News

The work and analyses produced by E.CA is widely recognised and discussed by renowned newspapers and broadcasters. Please scroll through the following list to explore recent coverage and relevant firm news.

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10.01.2013
Working paper published on upward pricing pressure (UPP) in two-sided markets.

Pauline Affeldt

E.CA staff member Pauline Affeldt published a working paper on upward pricing pressure (UPP) in two-sided markets jointly with Lapo Filistrucchi (Tilburg University) and Tobias Klein (Tilburg University). Upward pricing pressure indices have recently been proposed as screening devices for mergers in differentiated product industries. In this paper the one-sided UPP concept, originally presented by Farrell and Shapiro (2010), is extended to two-sided markets in which indirect network effects have to be taken into account. The derived formulas are then applied to a hypothetical merger in the Dutch daily newspaper market. The results indicate that taking the two-sidedness of the market correctly into account makes a difference when evaluating UPP.

View the abstract here.

10.01.2013
New publication on the Relevance of Efficiencies in Abuse of Dominance Cases

Hans W. Friederiszick, Linda Gratz

The European Commission’s policy on the relevance of efficiency considerations in abuse of dominance cases (Article 102 TFEU) has not been resolved satisfactorily. In an attempt to give guidance on this matter, we address the topic from two different angles: First, we review EC soft law provisions and recent decisions. Second, we explore – in the example of low price strategies – business practitioners’ views on the relevance of the pro and anti-competitive motives behind such strategies.

View the abstract here.

31.08.2012
Best Conference Paper Award for Thomas Hildebrand (E.CA Economics), Jörg Rocholl (ESMT) and Alexander Schulz (Deutsche Bundesbank)

Thomas Hildebrand

E.CA Economics staff member Thomas Hildebrand received a Best Conference Paper Award from the European Finance Association (EFA) at its annual meeting held in Copenhagen on August 15-18, 2012.
The paper "Flight to Where ? Evidence from Bank Investments During the Financial Crisis" was co-authored by Jörg Rocholl (President of ESMT European School of Management and Technology) and Alexander Schulz (Deutsche Bundesbank).
The prize is the highest distinction of the conference.

Download the ESMT press release in EN and DE.

31.08.2012
Article published on network effects in two sided markets

Thomas Hildebrand

E.CA Economics staff member Thomas Hildebrand published an article on the estimation of network effects in two-sided markets in Economics Letters, a leading Economics journal. The antitrust economics of two-sided markets differ substantially from those of classical one-sided markets. Therefore, the question whether a market is two-sided or not is crucial for choosing adequate competition policy measures. However, answering this question is difficult because it typically requires complex data. The paper proposes an alternative, so-called “semi-structural” approach that makes it possible to identify and quantify network effects in two-sided markets without data on prices and quantities and without using instrumental variable techniques. Instead, only data on equilibrium revenue and on demand and/or cost shifters is required.

View the abstract here.

15.06.2012
New publication on owner effect and sunk investments

Ulrich Soltész, Christopher Milde, Rainer Nitsche

In state aid law, capital injections into public undertakings play an important role. In many cases such measures are being classified as State aid. Until today, only little attention has been paid to the "owner effect", according to which an investor who is already a shareholder increases the value of his existing shareholding by the injection of fresh capital. This article - an interdisciplinary joint product of two economists and a lawyer - examines this question.

View the abstract on the Europäische Zeitschriften für wirtschaftsrecht Journal.

26.05.2012
Vertical coordination through renegotiation

Özlem Bedre-Defolie published an article in the International Journal of Industrial Organization 30(6): 553-563.

The paper analyses the strategic use of bilateral supply contracts in sequential negotiations between one manufacturer and two differentiated retailers.

The external abstract can be viewed here.

25.01.2012
New publication on competition law in regulated industries by E.CA staff

Rainer Nitsche, Lars Wiethaus

In recent years, competition authorities have applied general competition rules in regulated industries, in addition to or instead of the regulation there in force. This raises issues as the two sets of rules are not necessarily identical and the authorities in charge of applying them do not always pursue the same objectives. This article proposes criteria helping to distinguish cases in which competition law is likely to be a more or less useful complement to regulation. As for cases in which competition law may, in principle, be useful, the authors argue for an intervention that accounts for the objectives set by regulation.

Read the publication on the Journal of European Competition Law & Practice website

24.01.2012
Article on access regulation and investment in next generation telephone networks

Rainer Nitsche, Lars Wiethaus

E.CA Economics published an article on access regulation and investment in next generation telephone networks in a top tier IO journal. Based on mathematical computing, the paper compares how different regulatory settings affect the development of high speed fibre networks. It is found that a traditional access regime in which an incumbent has to grant entrants cost-based access to its network would discourage investments into new networks to the detriment of consumers. In contrast, joint network developments in which incumbents and entrants share the risk of deploying fibre networks, whose profitability is yet uncertain, are likely to stimulate investments to the benefit of consumers.

View the abstract on the International Journal of Industrial Organization

05.01.2012
E.CA staff publish on market definition in shopping centre industry

Lars-Hendrik Röller, Jakub Kałużny, Rainer Nitsche

In light of some recent decisions by national competition authorities in Europe, the paper published in European Competition Journal considers how the choice of methodology impacts the product market definition in the shopping centre industry. It argues that relying predominantly on existing industry classifications and product characteristics is likely to lead to market definitions that are excessively narrow because these methodologies disregard actual substitutability patterns. Defined markets will be too narrow also if the effects of externalities common in the industry are ignored. The paper advocates that market definition following the standard SSNIP test logic while taking industry features into account is the superior approach.

View the abstract on the European Competition Journal.

14.12.2011
Article published on recent trends in competition economics in Germany

Hans W. Friederiszick, Rainer Nitsche
E.CA contributed to the 2012 GCR Handbook of Competition Economics with a country section on Germany. The article provides an overview of the institutional setting and enforcement output in Germany. It identifies Germany as one of the preferred jurisdictions for private litigation action within Europe, and predicts – due to recent case law - a richer set of economic tools being brought to use in the estimation of damages in order to empirically assess the pass-on effect.
Download the article.

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