In a recent paper on “The Great Startup Sellout,” Bruno Pellegrino of Columbia University and a Stigler Center affiliate fellow, and Florian Ederer of Boston University, study how the changing life cycle of startups is affecting competition in the US economy. They conclude that the companies acquiring startups have become more and more insulated from competition.
In recent years, many Asian countries have received attention for their burgeoning economic development and innovation. Much of this development and innovation is driven by business groups, large and highly diversified networks of firms with common ownership (such as Samsung). Simon Commander and Saul Estrin argue in their new book that the role of business groups as catalysts for innovation is much more nuanced than the hype suggests.
The draft Merger Guidelines largely replace the consumer welfare standard of the Chicago School with the lessening of competition principle found in the 1914 Clayton Act. This shift would enable the Federal Trade Commission and Department of Justice Antitrust Division to utilize the full extent of modern economics to respond to rising concentration and its harmful effects, writes John Kwoka.
In new research, Cyril Hédoin and Alexandre Chirat use the rational-choice theory of economist Anthony Downs to explain how populism rationally arises to challenge established institutions of liberal democracy.
In a new paper, Bing Guo, Dennis C. Hutschenreiter, David Pérez-Castrillo, and Anna Toldrà-Simats study how large institutional investors impact firm innovation. The authors find that large institutional investors encourage internal research and development but discourage firm acquisitions that would add patents and knowledge to their firms’ portfolios, hampering overall innovation.
Joshua Gray and Cristian Santesteban argue that the Federal Trade Commission's focus in Meta-Within and Microsoft-Activision on narrow markets like VR fitness apps and consoles missed the boat on the real competition issue: the threat to future competition in nascent markets like VR platforms and cloud gaming.
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.
Meta has silenced news organizations’ social media accounts in response to Canada’s Online News Act, a law not yet in effect. Josh Braun describes the reasoning behind such legislation, its potential flaws, and how Meta, particularly Facebook, has turned the Canadian wildfire crisis into a regulatory pressure campaign.
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