Research

Are the antitrust enforcement agencies in the United States sufficiently stringent in challenging mergers? In a new working paper, Vivek Bhattacharya, Gastón Illanes, and David Stillerman inform this debate by examining the price and quantity effects of U.S. retail mergers and modeling the implications of alternative antitrust regimes.

American antitrust regulators have recently taken aim at noncompete clauses. They argue that noncompetes suppress labor bargaining power and thus wages. The Italian labor market differs from its American counterpart in its rigid protections for labor, but the use of noncompetes in Italy occur at about the same rate as in the United States and shows a correlation with lower wages for workers whose noncompete clauses are unjustified because their jobs require little training and do not grant access to trade secrets. The evidence from Italy suggests that better regulation of noncompetes and informing workers of their rights is justified on the whole.

Social trust in democratic institutions affects the ability of those institutions to carry out policy. In new research, Rustam Jamilov shows how decreasing trust in the U.S. institutions has reduced the ability of the Federal Reserve to influence the economy in states that exhibit lower levels of trust.

Most mergers in industries with only a handful of competitors are anticompetitive, so why don’t we block them? The fix is to use a structural presumption to lower the burden for regulators.

Why ban competitive offers in the online world when they’re allowed offline? Big tech wants plain vanilla broadband pricing because it forecloses platform competition.

Does investing in information technology (IT) enable firms to “scale without mass” and increase their market share? In a new paper, Erik Brynjolfsson, Wang Jin, and Xiupeng Wang examine how IT affects firm size, market concentration, and the labor share of revenue.

New research indicates that FinTech lending has not been as ‘disruptive’ in risk-based pricing as claimed. While FinTech has provided increased loan access to some individuals, reliance on traditional credit scoring and spillovers from banking regulations leads to mispricing and cross-subsidization of borrowers. The authors suggest alternatives to allocate capital efficiently and improve financial inclusion.

In two recent papers, Matthew E. Kahn and Joseph Tracy examine the outcomes of local labor markets affected by monopsony power. They find that in areas with a high degree of monopsony power, workers earn lower wages but are compensated with lower house prices, at the expense of homeowners. Monopsony markets also experience a “brain drain” over time due to young, educated workers who leave for better opportunities. The rise of work-from-home may accelerate this dynamic by allowing talent to change labor markets without changing residences.

Income inequality may exacerbate the spread of infectious diseases. In a new paper, Jay Bhattacharya, Joydeep Bhattacharya, and Min Kyong Kim examine the relationship between income inequality and the incidence and prevalence of tuberculosis across countries.

Darren Bush, Mark Glick, and Gabriel A. Lozada argue that the Consumer Welfare Standard  is inconsistent with modern welfare economics and that a modern approach to antitrust could integrate traditional Congressional goals as advocated by the Neo-Brandesians. Such an approach could be the basis for an alliance between the post-Chicago economists and the Neo-Brandesians.