We develop an empirical model of overlapping ownership conduct. The model (i) links firm conduct parameters to deep parameters of the firm’s process of shareholder preference aggregation through voting; (ii) can cope with ownership settings involving both intra- and inter-industry overlapping ownership; and (iii) yields an equilibrium flexible formulation for the management’s objective function that allows for no internalization, partial internalization and full internalization of shareholder objectives by managers. Using data for the U.S. airline industry in the 2015-2017 period, we find evidence for a partial internalization formulation in which managers put significant weight on shareholder objectives, but substantially less than in the full-internalization limiting case. We find also that inter-industry overlapping ownership is associated to lower inferred marginal costs, and that omitting inter-industry overlapping ownership leads to substantial bias towards zero in the parameters that drive how much intra-industry overlapping ownership is internalized by the firms. Finally, we find, focusing on the 2017Q4 period, that overlapping ownership overall (both intra- and inter-industry) seems to increase the average airline fare by 4.0%, increase industry profit by 24.4% and decrease consumer surplus by 1.8%, and that these effects are mostly due to overlapping ownership by shareholders other than the “Big Three” asset managers.

State ownership is increasingly being positioned by policymakers to accelerate sustainability transitions. This may create or strengthen dominant State-Owned Enterprises (SOEs), and SOEs have been flagged in the theoretical literature as being prone to abuse of dominance by means of exclusionary pricing (also referred to as ‘predatory pricing’). At the same time, the price level at which incumbent pricing (should) be considered exclusionary and unlawful remains subject to debate in both theoretical and experimental literatures. We design an experimental duopoly market with a dominant incumbent and a non-dominant entrant, where in 3 treatments we compare outcomes in a private market to outcomes in mixed markets, where the dominant firm is an SOE. We observe for exclusionary pricing below marginal cost, below break-even point, and above break-even point. We find strong evidence for exclusionary pricing in both private and mixed markets. This finding is remarkable given the professed rarity of exclusionary pricing in previous experimental research. Furthermore, we find both more and more severe exclusionary pricing in the treatments where the dominant incumbent is an SOE. We record the highest percentage of exclusionary pricing when the SOE is not fully profit driven but also concerned with social welfare. These findings suggest more elaborate monitoring of SOE’s competition law compliance is appropriate when creating or strengthening dominant SOEs.

Research into South African retail banking has often sought to assess the level of competition in banking markets without accounting for the degree of substitutability between banks. We use FinScope data and construct a unique dataset of bank prices, from publicly available marketing material, to estimate South African customer demand for personal transactional accounts (PTAs). This demand is estimated using a flexible choice model that measures bank substitutability between various paired banks. We find evidence of substitutability between the PTAs of the following bank pairs: (i) Capitec and FNB, as well as (ii) Capitec and Standard Bank. These results are particularly interesting when contrasted with the findings of a South African 2008 banking market inquiry which, at the time, noted that Capitec had not posed a competitive constraint on the traditional big four banks.

The debate about the implications of algorithms on competition law enforcement has so far focused on multi-firm conduct in general and collusion in particular. The implications of algorithms on abuse of dominance have been largely neglected. This article seeks to fill the gap in the existing literature by exploring how the increasingly precise practice of individualized targeting by algorithms can facilitate the practice of a range of abuses of dominance, including predatory pricing, rebates, and tying and bundling. The ability to target disparate groups of consumers with different prices helps a predator to minimize the losses it sustains during predation and maximize its ability to recoup its losses. This changes how recoupment should be understood and ascertained and may even undermine the rationale for requiring a proof of likelihood of recoupment under US antitrust law. This increased ability to price discriminate also enhances a dominant firm’s ability to offer exclusionary rebates. Finally, algorithms allow dominant firms to target their tying and bundling practices to loyal customers, hence avoiding the risk of alienating marginal customers with an unwelcome tie. This renders tying and bundling more feasible and effective for dominant firms.

In the majority of cartel research firms are regarded as collective entities and the formation and breakdown of cartels are typically explained by firms’ incentives and corresponding market conditions. While this approach has provided lots of valuable insights, it disregards one crucial aspect: In reality, cartels are not formed by firms, but by people who need to trust each other in order to overcome the inherent risks of participating in anti-competitive agreements. In our recent research “On the Sociology of Cartels” we address this topic by analysing 15 German cartels regarding the characteristics of individual members, their communication methods, the internal organisation and the eventual breakup. This research is complemented by an experimental paper that studies cooperation with negative externalities, as it is usually the case in cartels, focusing on the role of gender, information and various psychological traits. Our results indicate that homogeneity of participants plays a central role for cooperation and cartel formation which has practical implications for competition policy and policies aimed at diversity.

Zero-Rating agreements are those that provides users with access to mobile servicesand applications without charging for the data used. Even though it may seem as a welfare enhancing strategy for the consumer, the scheme also has its shortcomings. I argue that zero rating is a policy that presents both economic and non-economic harms, particularly in poorer countries that rely heavily on cellular data. By conducting a case study of Brazil, I point to the failings of zero-rating and its socioeconomic harms. I propose a concerted strategy to tackle the issue, addressing it through several governmental actions.

This paper presents a model where the managers of two firms decide about adopting a sustainable production technology (or product). It demonstrates under what conditions a firm experiences a first-mover disadvantage from going green, which may potentially be overcome by a sustainability agreement serving as a device for equilibrium selection in a coordination game with multiple equilibria. If the technology adoption game is, however, a prisoner’s dilemma, the sustainability agreement must be structured like a hardcore cartel.