Ghosal, Vivek (2007): Regime Shift in Antitrust.
Download (350Kb) | Preview
This paper empirically models the longer-run deep-seated shift in intellectual thinking that followed the Chicago School’s criticism of the older antitrust doctrine, the shorter-run driving forces related to switches of the political party in power, merger waves, changes in economic activity and the level of funding and quantifies their impact on enforcement by the Antitrust Division of the U.S. Department of Justice over the period 1958-2002. The key findings are: (1) a distinct regime-shift in antitrust enforcement during the 1970s and, post-regime-shift, there has been a marked compositional change with a quantitatively large increase (decrease) in criminal (civil) antitrust court cases initiated; (2) post-regime-shift, there appears to be a change in the role played by politics with Republicans initiating more (less) criminal (civil) court cases than Democrats and the estimated quantitative effects are large; (3) disaggregating the total number of court cases into the main categories under which they are initiated (price-fixing, mergers, monopolization and restraints-of-trade) shows that individual types of cases have widely differing responses to changes in the driving forces; and (4) in a horse-race between the regime-shift and political effect on one side and the remaining variables on the other, the former forces win hands-down in explaining broad shifts in enforcement. Modeling the longer-run shift and disaggregating the court cases emerge as crucial to gaining insights into the intertemporal shifts in enforcement. The paper elaborates on the causes for the shift in enforcement and on the effectiveness of antitrust.
|Item Type:||MPRA Paper|
|Original Title:||Regime Shift in Antitrust|
|Keywords:||Antitrust enforcement; regime-shift; politics; supreme court; effectiveness|
|Subjects:||L - Industrial Organization > L4 - Antitrust Issues and Policies > L40 - General
B - History of Economic Thought, Methodology, and Heterodox Approaches > B0 - General > B00 - General
K - Law and Economics > K0 - General > K00 - General
M - Business Administration and Business Economics; Marketing; Accounting > M2 - Business Economics > M20 - General
|Depositing User:||Vivek Ghosal|
|Date Deposited:||27. Oct 2007|
|Last Modified:||13. Feb 2013 13:25|
Andrews, D. “Tests for Parameter Stability and Structural Change with Unknown Change Point,” Econometrica 61, 1993, 821-856.
Amacher, R., Higgins, Shughart, W., Tollison, R. “The Behavior of Regulatory Activity Over the Business Cycle: An Empirical Test.” Economic Inquiry 23, 1985, 7-19.
Bannerjee, A., Lumsdaine, R., Stock, J. “Recursive and Sequential Tests of the Unit Root and Trend Break Hypotheses,” Journal of Business and Economic Statistics 10, 1992, 271-287.
Baker, J. “Identifying Cartel Policing under Uncertainty: The U.S. Steel Industry, 1933-1939.” Journal of Law and Economics 32, 1989, S47-76.
Baker, J. “The Case for Antitrust Enforcement,” Journal of Economic Perspectives 17, 2003, 27-50.
Baker, J. “A Preface to Post-Chicago Antitrust,” in R. van den Bergh, R. Pardolesi and A. Cucinotta (eds.), Post-Chicago Developments in Antitrust Analysis. Edward Elgar, 2002.
Basu, S. “Procyclical Productivity: Increasing Returns or Cyclical Utilization?” Quarterly Journal of Economics 111, 1996, 719-751.
Bergman, M., Jakobsson, M., Razo, C. “An Econometric Analysis of European Commission’s Merger Decisions,” Working Paper, Swedish Competition Authority, 2003.
Blair, R., Kaserman, D. Antitrust Economics. Richard Irwin, 1985.
Bork, R.H. “Legislative Intent and the Policy of the Sherman Act,” Journal of Law and Economics 9, 1966, 7-48.
Bork, R.H. The Antitrust Paradox. New York: Basic Books, 1978.
Carree, M., Ghosal, V., Schinkel, M.P. “U.S. and E.U. Antitrust Law Enforcement: A Comparison.” University of Amsterdam, 2005.
Cartwright, P., Kamerschen, D. “Variations in Antitrust Activity.” Review of Industrial Organization 2, 1985, 1-24.
Cassidy, B. “Can Australian and US Competition Policies be Harmonized?” Speech, Australian Competition and Consumer Commission, 2001.
Crandall, W., Winston, C. “Does Antitrust Policy Improve Consumer Welfare? Assessing the Evidence,” Journal of Economic Perspectives 17, 2003, 3-26.
Coate, M., Higgins, R., McChesney, F. “Bureaucracy and Politics in FTC Merger Challenges.” Journal of Law and Economics 33, 1990, 463-82.
Demsetz, H. “Two Systems of Belief about Monopoly,” in Industrial Concentration: New Learning, Goldschmidt, H., Mann, H.M., Weston, J.F. (eds.), 1974.
Demsetz, H. “Industry Structure, Market Rivalry and Public Policy,” Journal of Law and Economics 16, 1973, 1-9.
Dick, A. “When Are Cartels Stable Contracts?” Journal of Law and Economics 39, 241-83, 1996.
Director, A. “United States v. United Show Machinery Corporation: An Economic Analysis of an Antitrust Case,” The University of Chicago Law Review 24, 1957, 606-611.
Director, A., Levi, E. “Law and the Future: Trade regulation,” Northwestern University Law Review, 1956, 281-256.
Duso, T., Damien, N., Röller, L-H. “The Political Economy of European Merger Control: Evidence Using Stock Market data,” CEPR Discussion Paper No. 3880, 2003.
Eekhoff, J. (Ed.). Competition Policy in Europe. Springer, 2004.
Enders, W. Applied Econometric Time Series. New York: John Wiley, 1995.
Faith, R., Leavens, D., Tollison, R. “Antitrust Pork Barrel.” Journal of Law and Economics 25, 1982, 329-42.
Faure-Grimaud, A., Martimort, D. “Regulatory Inertia,” RAND Journal of Economics 34, 2003, 413-437.
Ghosal, V. “Potential Foreign Competition in U.S. Manufacturing,” International Journal of Industrial Organization 20, 2002, 1461-1489.
Ghosal, V. “Dynamic Interrelationships in the Process of Criminal Antitrust Investigations,” Georgia Institute of Technology, 2005.
Ghosal, V., Gallo, J. “The Cyclical Behavior of the Department of Justice’s Antitrust Enforcement,” International Journal of Industrial Organization, 2001, 27-54.
Gould, J. “Adjustment Costs in the Theory of Investment of the Firm,” Review of Economic Studies 35, 1968, 47-55.
Griffin, J. “The Modern Leniency Program After Ten years: A Summary Overview of the Antitrust Divisions Criminal Enforcement Program,” U.S. Department of Justice, 2003.
Harding, C., Joshua, J. Regulating Cartels in Europe: A Study of Legal Control of Corporate Delinquency. Cambridge: Oxford University Press, 2004.
Harrington, J. “Antitrust Enforcement,” in The New Palgrave: Dictionary of Economics (2nd edition.), L. Blume and S. Durlauf (Eds.). Macmillan Press, 2006 (forthcoming).
Homma, T. “Japan Fair Trading Commission’s Grand Design for Competition Policy in the 21st Century,” Commissioner’s Speech, 2002.
Hunton and Williams, LLP. “Bigger Stick, Bigger Carrot,” Competition and International Trade Advisories, 2003.
Jovanovic, B., Rousseau, P. “Mergers and Technological Change: 1885-1998,” Working paper, University of Chicago, 2001.
Kennan, J. “The Estimation of Partial Adjustment Models under Rational Expectations,” Econometrica 47, 1979, 1441-1455.
Kobayashi, B. “Antitrust, Agency and Amnesty: An Economic Analysis of the Criminal Enforcement of the Antitrust Laws Against Corporations,” George Washington Law Review 69, 2001, 715-44.
Kolasky, W. “Antitrust Compliance Programs,” U.S. Department of Justice, 2002.
Kovacic, W., Shapiro, C. “A Century of Antitrust and Legal Thinking,” Journal of Economic Perspectives 14, 2000, 43-60.
Lande, R.H. “Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged,” Hastings Law Journal 34, 1982, 61-151.
Levenstein, M., Suslow, V. “Studies of Cartel Stability,” in P. Grossman (Ed.), How Cartels Endure and How they Fail. Edward Elgar, 2004, 9-52.
Lewis-Beck, M. “Maintaining Economic Competition: The Consequences and Causes of Antitrust.” Journal of Politics 41, 1979, 169-191.
Long, W., Schramm, R., Tollison, R. “The Economic Determinants of Antitrust Activity.” Journal of Law and Economics 16, 1973, 351-64.
McGee, J.S. “Predatory Price Cutting: The Standard Oil Case,” Journal of Law and Economics 1, 137-168, 1958.
Motta, M. Competition Policy. Cambridge University Press, 2004.
Newey, W., West, K. “A Simple Positive-Definite Heteroscedasticity and Autocorrelation Consistent Covariance matrix,” Econometrica 55, 1987, 703-708.
Organization for Economic Cooperation and Development. “Regulatory Reform in Japan: The Role of Competition Policy in Regulatory reform,” 1999.
Pate, H. “Antitrust Law in the U.S. Supreme Court,” Speech, U.S. Department of Justice, 2004.
Paul, R. “International Cartels in Crosshairs: Aggressive Enforcement Activity Presents Serious Risks for Corporations, Individuals,” New York Law Journal, 2000
Peltzman, S. “Toward a More General Theory of Regulation.” Journal of Law and Economics 19, 1976, 211-40.
Pittman, R. “Antitrust and the Political Process,” in D. Audretsch and J. Siegfried (eds.), Empirical Studies in Industrial Organization: Essays in Honor of Leonard Weiss, Amsterdam: Kluwer, 1992.
Posner, R.A. “Oligopoly and the Antitrust Laws: A Suggested Approach,” Stanford Law Review 21, 1969, 1562-1606.
Posner, R.A. “Exclusionary Practices and the Antitrust Laws,” University of Chicago Law Review 41, 1974, 506-535.
Posner, R.A. Antitrust Law: An Economic Perspective. Chicago: University of Chicago Press, 1976.
Posner, R.A. “A Statistical Study of Antitrust Enforcement.” Journal of Law and Economics 13, 1970, 365-419.
Richardson, J.D., Graham, E.M. (Eds.). Global Competition Policy. Institute for International Economics, 1997.
Shapiro, M. “Macroeconomic Implications of Variation in the Workweek of Capital,” Brookings Papers on Economic Activity 2, 1996, 79-133.
Shy, O. Industrial Organization. Cambridge: MIT Press, 1995.
Siegfried, J. “The Determinants of Antitrust Activity.” Journal of Law and Economics 18, 1975.
Stigler, G. “A Theory of Oligopoly,” Journal of Political Economy 72, 1964, 44-61.
Stock, J. “Unit Roots, Structural Breaks and Trends,” in R.F. Engle and D.L. McFadden (eds.), Handbook of Econometrics Volume 4. New York: North Holland, 1994, 2740-2841.
Stock, J., Watson, M. “Evidence on Structural Instability in Macroeconomic Time-series Relations,” Journal of Business and Economic Statistics 14, 1996, 11-30.
Stock, J., Watson, M. Econometrics. Addison Wesley, 2003.
Viscusi, W.K., Harrington, J.E., Vernon, J.M., Economics of Regulation and Antitrust. Cambridge: MIT Press, 2005.
Williamson, O. “Economies as an Antitrust Defense: The Welfare Tradeoffs,” American Economic Review 58, 1968, 18-36.
Treadway, A. “On the Multivariate Flexible Accelerator,” Econometrica 39, 1971, 845-856.