Raising rivals' fixed costs

This paper analyses the strategic use of fixed costs to deter entry or monopolize a market in a standard Cournot framework. First of all a general case shows how the presence of fixed costs can affect the possible equilibria to the Cournot game. It is shown that the presence of a firm with a first-mover advantage can have important implications if fixed costs are raised. In addition the forward induction process becomes important in determining plausible equilibria. The use of firstly regulation and secondly ‘nuisance’ law-suits are considered as strategies to increase fixed costs.

Chain-store pricing and the structure of retail markets

This paper investigates competition between chain-stores and independents in the UK opticians' industry, using the relationship between the number of outlets present in a local market and the market size. Chain-stores are shown to have a significant effect on local market competition. In addition, the empirical approach is extended to allow inferences on the nature and extent of product differentiation. The results are broadly consistent with a model of vertical product differentiation in which chain-stores adopt national pricing strategies. The evidence suggests that the nature of competition between independent retailers depends on whether a chain-store is present.

Assessing the efficacy of structural merger remedies:choosing between theories of harm?

Previous empirical assessments of the effectiveness of structural merger remedies have focused mainly on the subsequent viability of the divested assets. Here, we take a different approach by examining how competitive are the market structures which result from the divestments. We employ a tightly specified sample of markets in which the European Commission (EC) has imposed structural merger remedies. It has two key features: (i) it includes all mergers in which the EC appears to have seriously considered, simultaneously, the possibility of collective dominance, as well as single dominance; (ii) in a previous paper, for the same sample, we estimated a model which proved very successful in predicting the Commission’s merger decisions, in terms of the market shares of the leading firms. The former allows us to explore the choices between alternative theories of harm, and the latter provides a yardstick for evaluating whether markets are competitive or not – at least in the eyes of the Commission. Running the hypothetical post-remedy market shares through the model, we can predict whether the EC would have judged the markets concerned to be competitive, had they been the result of a merger rather than a remedy. We find that a significant proportion were not competitive in this sense. One explanation is that the EC has simply been inconsistent – using different criteria for assessing remedies from those for assessing the mergers in the first place. However, a more sympathetic – and in our opinion, more likely – explanation is that the Commission is severely constrained by the pre-merger market structures in many markets. We show that, typically, divestment remedies return the market to the same structure as existed before the proposed merger. Indeed, one can argue that any competition authority should never do more than this. Crucially, however, we find that this pre-merger structure is often itself not competitive. We also observe an analogous picture in a number of markets where the Commission chose not to intervene: while the post-merger structure was not competitive, nor was the pre-merger structure. In those cases, however, the Commission preferred the former to the latter. In effect, in both scenarios, the EC was faced with a no-win decision. This immediately raises a follow-up question: why did the EC intervene for some, but not for others – given that in all these cases, some sort of anticompetitive structure would prevail? We show that, in this sample at least, the answer is often tied to the prospective rank of the merged firm post-merger. In particular, in those markets where the merged firm would not be the largest post-merger, we find a reluctance to intervene even where the resulting market structure is likely to be conducive to collective dominance. We explain this by a willingness to tolerate an outcome which may be conducive to tacit collusion if the alternative is the possibility of an enhanced position of single dominance by the market leader. Finally, because the sample is confined to cases brought under the ‘old’ EC Merger Regulation, we go on to consider how, if at all, these conclusions require qualification following the 2004 revisions, which, amongst other things, made interventions for non-coordinated behaviour possible without requiring that the merged firm be a dominant market leader. Our main conclusions here are that the Commission appears to have been less inclined to intervene in general, but particularly for Collective Dominance (or ‘coordinated effects’ as it is now known in Europe as well as the US.) Moreover, perhaps contrary to expectation, where the merged firm is #2, the Commission has to date rarely made a unilateral effects decision and never made a coordinated effects decision.

Tacit collusion, firm asymmetries and numbers:evidence from EC merger cases

The purpose of this paper is to identify empirically the implicit structural model, especially the roles of size asymmetries and concentration, used by the European Commission to identify mergers with coordinated effects (i.e. collective dominance). Apart from its obvious policy-relevance, the paper is designed to shed empirical light on the conditions under which tacit collusion is most likely. We construct a database relating to 62 candidate mergers and find that, in the eyes of the Commission, tacit collusion in this context virtually never involves more than two firms and requires close symmetry in the market shares of the two firms.

An evaluation of the impact upon productivity of ending resale price maintenance on books

Report prepared for the OFT by the Centre for Competition Policy at University of East Anglia. An examination of the ending of RPM aims to improve understanding of how competition interventions affect productivity, provide a methodological framework that could inform future evaluations and provide inputs to the ongoing debate about the effects of RPM.

Unilateral versus coordinated effects:comparing the impact on consumer welfare of alternative merger outcomes

The nature of tacitly collusive behaviour often makes coordination unstable, and this may result in periods of breakdown, during which consumers benefit from reduced prices. This is allowed for by adding demand uncertainty to the Compte et al. (2002) model of tacit collusion amongst asymmetric firms. Breakdowns occur when a firm cannot exclude the possibility of a deviation by a rival. It is then possible that an outcome with collusive behaviour, subject to long/frequent break downs, can improve consumer welfare compared to an alternative with sustained unilateral conduct. This is illustrated by re-examining the Nestle/Perrier merger analyzed by Compte et al., but now also taking into account the potential for welfare losses arising from unilateral behaviour.

Raumerkundungen:Der Erzähler Klaus Böldl

Mit stillen, unaufdringlichen Erzähltexten hat sich Klaus Böldl seit seinem vielgelobten Debüt Studie in Kristallbildung (1997) einen vorderen Rang in der deutschen Gegenwartsliteratur erschrieben. Seine Bücher, die zumeist den Norden Europas zum Ort der Handlung machen, loten die Untiefen eines Lebens an der Peripherie aus und schildern eindringlich die stillen Katastrophen, die sich im Inneren der Menschen abspielen. Dieser Materialienband versammelt erstmalig Beiträge namhafter internationaler Wissenschaftler zum bislang unzureichend erforschten Werk Böldls, die dem Versuch gewidmet sind, dem eigenwilligen Ton dieses Erzählers auf die Spur zu kommen. Ergänzt werden die Aufsätze durch einen poetologischen Essay des Autors, ein Interview mit Böldl sowie eine Bibliografie und Zeittafel. Die Herausgeber Claudia Gremler, Studium der Germanistik, Anglistik und Skandinavistik in Göttingen. 2001 Promotion über Herman Bang und Thomas Mann. Senior Lecturer in German an der Aston University, Birmingham. Veröffentlichungen zur Literatur des zwanzigsten und einundzwanzigsten Jahrhunderts. Uwe Schütte, promovierte 1997 an der University of East Anglia bei W.G. Sebald. Reader in German an der Aston University, Birmingham. Zahlreiche Monografien zur deutschsprachigen Gegenwartsliteratur. Zuletzt erschien: „Interventionen. Literaturkritik als Widerspruch bei W.G. Sebald“ (2014).

Interventionen:Literaturkritik als Widerspruch bei W. G. Sebald

"Ich habe einen Horror vor allen billigen Formen der Fiktionalisierung. Mein Medium ist die Prosa, nicht der Roman", begründet W. G. Sebald seine Neigung zum essayistischen Schreiben. Und eben diese Erzählprosa W. G. Sebalds bildet den Stoff, auf dem Uwe Schüttes eindrückliche und kritische Beobachtungen zum biografischen, literaturwissenschaftlichen und literarischen Werdegang des Autors von "Austerlitz" fußen. W. G. Sebald ist einer der anerkanntesten und zugleich umstrittensten Schriftsteller der deutschen Literatur des späten 20. Jahrhunderts. Sein vielgerühmtes literarisches Werk ruht auf einem Fundament, das größtenteils kaum bekannt ist, nämlich die im Verlauf von rund 30 Jahren entstandenen kritischen Schriften. "Interventionen" bietet erstmals einen so tiefschürfenden wie umfassenden Überblick über die Literaturkritik Sebalds unter Einbezug zuvor unveröffentlichter Archivdokumente. Uwe Schütte, der bei Sebald promoviert hat, legt anschaulich dar, wie sich Sebalds eigenwillige Literaturkritik – von der Magisterarbeit über Carl Sternheim bis zum polemischen Essay "Luftkrieg und Literatur" – entwickelt hat. Seine Studie skizziert damit die intellektuelle Biografie des vom Allgäu in die Provinz East Anglias entlaufenen Germanisten. Vor allem aber zeichnet "Interventionen" nach, wie Sebald im kritischen Widerspruch zu Germanistik und deutscher Nachkriegsliteratur selbst zum Schriftsteller wurde. Der Autor Uwe Schütte, geb. 1967, promovierte 1997 bei W. G. Sebald an der University of East Anglia und ist Reader in German an der Aston University in Birmingham, England.

The legacy of climategate:revitalizing or undermining climate science and policy?

The release of emails from a server at the University of East Anglia's Climate Research Unit (CRU) in November 2009 and the following climategate controversy have become a topic for interpretation in the social sciences. This article picks out some of the most visible social science comments on the affair for discussion. These comments are compared to an account of what can be seen as problematic practices by climate scientists. There is general agreement in these comments that climate science needs more openness and transparency. But when evaluating climategate a variety of responses is seen, ranging from the apologetic to the highly critical, even condemning the practices in question. It is argued that reluctance to critically examine the climategate affair, including suspect practices of scientists, has to do with the nature of the debate which is highly politicized. A call is made for more reflection on this case which should not be closed off because of political expediency. © 2012 John Wiley & Sons, Ltd.