756 research outputs found
The Competitive Effects of Resale Price Maintenance
The competitive effects of resale price maintenance (RPM) are theoretically diverse. RPM can cause allocation distortions or promote productive efficiencies in the distribution process. Moreover, extant cross-sectional empirical evidence is incapable of distinguishing among the potentially disparate effects of RPM. This paper conducts hypothesis tests of the alternative theories of RPM. The empirical framework relates estimates of the effects of RPM for a cross-section of observations to necessary conditions of the alternative models. This analysis indicates that RPM is used both to foster cartels and promote efficiencies in the distribution process. This result is consistent with the growing body of case study analysis that suggests that RPM is used for a variety of reasons. This result also questions the current per se illegal status of RPM in the antitrust laws. Evidence is also provided concerning the strategic interaction between manufacturers and dealers in the distribution process and the use of financial data in analyzing propositions in industrial organization
Collective Decision-Making and Standing Committees: An Informational Rationale for Restrictive Amendment Procedures
[No abstract
Rules, Subjurisdictional Choice, and Congressional Outcomes: An Event Study of Energy Taxation Legislation
Formal models in political science are increasingly attentive to institutional features that ostensibly play a crucial part in shaping political outcomes. Propositions yielded by these models have proven difficult to test, however. This study has two aims. Its substantive objective is to extend the spatial model of legislatures to illuminate the mechanisms of influence by committees on congressional outcomes. A broader methodological purpose is to introduce to political science a new and promising technique for testing formal models. Event studies are based on the belief that many political outcomes affect the economic welfare of nongovernmental actors and that, accordingly, actors with a vested interest in public policies respond rationally to changing political expectations. The technique is illustrated by testing formally derived propositions about the effects of rules and of subjurisdictional choice (the Ways and Means Committee's decision about the dimensions of its jurisdiction in which to propose legislation) on Congress's 1974 decision regarding taxation of oil and gas firms. The strong empirical results not only support the theory but also offer promising implications for continued development and testing of formal models of politics and political economy
The Competitive Effects of Resale Price Maintenance
The competitive effects of resale price maintenance (RPM) are theoretically diverse. RPM can cause allocation distortions or promote productive efficiencies in the distribution process. Moreover, extant cross-sectional empirical evidence is incapable of distinguishing among the potentially disparate effects of RPM. This paper conducts hypothesis tests of the alternative theories of RPM. The empirical framework relates estimates of the effects of RPM for a cross-section of observations to necessary conditions of the alternative models. This analysis indicates that RPM is used both to foster cartels and promote efficiencies in the distribution process. This result is consistent with the growing body of case study analysis that suggests that RPM is used for a variety of reasons. This result also questions the current per se illegal status of RPM in the antitrust laws. Evidence is also provided concerning the strategic interaction between manufacturers and dealers in the distribution process and the use of financial data in analyzing propositions in industrial organization
The Economic Incidence of the Interstate Commerce Act of 1887: A Theoretical and Empirical Analysis of the Short-haul Pricing Constraint
The public and private interest hypotheses permeate contemporary regulatory analyses. Both theories are used to explain the inception of the first major federal regulatory agency, the Interstate Commerce Commission (ICC). According to the public and private interest hypotheses, the regulations promulgated by the ICC benefited either railroads or shippers. This paper presents an alternative view consistent with the multiple interest theory of regulation. It is demonstrated that the major regulatory instrument of the ICC, the short-haul pricing constraint (SHPC), altered the equilibria of railroad markets in a way which benefitted the class of shippers (short-haul shippers) facing monopolistic railroad markets. The SHPC also benefitted some railroads by increasing the correspondence between unregulated, cooperative and regulated, noncooperative levels of long-haul shipments. The proposition that the ICC benefited short-haul shippers and railroads is supported by an empirical analysis of the effects of the inception of federal regulation and implementation of the SHPC on stock prices. The results of the paper indicate that the public and private interest interpretations of the ICC are neither contradictory nor complete, but instead are complementary. A theoretical and empirical analysis of the chief regulatory mechanism of the ICC provides this synthesis
Regulation and the Theory of Legislative Choice: The Interstate Commerce Act of 1887
This article concerns the economic incidence of the Interstate Commerce Act of 1887 (ICA). Our focus is the short-haul pricing constraint, a provision of the ICA that prohibited railroads from charging higher rates to isolated, primarily agrarian shippers than it charged to intercity shippers of similar commodities. Utilizing the event study methodology, we find that the impending passage of the ICA generated a distribution of abnormal returns to railroads and shipping firms that is consistent with the theoretical implications of our analysis of the short- haul pricing constraint (SHPC). However, early interpretations of the SHPC by the Interstate Commerce Commission reduced some of the abnormal returns to railroads in a manner that is inconsistent with the hypothesis that the short-haul pricing constraint was an important mechanism of early railroad regulation. The analysis does support a multiple-interest interpretation of the Interstate Commerce Act and has implications for the positive theory of regulation
Regulation and the theory of legislative choice: The Interstate Commerce Act of 1887
The economic effects of federal regulation cannot be explained from congressional institutions. Two factors determine the specific pattern. The first is how interests are represented in the Congress, especially in the relevant committees. Committees matter because their members can veto proposals made by others. The second factor is bicameralism. The need to build majority support in two chambers matters when interest groups are not distributed identically across both houses. Specific interests win in the legislative process because of their representation within the political institutions.
We examine the first major regulatory agency, the Interstate Commerce Commission (ICC), founded in 1887. The inception of the ICC was not solely a cartel mechanism for the railroads (as the pure capture view
asserts) nor solely a mechanism to correct market abuses by the railroads (as the public interest theory maintains). The ICC provided an benefits, some to railroads and some to nonrailroad interests, notably shorthaul shippers
Collective Decision-Making and Standing Committees: An Informational Rationale for Restrictive Amendment Procedures
[No abstract
Rules, Subjurisdictional Choice, and Congressional Outcomes: An Event Study of Energy Taxation Legislation
Formal models in political science are increasingly attentive to institutional features that ostensibly play a crucial part in shaping political outcomes. Propositions yielded by these models have proven difficult to test, however. This study has two aims. Its substantive objective is to extend the spatial model of legislatures to illuminate the mechanisms of influence by committees on congressional outcomes. A broader methodological purpose is to introduce to political science a new and promising technique for testing formal models. Event studies are based on the belief that many political outcomes affect the economic welfare of nongovernmental actors and that, accordingly, actors with a vested interest in public policies respond rationally to changing political expectations. The technique is illustrated by testing formally derived propositions about the effects of rules and of subjurisdictional choice (the Ways and Means Committee's decision about the dimensions of its jurisdiction in which to propose legislation) on Congress's 1974 decision regarding taxation of oil and gas firms. The strong empirical results not only support the theory but also offer promising implications for continued development and testing of formal models of politics and political economy
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