Cartel deterrence and settlements: the Brazilian experience

Settlements are an important part of a program of cartel deterrence, particularly when the likelihood of conviction and the litigation costs are higher. This type of negotiated procedure to reach finality is in essence complementary to the fully adversarial procedures associated to the trial by the administrative or judicial courts, and to other investigative instruments, such as the leniency agreement. The Brazilian experience provides some insights about the different models of direct settlement in cartel cases and the complex interaction among settlements, leniency agreements, and trial outcome. First, there is leeway for the complementary models of settlements, the first oriented mainly to increasing the likelihood of detection, and the second oriented to saving social costs of litigation. Second, the concern with the preservation of the demand for leniency agreements led the competition authority to restrict the use of settlements, which are effectively designed for the defendants that are likely guilty and give higher value to finality. The recent experience illustrates that the current settlement policy has not caused any adverse effect on leniency agreements, while reducing litigation costs and granting finality in some cases.

On the cost of sympathy : a alternative model of insurance markets

The paper provides an alternative model for insurance market with three types of agents: households, providers of a service and insurance companies. Households have uncertainty about future leveIs of income. Providers, if hired by a household, perform a diagnoses and privately learn a signal. For each signal there is a procedure that maximizes the likelihood of the household obtaining the good state of nature. The paper assumes that providers care about their income and also about the likelihood households will obtain the good state of nature (sympathy assumption). This assumption is satisfied if, for example, they care about their reputation or if there are possible litigation costs in case they do not use the appropriate procedure. Finally, insurance companies offer contracts to both providers and households. The paper provides sufficient conditions for the existence of equilibrium and shows that the sympathy assumption 1eads to a 10ss of welfare for the households due to the need to incentive providers to choose the least expensive treatment.

Monopólio postal e litigância predatória pelos correios

Este trabalho tem por objetivo analisar o comportamento da Empresa Brasileira de Correios e Telégrafos (ECT) no âmbito judicial diante de seus concorrentes e os clientes destes, buscando verificar se há evidências de que a empresa estaria praticando um ilícito concorrencial e utilizando o judiciário para prejudicar concorrentes no mercado e dificultar a entrada de novos agentes (ou seja, se haveria litigância predatória pelos Correios), mediante a criação de novos custos aos seus rivais e, assim, prejudicando a competição no setor postal. No âmbito jurídico, há pouca clareza quanto à extensão do monopólio postal e verifica-se, uma carência de política pública para o setor. Para realizar o estudo, foi analisado o contexto no qual se insere a conduta da ECT e foi elaborada uma base de dados a partir da análise de processos judiciais movidos pela ECT. Na análise empírica dos dados coletados, buscou-se avaliar como a decisão do STF sobre a existência e validade de uma exclusividade da ECT na prestação de certos serviços postais, tais quais definidos por lei, afetou a probabilidade de uma decisão final em 1ª instância ser favorável aos Correios. Os resultados indicaram que tal probabilidade é significativamente menor após a decisão do STF em 2009, o que serve de evidência de que a ECT vinha extrapolando seus direitos nos pedidos realizados judicialmente. Apesar de o contexto no qual a conduta se insere, especialmente quanto aos custos de litigar, indicarem racionalidade na conduta e de a análise empírica ir no mesmo sentido, as evidências não são fortes o suficiente para se concluir que a ECT praticou litigância predatória.

A general-equilibrium closed-form solution to the welfare costs of inflation (Forthcoming, Revista Brasileira de Economia)

This work presents closed-form solutions to Lucasís (2000) generalequilibrium expression for the welfare costs of ináation, as well as to the di§erence between the general-equlibrium measure and Baileyís (1956) partial-equilibrium measure. In Lucasís original work only numerical solutions are provided.

Welfare costs of inflation: the case for interest-bearing money and empirical estimates for Brazil

We provide in this paper a closed fonn for the Welfare Cost of Inflation which we prove to be closer than Bailey's expression to the correct solution of the corresponding non-separable differential equation. Next. we extend this approach to ao economy with interest-bearing money, once again presenting a better appoximation than the one given by Bailey's approach. Fmally, empirical estimates for Brazil are presented.

An intra-household approach to the welfare costs of inflation

The literature on the welfare costs of in‡ation universally assumes that the many-person household can be treated as a single economic agent. This paper explores what the heterogeneity of the agents in a household might imply for such welfare analyses. First, we show that allowing for a single-unity or for a multi-unity transacting technology impacts the money demand function and, therefore, the welfare costs of in‡ation. Second, we derive su¢cient conditions that make the welfare assessments which depart directly from the knowledge of the money demand function (as in Lucas (2000)) robust under this alternative setting. Third, we compare our general-equilibrium measure with Bailey’s (1956) partial-equilibrium one.

Endogenous time-dependent rules and the costs of disinflation with imperfect credibility

This paper examines the output effects of monetary disinflation in a model with endogenous time-dependent pricing rules and imperfect credibility of the disinflation policy. We find that these features interact to generate an additional effect on top f the ones obtained with either endogenous time-dependent rules (Bonomo and Carvalho, 2003) or imperfect credibility (Ball, 1995) in isolation. This results in higher output costs of monetary disinflation.

An intra-household approach to the welfare costs of inflation (Revised Version, Forthcoming 2006, Estudos Econômicos)

The literature on the welfare costs of ináation universally assumes that the many-person household can be treated as a single economic agent. This paper explores what the heterogeneity of the agents in a household might imply for such welfare analyses. First, we show that allowing for a one-person or for a many-person transacting technology impacts the money demand function and, therefore, the welfare costs of ináation. Second, more importantly, we derive su¢ cient conditions under which welfare assessments which depart directly from the knowledge of the money demand function (as in Lucas (2000)) are robust (invariant) under the number of persons considered in the household. Third, we show that Baileyís (1956) partial-equilibrium measure of the welfare costs of ináation can be obtained as a Örst-order approximation of the general-equilibrium welfare measure derived in this paper using a many-person transacting technology.

Posicionamento estratégico com switching costs e lock-in na economia da informação

Apresenta uma perspectiva de análise de posicionamento estratégico utilizando-se os princípios econômicos de switching costs e lock-in. Aborda as diferentes fontes de switching costs e analisa as estratégias de lock-in. Apresenta um caso prático com aplicação destes conceitos no segmento de ERP no Brasil.

The costs of education, longevity and the poverty of nations

This paper explores the distortions on the cost of education, associated with government policies and institutional factors, as an additional determinant of cross-country income differences. Agents are finitely lived and the model takes into account life-cycle features of human capital accumulation. There are two sectors, one producing goods and the other providing educational services. The model is calibrated and simulated for 89 economies. We find that human capital taxation has a relevant impact on incomes, which is amplified by its indirect effect on returns to physical capital. Life expectancy plays an important role in determining long-run output: the expansion of the population working life increases the present value of the flow of wages, which induces further human capital investment and raises incomes. Although in our simulations the largest gains are observed when productivity is equated across countries, changes in longevity and in the incentives to educational investment are too relevant to ignore.

The macroeconomic effects of infrequent information with adjustment costs

We extend the macroeconomic literature on Sstype rules by introducing infrequent information in a kinked ad justment cost model. We first show that optimal individual decision rules are both state-and -time dependent. We then develop an aggregation framework to study the macroeconomic implications of such optimal individual decision rules. In our model, a vast number of agents act together, and more so when uncertainty is large.The average effect of an aggregate shock is inversely related to its size and to aggregate uncertainty. These results are in contrast with those obtained with full information ad justment cost models.

Welfare costs of inflation when interest-bearing deposits are disregarded: a calculation of the bias

Most estimates of the welfare costs of in ation are devised considering only noninterest- bearing assets, ignoring that since the 80s technological innovations and new regulations have increased the liquidity of interest-bearing deposits. We investigate the resulting bias. Suscient and necessary conditions on its sign are presented, along with closed-form expressions for its magnitude. Two examples dealing with bidimensional bilogarithmic money demands show that disregarding interest-bearing monies may lead to a non-negligible overestimation of the welfare costs of in ation. An intuitive explanation is that such assets may partially make up for the decreased demand of noninterest-bearing assets due to higher in ation.

Endogenous Transaction Costs

The paper proposes an alternative general equilibrium formulation of financial asset economies with transactions costs. Transaction costs emerge endogenously at equilibrium and reflect agents decisions of intermediating financial activities at the expense of providing labor services. An equilibrium is shown to exist in the case of real asset structures.