Restricted Access
Essays on imperfect competition
Loading...
Files
PDF in Restricted Access
License
Access Rights
Cadmus Permanent Link
Full-text via DOI
ISBN
ISSN
Issue Date
Type of Publication
Keyword(s)
LC Subject Heading
Other Topic(s)
EUI Research Cluster(s)
Initial version
Published version
Succeeding version
Preceding version
Published version part
Earlier different version
Initial format
Author(s)
Citation
Florence : European University Institute, 2011
EUI; ECO; PhD Thesis
Cite
CALCAGNO, Claudio A., Essays on imperfect competition, Florence : European University Institute, 2011, EUI, ECO, PhD Thesis - https://hdl.handle.net/1814/19422
Abstract
This thesis in applied microeconomics explores different aspects of imperfect competition. All three chapters are motivated by recent developments in real-world economies. First, I explore the implications of a recent reform by the European Commission whereby victims of antitrust injury can seek stand-alone private damages (SPDs) directly before courts. I show that any gain in deterrence has to be traded off against costly litigation and enforcement costs, and that these tradeoffs are heterogeneous across market sizes. SPDs can improve welfare only if the competition authority is sufficiently effective: private damages are a complement to (good) public enforcement, not a substitute. Finally, in the case of a resource-constrained competition authority, whilst a "hands-off" approach might have been warranted absent SPDs, this is no longer true once stand-alone actions are introduced. Second, I investigate under what conditions exclusion can arise under collective behaviour, in a setting with an efficient downstream entrant. Tacitly collusive equilibria can be sustained either by jointly excluding the entrant or through entry-accommodating strategies. The latter class of equilibria entails vertically integrated incumbents collusively extracting the rent deriving from the entry of a more efficient downstream competitor. I show that, for intermediate discount factors, whenever the entrant is not too much more efficient than the incumbents, the integrated firms find exclusionary collusive equilibria more profitable than entryaccommodating collusive equilibria. Moreover, exclusionary collusive equilibria arise as a (profitable) outcome when the entrant's cost is uncertain (and equilibrium tariffs will be such that only very efficient entrants will be allowed in). The retail petrol market (the object of recent antitrust scrutiny) is then analysed as a useful setting to apply my framework. Third, in a paper with Bertsch and Le Quement, we study some possible implications of the bailout regimes witnessed in the aftermath of the recent financial crisis. Notwithstanding the well-known effects of State aid on moral hazard, governments setting up aid schemes to ailing banks (or firms more generally) may increase the likelihood of (tacit) collusion in industries characterised by idiosyncratic shocks. In particular, we show that, in a repeated-game setting, a systematic bailout regime increases the expected profits from cooperation and simultaneously raises the probability that competitors will still be in business to carry out punishment against cheaters. This is detrimental for welfare for intermediate discount factors or (for any discount factor) whenever the direct rescue costs are too large.
Table of Contents
-- Stand-alone private antitrust damages : (how) should competition authorities react?
-- Collective exclusion
-- State aid and tacit collusion
Additional Information
Defence date: 19 September 2011
Examining board: Elena Carletti, Internal Supervisor Massimo Motta, External Supervisor, Universitat Pompeu Fabra; Thibaud Vergé, Chief Economist, Autorité de la Concurrence (French NCA); Paul Seabright, Université des Sciences Sociales de Toulouse
PDF of thesis uploaded from the Library digital archive of EUI PhD theses
Examining board: Elena Carletti, Internal Supervisor Massimo Motta, External Supervisor, Universitat Pompeu Fabra; Thibaud Vergé, Chief Economist, Autorité de la Concurrence (French NCA); Paul Seabright, Université des Sciences Sociales de Toulouse
PDF of thesis uploaded from the Library digital archive of EUI PhD theses