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Regulation

Why Have Uninsured Depositors Become De Facto Insured?

Due to a change in how the FDIC resolves failed banks, uninsured deposits have become de facto insured. Not only is this dangerous for risk in the banking system, it is not what Congress intends the FDIC to do, writes Michael Ohlrogge.

COMMENTARY

Antitrust and Competition

Merger Law Reaches Acquirer Incentives and Private Equity Strategies

Steven Salop

Steven C. Salop argues that Section 7 of the Clayton Act prohibits mergers in which the acquiring firm’s unilateral incentives and business strategy are likely to lessen market competition.

RESEARCH

Income Inequality

Uninhibited Campaign Donations Risks Creating Oligarchy

Valentino Larcinese, Alberto Parmigiani

In new research, Valentino Larcinese and Alberto Parmigiani find that the 1986 Reagan tax cuts led to greater campaign spending from wealthy individuals, who benefited the most from this policy. The authors argue that a very permissive system of political finance, combined with the erosion of tax progressivity, created the conditions for the mutual reinforcement of economic and political disparities. The result was an inequality spiral hardly compatible with democratic ideals.

A New Capitalisn’t Episode

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Antitrust and Competition

The Kroger-Albertsons Merger Will Not Help Grocery Competition

Claire Kelloway

Kroger and Albertsons say they need to merge to compete with Walmart. Claire Kelloway argues that what they really want is Walmart’s monopsony power, and permitting mergers on these grounds will only harm suppliers, workers, and consumers.

Research

Innovators Respond to Their Presidential Candidate Winning With More Innovation

Joseph Engelberg, Runjing Lu, William Mullins, Richard Townsend

Does an inventor’s political identity influence their productivity? In a new paper, Joseph Engelberg, Runjing Lu, William Mullins, and Richard Townsend examine the impacts of the 2008 and 2016 United States presidential elections on Democrat and Republican inventors, with a particular focus on the quantity and quality of patents after the country elects a new president.

Antitrust and Competition

Letter to the Editor: Former FTC and DOJ Chief Economists Urge Separation of Economic and Legal Analysis in Merger Guidelines

Letter to the Editor

Seventeen former chief economists of the Federal Trade Commission and the Department of Justice Antitrust Division urge current Agency heads to separate the legal and economic analysis in the draft Merger Guidelines to strengthen the role of the latter in merger review.

Antitrust and Competition

Why the Kroger-Albertsons Merger Is a Mess for Consumers

Christine P. Bartholomew

Grocers Kroger and Albertsons want to merge, which would make them the second biggest retail food chain and, according to them, enhance their ability to compete with Walmart and Costco and offer lower prices to consumers. Christine P. Bartholomew writes that the promises of more competition and lower prices for consumers are unlikely to manifest, and thus the Federal Trade Commission should block the deal.

Book Excerpts

After Neoliberalism

Martin Daunton

ProMarket writers

[Wall Street Journal]

READING LISTS

Health Care

Americans spend significantly more on health care than any other country. Why? Answers to this question range from hospital monopolies to perverse incentives to opaque pricing to medical licensing to pharmaceutical firms abusing IP practices to “creeping consolidation.” Why is the US health care system so broken? And what can antirust do about it? Catch-up on our coverage of antitrust and the US health care system.

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Commentary

We Need Better Research on the Relationship Between Market Power and Productivity in the Hospital Industry

David Ennis

Antitrust debates have largely ignored questions about the relationship between market power and productivity, and scholars have provided little guidance on the issue due to data limitations. However, data is plentiful on the hospital industry for both market power and operating costs and productivity, and researchers need to take advantage, writes David Ennis.

Book Excerpts

Lowering the Barriers to Entry for Economics Research in Healthcare

Filippo Lancieri

A new collection of scholarly work on the economics of the US healthcare sector is released today. The following is an adaptation...

Health Care

Rethinking How To Achieve Universal Health Care Coverage in the US

Katherine Baicker, Amitabh Chandra, Mark Shepard

Solutions to expanding heath care coverage in the U.S. are often incremental and focus on mitigating market failures. In new research, Katherine...

Antitrust and Competition

Antitrust Enforcement Is Not Enough to Address Anticompetitive Conduct in Pharmaceutical Markets. Market-Oriented Legal Reform is Needed.

Alden Abbott

Federal antitrust enforcement has been robust and effective in promoting prescription drug market competition and thereby enhancing consumer welfare. Antitrust enforcement in...

George J. Stigler, one of the most influential economists of the 20th century, won the Nobel Prize in Economic Sciences in 1982 “for his seminal studies of industrial structures, functioning of markets, and causes and effects of public regulation.” His research upended the idea that government regulation was effective at correcting private-market failures. Stigler introduced the idea of regulatory capture, in which regulators could be dominated by special interests. These regulators would work for the benefit of large, monied organizations rather than the public good. Catch up on ProMarket's coverage of his legacy.

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COLUMNS

Antitrust and Competition

Merger Guidelines: Taking on a Monopoly Crisis

Matt Stoller

Matt Stoller lays out the case for the new draft Merger Guidelines, arguing that they incorporate new lessons regarding technology and business practices, while also learning from past mistakes.

Commentary