Consumer Demand, Not Weak Competition, Explains Rise in Prices

In new research, Ricardo Marto finds that the rise of services in the United States explains the rise in firm markups over the last few decades rather than a lack of competition.

Driving Innovation with Antitrust

Giovanna Massarotto writes that antitrust actions against major technology companies like AT&T, IBM, and Microsoft over the past century, though imperfect, have positively impacted innovation and competition in the computer industry by restricting anticompetitive behavior while allowing breakthrough technologies to flourish through carefully crafted remedies. This stands in contrast with Europe, which has seen less homegrown innovation from its technology companies.

The Eight Features Defining Emergent Competition Policy for the Digital Era

Drawing on new research, Oles Andriychuk identifies eight defining features of the European Union’s and United Kingdom’s new laws to regulate competition in digital markets that transform how we understand competition policy.

First Evidence on the Use of Training Repayment Agreements in the US Labor Force

Similar to noncompete clauses in employment contracts, training repayment agreements, which require employees to pay back their employers for firm-sponsored training if they quit early, can impede worker mobility and reduce competition in labor markets. The authors document the pervasiveness and characteristics of these provisions and suggest directions for future research.

The FTC’s Proposed Ban on Noncompetes Could Raise Wages by Four Percent

Nearly one in five American workers are affected by noncompete agreements, which prevent workers from working for or creating a rival firm. In new research, Axel Gottfries and Gregor Jarosch estimate that the Federal Trade Commission’s proposed noncompete ban could raise wages by 4%.

Rent-Seeking Alone Does Not Explain Why Wealthy Families Run for Office

From the Kennedy family to Chile's Matte family, powerful and wealthy families often seek political office. New research by Patricio Duran, Marcelo Ortiz, and Michael Carney seek to understand what those politically active families have in common and discuss potential motivations.

Management Studies Offers Antitrust a More Sophisticated Picture of Firm Behavior

Neoclassical economics, which places the rational and well-informed actor maximizing utility at its foundation, underpins the dominant schools of thought on firm behavior in antitrust. Although neoclassical economics assumes that firms maximize profit, it has little to say on the actual decision-making processes within firms that drive firm conduct. In part, this is because neoclassical economists view the firm as a “black box,” whose decision-making behavior is too idiosyncratic or obscure to link to output and performance. At the same time, neoclassical assumptions about firm rationality and profit maximization mean that whatever these idiosyncratic behaviors of the individual firm may be, they are designed to maximize profit and returns to owners. Thus, firm decisions can be presumed to be rational.

Tax Audits Deter Tax Avoidance But Not Without Costs to Firm Performance and Local Economies

In new research, Ga-Young Choi and Alex Kim show that tax audits work to deter firm tax avoidance, but with unintended costs for investment and employment for the firm and the broader economy.

Do Corporate Mergers and Acquisitions Hurt Workers?

Competition authorities and analysts are increasingly focused on the impact of mergers and acquisitions on worker welfare. Using a novel dataset on Canadian firms and workers, David Arnold, Kevin Milligan, Terry S. Moon and Amirhossein Tavakoli test the empirical validity of several theories on how M&A may help or harm workers.

How Post-WWII Inflation Benefited Republican Presidential Candidates

American households accumulated a large stock of savings during World War II, much of which was held in the form of war bonds. After the war, inflationary episodes eroded the purchasing power of these bonds, contributing to a backlash against the incumbent Democrats. In new research, Gillian Brunet, Eric Hilt, and Matthew S. Jaremski study the impact of post-WWII inflation on voting outcomes using data on the sales of savings bonds during the war.

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