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

This paper estimates the implicit model, especially the roles of size asymmetries and firm numbers, used by the European Commission to identify mergers with coordinated effects. This subset of cases offers an opportunity to shed empirical light on the conditions where a Competition Authority believes tacit collusion is most likely to arise. We find that, for the Commission, tacit collusion is a rare phenomenon, largely confined to markets of two, more or less symmetric, players. This is consistent with recent experimental literature, but contrasts with the facts on ‘hard-core’ collusion in which firm numbers and asymmetries are often much larger.

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 benet from reduced prices. This is allowed for by adding demand uncertainty to the Compte et al. (2002) model of tacit collusion amongst asymmetric rms. Breakdowns occur when a rm 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.

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.

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.

Investigation of formulation and process of lyophilised orally disintegrating tablet (ODT) using novel amino acid combination

Lyophilised orally disintegrating tablets (ODTs) have achieved a great success in overcoming dysphagia associated with conventional solid dosage forms. However, the extensive use of saccharides within the formulation limits their use in treatment of chronic illnesses. The current study demonstrates the feasibility of using combination of proline and serine to formulate zero sacharide ODTs and investigates the effect of freezing protocol on sublimation rate and tablets characteristics. The results showed that inclusion of proline and serine improved ODT properties when compared to individual counterparts. Additionally, annealing the ODTs facilitated the sublimation process and shortened the disintegration time. © 2010 by the authors; licensee Molecular Diversity Preservation International, Basel, Switzerland.

Personal knowledge development in online learning:a model for measuring externalisation, combination and internalisation

This paper presents a model for measuring personal knowledge development in online learning environments. It is based on Nonaka‘s SECI model of organisational knowledge creation. It is argued that Socialisation is not a relevant mode in the context of online learning and was therefore not covered in the measurement instrument. Therefore, the remaining three of SECI‘s knowledge conversion modes, namely Externalisation, Combination, and Internalisation were used and a measurement instrument was created which also examines the interrelationships between the three modes. Data was collected using an online survey, in which online learners report on their experiences of personal knowledge development in online learning environments. In other words, the instrument measures the magnitude of online learners‘ Externalisation and combination activities as well as their level of internalisation, which is the outcome of their personal knowledge development in online learning.

Class I T-cell epitope prediction:improvements using a combination of proteasome cleavage, TAP affinity, and MHC binding

Cleavage by the proteasome is responsible for generating the C terminus of T-cell epitopes. Modeling the process of proteasome cleavage as part of a multi-step algorithm for T-cell epitope prediction will reduce the number of non-binders and increase the overall accuracy of the predictive algorithm. Quantitative matrix-based models for prediction of the proteasome cleavage sites in a protein were developed using a training set of 489 naturally processed T-cell epitopes (nonamer peptides) associated with HLA-A and HLA-B molecules. The models were validated using an external test set of 227 T-cell epitopes. The performance of the models was good, identifying 76% of the C-termini correctly. The best model of proteasome cleavage was incorporated as the first step in a three-step algorithm for T-cell epitope prediction, where subsequent steps predicted TAP affinity and MHC binding using previously derived models.

A preliminary evaluation of a novel method to monitor a triple antioxidant combination (vitamins E, C and alpha-lipoic acid) in diabetic volunteers using in vitro methaemoglobin formation

Eight otherwise healthy diabetic volunteers took a daily antioxidant supplement consisting of vitamin E (200 IU), vitamin C (250 mg) and α-lipoic acid (90 mg) for a period of 6 weeks. Diabetic dapsone hydroxylamine-mediated methaemoglobin formation and resistance to erythrocytic thiol depletion was compared with age and sex-matched non-diabetic subjects. At time zero, methaemoglobin formation in the non-diabetic subjects was greater at all four time points compared with that of the diabetic subjects. Resistance to glutathione depletion was initially greater in non-diabetic compared with diabetic samples. Half-way through the study (3 weeks), there were no differences between the two groups in methaemoglobin formation and thiol depletion in the diabetic samples was now lower than the non-diabetic samples at 10 and 20 min. At 6 weeks, diabetic erythrocytic thiol levels remained greater than those of non-diabetics. HbA1c values were significantly reduced in the diabetic subjects at 6 weeks compared with time zero values. At 10 weeks, 4 weeks after the end of supplementation, the diabetic HbA1c values significantly increased to the point where they were not significantly different from the time zero values. Total antioxidant status measurement (TAS) indicated that diabetic plasma antioxidant capacity was significantly improved during antioxidant supplementation. Conversion of α-lipoic acid to dihydrolipoic acid (DHLA) in vivo led to potent interference in a standard fructosamine assay kit, negating its use in this study. This report suggests that triple antioxidant therapy in diabetic volunteers attenuates the in vitro experimental oxidative stress of methaemoglobin formation and reduces haemoglobin glycation in vivo. © 2003 Elsevier Science B.V. All rights reserved.

An improved conflicting evidence combination approach based on a new supporting probability distance

To avoid counter-intuitive result of classical Dempster's combination rule when dealing with highly conflict information, many improved combination methods have been developed through modifying the basic probability assignments (BPAs) of bodies of evidence (BOEs) by using a certain measure of the degree of conflict or uncertain information, such as Jousselme's distance, the pignistic probability distance and the ambiguity measure. However, if BOEs contain some non-singleton elements and the differences among their BPAs are larger than 0.5, the current conflict measure methods have limitations in describing the interrelationship among the conflict BOEs and may even lead to wrong combination results. In order to solve this problem, a new distance function, which is called supporting probability distance, is proposed to characterize the differences among BOEs. With the new distance, the information of how much a focal element is supported by the other focal elements in BOEs can be given. Also, a new combination rule based on the supporting probability distance is proposed for the combination of the conflicting evidences. The credibility and the discounting factor of each BOE are generated by the supporting probability distance and the weighted BOEs are combined directly using Dempster's rules. Analytical results of numerical examples show that the new distance has a better capability of describing the interrelationships among BOEs, especially for the highly conflicting BOEs containing non-singleton elements and the proposed new combination method has better applicability and effectiveness compared with the existing methods.

Linear binocular combination of responses to contrast modulation:contrast-weighted summation in first- and second-order vision

Binocular combination for first-order (luminancedefined) stimuli has been widely studied, but we know rather little about this binocular process for spatial modulations of contrast (second-order stimuli). We used phase-matching and amplitude-matching tasks to assess binocular combination of second-order phase and modulation depth simultaneously. With fixed modulation in one eye, we found that binocularly perceived phase was shifted, and perceived amplitude increased almost linearly as modulation depth in the other eye increased. At larger disparities, the phase shift was larger and the amplitude change was smaller. The degree of interocular correlation of the carriers had no influence. These results can be explained by an initial extraction of the contrast envelopes before binocular combination (consistent with the lack of dependence on carrier correlation) followed by a weighted linear summation of second-order modulations in which the weights (gains) for each eye are driven by the first-order carrier contrasts as previously found for first-order binocular combination. Perceived modulation depth fell markedly with increasing phase disparity unlike previous findings that perceived first-order contrast was almost independent of phase disparity. We present a simple revision to a widely used interocular gain-control theory that unifies first- and second-order binocular summation with a single principle-contrast-weighted summation-and we further elaborate the model for first-order combination. Conclusion: Second-order combination is controlled by first-order contrast.

Combination of Global and Local Attributional Similarities for Synonym Detection

2000 Mathematics Subject Classification: 68T50.

On Supra-Bayesian Weighted Combination of Available Data Determined by Kerridge Inaccuracy and Entropy

2010 Mathematics Subject Classification: 94A17.

Optimal combination of energy crops under different policy scenarios:the case of Northern Greece

Energy crops production is considered as environmentally benign and socially acceptable, offering ecological benefits over fossil fuels through their contribution to the reduction of greenhouse gases and acidifying emissions. Energy crops are subjected to persistent policy support by the EU, despite their limited or even marginally negative impact on the greenhouse effect. The present study endeavors to optimize the agricultural income generated by energy crops in a remote and disadvantageous region, with the assistance of linear programming. The optimization concerns the income created from soybean, sunflower (proxy for energy crop), and corn. Different policy scenarios imposed restrictions on the value of the subsidies as a proxy for EU policy tools, the value of inputs (costs of capital and labor) and different irrigation conditions. The results indicate that the area and the imports per energy crop remain unchanged, independently of the policy scenario enacted. Furthermore, corn cultivation contributes the most to iFncome maximization, whereas the implemented CAP policy plays an incremental role in uptaking an energy crop. A key implication is that alternative forms of motivation should be provided to the farmers beyond the financial ones in order the extensive use of energy crops to be achieved.

Industry Education: The Merger Continues

In the discussion - Industry Education: The Merger Continues - by Rob Heiman Assistant Professor Hospitality Food Service Management at Kent State University, the author originally declares, “Integrating the process of an on-going catering and banquet function with that of selected behavioral academic objectives leads to an effective, practical course of instruction in catering and banquet management. Through an illustrated model, this article highlights such a merger while addressing a variety of related problems and concerns to the discipline of hospitality food service management education.” The article stresses the importance of blending the theoretical; curriculum based learning process with that of a hands-on approach, in essence combining an in-reality working program, with academics, to develop a well rounded hospitality student. “How many programs are enjoying the luxury of excessive demand for students from industry [?],” the author asks in proxy for, and to highlight the immense need for qualified personnel in the hospitality industry. As the author describes it, “An ideal education program concerns itself with the integration of theory and simulation with hands-on experience to teach the cognitive as well as the technical skills required to achieve the pre-determined hospitality education objectives.” In food service one way to achieve this integrated learning curve is to have the students prepare foods and then consume them. Heiman suggests this will quickly illustrate to students the rights and wrongs of food preparation. Another way is to have students integrating the academic program with feeding the university population. Your author offers more illustrations on similar principles. Heiman takes special care in characterizing the banquet and catering portions of the food service industry, and he offers empirical data to support the descriptions. It is in these areas, banquet and catering, that Heiman says special attention is needed to produce qualified students to those fields. This is the real focus of the discussion, and it is in this venue that the remainder of the article is devoted. “Based on the perception that quality education is aided by implementing project assignments through the course of study in food service education, a model description can be implemented for a course in Catering and Banquet Management and Operations. This project model first considers the prioritized objectives of education and industry and then illustrates the successful merging of resources for mutual benefits,” Heiman sketches. The model referred to above is also the one aforementioned in the thesis statement at the beginning of the article. This model is divided into six major components; Heiman lists and details them. “The model has been tested through two semesters involving 29 students,” says Heiman. “Reaction by all participants has been extremely positive. Recent graduates of this type of program have received a sound theoretical framework and demonstrated their creative interpretation of this theory in practical application,” Heiman says in summation.