The Role of the State

Summary Teaser: In new research, Jitendra Aswani and William W. Xiong show that countries facing greater risks to their natural assets, from overfishing to deforestation, pay more to borrow, as investors discount their long-run growth prospects. Governments can reduce that premium by implementing green projects that address the risks they actually face, but announcing an intention to do so is not enough.

The dynamic competition school claims that competition authorities, by analyzing firms’ capabilities, can protect what this school calls dynamic competition.  Competition authorities, however, cannot adequately analyze firms’ capabilities. This school, therefore, lacks any framework which the authorities can use to analyze what they call dynamic competition. Any framework to protect dynamic competition, or what some call competition to innovate, must instead first identify the future products the competing firms are trying to make, writes Larry Landman.

In new research, Saharsh Agarwal and Ananya Sen study how Google AI Overviews reduce traffic to content publishers, their impact on consumer experience, and the implications of these findings for platform regulation and copyright and competition law.

For its entire 15-year life as a regional bank, SVB held the same risky bet. The risks were visible the whole time, yet supervisors reacted only once losses had materialized. SVB's collapse is less a story of hidden danger than of a supervisory system that polices process rather than risk.

In new research, James Flynn, David Munro, and Caitlin Myers document how sexual behavior has changed in light of total abortion bans enacted after Dobbs vs. Jackson Women’s Health. They find that abortion bans reduced sexual activity and increased contraceptive use, motivated by individuals having an increased awareness of state policy.

In new research, Raymond Fisman, Aron Malatinszky, and Eyüb Yegen find that states with higher levels of corruption are more likely to delay or reject requests for government data required by freedom of information laws in the leadup to elections.

A remedy of “Pay for Half” that limits the share of devices for which Google can pay for default search status, as well as the share of revenue Google can pay its channel parters for that status, offers a middle ground that would help restore competition while preserving revenue for distribution partners, argue Alissa Cooper, Fiona Scott Morton, and Nick Jacobson.

Although merger review now acknowledges potential harms to labor markets, the analytical tools remain underdeveloped. Shishene Jing proposes identifying “labor market mavericks” as companies essential to maintaining competition among employers and preventing mergers that could reduce wages and other worker benefits.

Chilean authorities are testing an unofficial “independence rule” that forbids digital platforms from exerting further influence over how business users set their own prices through most-favored-nation clauses. Manuel Abarca Meza assesses how this rule could potentially fit into antitrust case law and whether or not it effectively weighs the risks against market efficiencies.

The federal Buy Clean initiative illustrates how procurement quotas can alter market structure by raising compliance costs and rewarding scale. As states expand their own Buy Clean programs, competition effects deserve the same scrutiny as environmental ones, writes Francesca Chiaradia.