence suggesting that incumbents’ access to group deep pockets has a negative impact on entry in product markets. Relying on a unique French data set on business groups, our paper presents three major findings. First, the amount of cash holdings owned by incumbent-affiliated groups is negatively related to entry in a market. Second, the impact on entry of group deep pockets is more important in markets where access to external funding is likely to be more difficult. Third, the ‘entry deterring effeect’ of group deep pockets is more pronounced when groups have more active internal capital markets. Our findings suggest that internal capital markets operate within corporate groups and that they have a potential anti-competitive effect.Business Groups, Internal Capital Markets, Deep-Pockets, Market Entry

Absences, traces et reliques dans les visions apocalyptiques de Pierre Michon et László Krasznahorkai

In the 80s, the literary paradigm and the search of meaning in the contemporary literature change. We are the witnesses, in the literary scene, of the subject return and of the anthropological need of narration. Through the narration of life stories, « fragmented » destinies, reinvented biographies, we can see the both intention of resurrecting the « marginalia », the traces forgotten by history, and at the same time of an apocalyptic vision of symbolic destruction of the Modernity