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Should we pay regulators according to their performance? In a new paper, Jason Chen, Jakub Hajda, and Joseph Kalmenovitz show that a pay-for-performance system has a surprising effect: it increases regulatory effort but also motivates regulators, especially the productive ones, to quit and join the private sector.

The following is an excerpt from Marietje Schaake's new book,"The Tech Coup: How To Save Democracy from Silicon Valley," now out at Princeton University Press.

Mario Draghi’s report on raising European competitiveness contains two insights about competition policy. First, competition policy has a small but significant role to play in closing the “innovation gap” between the European Union, the United States and China. Second, increasing European productivity demands “revamping” competition through the introduction of technical-legal reforms.  

Roslyn Layton writes that proxy advisors, which provide voting services for shareholder meetings, can influence how publicly traded firms conduct their business. Two proxy firms–Glass Lewis and Institutional Shareholder Services (ISS)–have 97 percent of the market and have allowed some minority shareholders to exercise outsized influence.

Steven C. Salop writes that only Google’s full divestiture of its Android operating system can avoid incentives on the part of Android and Google to preference Google’s apps, including its search engine, and stifle competition.

John Kwoka writes that the antitrust agencies under President Joe Biden made thoughtful revisions to the Merger Guidelines that will strengthen enforcement and competition. However, they still fall short in their treatment of the structural presumption and efficiencies defense, where both economics and the law provide grounds for strengthening. Current practices strain agency resources and permit anticompetitive mergers and acquisitions. The next administration must revisit these two issues.

Over the past four years, antitrust scrutiny has increasingly focused on large technology firms. Ginger Zhe Jin and Liad Wagman discuss the complexities of antitrust enforcement and policy in the digital age, highlighting the challenges of promoting innovation while fostering competition, and areas where consumer protection and antitrust are colliding or are set to collide. To that end, the authors identify several key questions that the next administration of the United States should address to better delineate between legal and illegal competitive practices in the digital age, with implications for the broader economy.

Steven C. Salop recommends that the next presidential administration continue to focus competition policy on protecting against adverse labor market outcomes. He suggests several policies the administration might pursue to achieve these benefits.

Herbert Hovenkamp applauds the Biden administration’s antitrust authorities for intervening in labor markets and more robustly challenging mergers between competitors. However, the next administration should clarify in its guidance that the objective of stronger antitrust enforcement must focus on lowering prices, increasing output, and removing any restraints on innovation.

The United States power grid is increasingly strained by the surging electricity demand driven by the AI boom. Efforts to modernize the power infrastructure are unlikely to keep pace with the rising demand in the coming years. Barak and Eli Orbach explore why competition in AI markets may create an electricity demand shock, examine the associated social costs, and offer several policy recommendations.