Capacity constraints and irreversible investments: defending against collective dominance in UPM Kymmene/Norske Skog/Haindl.

Scrutiny of potential mergers by the European Commission often focuses on unilateral effects or single firm dominance. But some cases have involved concerns over coordinated effects: the concern that the merger could increase the likelihood of consumer harm through tacit collusion by the reduced number of firms in the industry (this is known as collective dominance). The economic and legal issues are far less certain in these cases and a particular challenge is how to bring empirical evidence to bear on the decision. In this chapter we examine a case in newsprint and magazine paper - UPM Kymmene/Norske Skog/Haindl . Here, coordinated effects were at the centre of the Commission’s concerns. We discuss how collusion theory and evidence were used to help clear the merger without remedies in the final Decision.

Leveraging Monopoly Power by Degrading Interoperability: Theory and Evidence from Computer Markets

When will a monopolist have incentives to foreclose a complementary market by degrading compatibility/interoperability of his products with those of rivals? We develop a framework where leveraging extracts more rents from the monopoly market by "restoring" second degree price discrimination. In a random coefficient model with complements we derive a policy test for when incentives to reduce rival quality will hold. Our application is to Microsoft's strategic incentives to leverage market power from personal computer to server operating systems. We estimate a structural random coefficients demand system which allows for complements (PCs and servers). Our estimates suggest that there were incentives to reduce interoperability which were particularly strong at the turn of the 21st Century.Foreclosure, anti-trust, demand estimation, interoperability

Communication, Renegotiation, and the Scope for Collusion

We study the effect of communication in an experimental game where cooperation is consistent with equilibrium play if players share an understanding that cheating will be punished. Consistent with communication acting as a coordinating device, credible preplay threats to punish cheating are the most effective message to facilitate collusion. Promises to collude also improve cooperation. Credible threats do not occur in a treatment with a limited message space that permits threats of punishment. Contrary to some theoretical predictions, renegotiation possibilities facilitate collusion

Oligocene emplacement of the Eclogite Zone of the central Tauern Window, Eastern Alps, Austria

The EZ is an approximately 20km long and 2–3km wide coherent unit of the Tauern Window in the Eastern Alps. It is sandwiched between the Venedigerand the Glockner Nappe. While rocks in the EZ experienced HP metamorphic conditions (24 kbar/650°C), rocks from the underlying Venediger Nappe and the overlying Glockner Nappe only record lower alpine metamorphic conditions with peak pressures not exceeding 10 and 8 kbar, respectively. While metamorphism in the EZ is well dated with an average age of 31.5±0.7Ma (Glodny et al. 2005) the final emplacement of these different nappes is still under debate. Our Rb-Sr-data indicate that top-N thrusting at the base and large-scale folding of the EZ was coeval with sinistral strike-slip faulting at its upper boundary and eclogite-facies metamorphism in the EZ. The data also indicate that today’s nappe architecture must have been established in less than 2Ma after the eclogite facies metamorphism in the EZ. Very fast exhumation of the EZ was accomplished in a transpressional setting, which might explain why the exposed EZ is such a small unit.conferenc

Instalment options: a closed-form solution and the limiting case

In Foreign Exchange Markets Compound options (options on options) are traded frequently. Instalment options generalize the concept of Compound options as they allow the holder to prolong a Vanilla Call or Put option by paying instalments of a discrete payment plan. We derive a closed-form solution to the value of such an option in the Black-Scholes model and prove that the limiting case of an Instalment option with a continuous payment plan is equivalent to a portfolio consisting of a European Vanilla option and an American Put on this Vanilla option with a time-dependent strike. --exotic options

FRaMED: Full-Fledge Role Modeling Editor (Tool Demo)

Since the year 1977, role modeling has been continuously investigated as promising paradigm to model complex, dynamic systems. However, this research had almost no influence on the design of todays increasingly complex and context-sensitive software systems. The reason for that is twofold. First, most modeling languages focused either on the behavioral, relational or context-dependent nature of roles rather than combining them. Second, there is a lack of tool support for the design, validation, and generation of role-based software systems. In particular, there exists no graphical role modeling editor supporting the three natures as well as the various proposed constraints. To overcome this deficiency, we introduce the Full-fledged Role Modeling Editor (FRaMED), a graphical modeling editor embracing all natures of roles and modeling constraints featuring generators for a formal representation and source code of a rolebased programming language. To show its applicability for the development of role-based software systems, an example from the banking domain is employed

Leveraging Monopoly Power by Degrading Interoperability: Theory and Evidence from Computer Markets

When will a monopolist have incentives to leverage her/his market power in a primary market to foreclose competition in a complementary market by degrading compatibility/interoperability of her/his products with those of her/his rivals? We develop a framework where leveraging extracts more rents from the monopoly market by ‘restoring’ second‐degree price discrimination. In a random coefficient model with complements, we derive a policy test for when incentives to reduce rival quality will hold. Our application is to Microsoft's alleged strategic incentives to leverage market power from personal computer to server operating systems. We estimate a structural random coefficients demand system that allows for complements (personal computers and servers). Our estimates suggest that there were incentives to reduce interoperability that were particularly strong at the turn of the 21st century

Leveraging monopoly power by degrading interoperability: theory and evidence from computer markets

When will a monopolist have incentives to leverage his market power in a primary market to foreclose competition in a complementary market by degrading compatibility/interoperability of his products with those of her rivals? We develop a framework where leveraging extracts more rents from the monopoly market by .restoring. second degree price discrimination. In a random coefficient model with complements we derive a policy test for when incentives to reduce rival quality will hold. Our application is to Microsoft’s alleged strategic incentives to leverage market power from personal computer to server operating systems. We estimate a structural random coefficients demand system which allows for complements (PCs and servers). Our estimates suggest that there were incentives to reduce interoperability which were particularly strong at the turn of the 21st Century

Leveraging Monopoly Power by Degrading Interoperability: Theory and Evidence from Computer Markets

When will a monopolist have incentives to foreclose a complementary market by degrading compatibility/interoperability of his products with those of rivals? We develop a framework where leveraging extracts more rents from the monopoly market by “restoring” second degree price discrimination. In a random coefficient model with complements we derive a policy test for when incentives to reduce rival quality will hold. Our application is to Microsoft’s strategic incentives to leverage market power from personal computer to server operating systems. We estimate a structural random coefficients demand system which allows for complements (PCs and servers). Our estimates suggest that there were incentives to reduce interoperability which were particularly strong at the turn of the 21st Century.