The Role of the State

The effectiveness of tax policy depends on whether sellers pass on changes in tax rates to consumers through changes in price. In new research, Felix Montag, Robin Mamrak, Alina Sagimuldina, and Monika Schnitzer investigate how this tax pass-through in turn depends on how much consumers know about prices. They show that if consumers are not aware of how prices for the same product vary between sellers, then they will be unaffected by tax changes intended to increase or decrease consumption.

New research by Vesa Pursiainen, Hanwen Sun and Yue Xiang finds that competition hurts corporate incentives to fulfill environmental, social, and governance (ESG) goals. Firms facing more competitive pressure have worse ESG scores, in particular when the firms have short-term-oriented shareholders. However, firms located in areas that are more concerned about climate change appear more willing to sacrifice profits for better ESG performance.

In the 1990s, a host of antitrust rules impacting the television industry were repealed. Today’s streaming giants are exploiting the rollback and vertically integrating, a trend that will reduce the quality of TV shows and send us back to the era of network giants.

In late September, the United States Federal Trade Commission sued Amazon for using a set of anticompetitive strategies to maintain its monopoly in the online retail market. ProMarket asked four antitrust experts —two economists and two law professors —to discuss the foundations and strength of the complaint’s arguments, the history of similar cases, and the potential for a legal remedy.

William Megginson, Kedi Wang, and Junjie Xia find in new research that the Chinese Communist Party’s anti-corruption campaign produced worse firm performance by reducing managers’ risk tolerance.

Zephyr Teachout provides her Round-Two comments on the draft Merger Guidelines.

The Chinese Communist Party drastically reduced Hong Kong’s autonomy in 2020 with a national security law and has cracked down on resistance ever since. The consequences have left its people culturally and economically poorer, writes Casey Moser.

In light of the rise of generative artificial intelligence (AI) and recent debates about the socio-political implications of large-language models and chatbots, Manuel Wörsdörfer analyzes the strengths and weaknesses of the European Union’s Artificial Intelligence Act (AIA), the world’s first comprehensive attempt by a government body to address and mitigate the potential negative impacts of AI technologies. He recommends areas where the AIA could be improved.

Erin Carroll writes that the lack of public access to the Google search antitrust trial has resulted in unprecedented secrecy which, she writes, could undermine the public’s trust in the outcome and start a dangerous trend amongst other Big Tech companies facing similar trials. 

Nicolas Petit and Lazar Radic refute common critiques of the consumer welfare standard. A second article will discuss the advantages and disadvantages of different antitrust standards, underscoring some points often ignored by the critics of the consumer welfare standard.