Sui Generis\u27?: An Antitrust Analysis of Buyer Power in the United States and European Union

The argument of this paper is simple: from an economic policy point of view, there is nothing special about market power on the buyer side of markets. In particular, we reject the contention that retail sector buying power requires different treatment from antitrust authorities compared to other sectors in the economy. Likewise, we find arguments contending that ‘buyer power’ requires that new or different laws be enacted or judicially developed ultimately unpersuasive. This paper is divided into three parts. Part I summarizes the relevant economics of buyer power, and more generally, monopsony. Part II compares the relevant antitrust treatment, in the U.S. and Europe, with respect to buyer power and competition policy. Part III applies our legal and economic insights to supermarket competition

Spousal guarantees

Lenders often require of small investors that they sign a personal guarantee before forwarding funds, and if the borrowers own funds or assets are insfficient backing for a guarantee, then a third party may be asked to sign. Since strangers do not guarantee each others debts, it is in the nature of such guarantees that they straddle the private and business worlds within any relationship. Important relationship assets (such as the family home) are often at stake, and courts struggle with the policy tradeoffs inherent in such deeds or contracts between freedom of contract and a concern with the potential for coercion of the one signing. This paper explores the nature of the optimal third party guarantee within the incomplete contracting environment inaugurated by Grossman and Hart (1986). The optimal contract trades off the ex post amount of relationship asset to be foreclosed by a bank against the desirability of ensuring the ex ante release of funds to promote the exploitation of viable investment opportunities. The role of ex post bargaining power, as a proxy for coercion is examined and it is found that for certain parameter values in the model increased coercion, while freeing more funds ex ante, simultaneously lowers social welfare

Deal or no deal, that is the question: The impact of increasing stakes and framing effects on decision-making under risk

In this paper, we utilize data from the Australian version of the TV game show, ‘Deal or No Deal’, to explore risk aversion in a high real stakes setting. An attractive feature of this version of the game is that supplementary rounds may occur which switch the decision frame of players. There are four main findings. First, we observe that the degree of risk aversion generally increases with stakes. Second, we observe considerable heterogeneity in people's willingness to bear risk – even at very high stakes. Third, we find that age and gender are statistically significant determinants of risk aversion, while wealth is not. Fourth, we find that the reversal of framing does have a significant impact on people's willingness to bear risk

Does risk aversion vary with decision-frame? : an empirical test using recent game show data

An aspect of prospect theory posits that decision-makers, when making decisions in the face of risk, make their decisions with respect to a pre-existing reference point or ’frame’ (the status-quo bias). We utilize data from the Australian version of the TV game show, Deal or No Deal, to explore whether risk aversion varies with a change in reference point in a context where stakes are real and high. We achieve this by exploiting a special and unique Australian feature of the Deal or No Deal lottery-choice setting, namely, the existence of the Chance or the SuperCase rounds (supplementary rounds). These rounds reverse the decision-frame that was obtained in earlier (normal) rounds. We fit and estimate a complete dynamic decision-making model to our dataset and find that the risk aversion estimate of contestants who participated in both the normal and the supplementary rounds indeed differs depending on the nature of the round, a result consistent with the operation of the existence of a framing effect

Data from: Limited oxygen availability in utero may constrain the evolution of live-birth in reptiles

Although viviparity (live birth) has evolved from oviparity (egg laying) at least 140 times in vertebrates, nearly 120 of these independent events occurred within a single reptile taxon. Surprisingly, only squamate reptiles (lizards and snakes) are capable of facilitating embryonic development to increasingly advanced stages inside the mother during extended periods of oviducal egg retention. Viviparity has never evolved in turtle lineages, presumably because embryos enter and remain in an arrested state until after eggs are laid, regardless of the duration of egg retention. Until now, the limiting factor that initiates and maintains developmental arrest has remained elusive. Here, we show that oviducal hypoxia arrests embryonic development. We demonstrate that hypoxia can maintain developmental arrest after oviposition and that subsequent exposure of arrested embryos to normoxia triggers resumption of their development. We discovered remarkably low oxygen partial pressure in the oviducts of gravid turtles and found that secretions produced by the oviduct retard oxygen diffusion. Our results suggest that an extremely hypoxic environment in the oviduct arrests embryonic development and may constrain the evolution of viviparity in turtles, with the reduced diffusive capacity of oviducal secretions possibly creating or contributing to this hypoxia. We anticipate that these findings will allow us to better understand the mechanisms underlying the evolutionary transition between reproductive modes

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