The Role of the State

The Political Economy of the Decline of Antitrust Enforcement in the US

Why has antitrust enforcement declined in the United States since the 1970s? Is it due to the preferences of voters or business influence? In this symposium, Jonathan Baker, Eleanor Fox, and Herbert Hovenkamp will discuss the findings of Eric Posner, Luigi Zingales and Filippo Lancieri’s new paper, “The Political Economy of the Decline of Antitrust Enforcement in the United States.” Lancieri summarizes the findings of the paper here.

Deferred Bonuses as a Buffer Against Bank Failures

Hamid Mehran discusses proposals for reforming bankers' compensation to better align incentives and risk-taking. Mehran contends market-based, self-regulating compensation structures would enhance governance and financial stability more effectively than punitive bonus caps or clawbacks imposed by regulators.

Firms Sharing Board Members Can Collude To Reduce Worker Mobility

In new research, Taylor Begley, Peter Haslag, and Daniel Weagley find that when firms begin sharing a common director, there is a significant reduction in the number of employees that switch jobs between the two companies. The reduction is largest when the firms compete in the same labor market and for those employees who are most costly for firms to replace. The results show the link between overlapping board members and anticompetitive labor practices is a surprisingly widespread phenomenon.

The Economic Consequences of Political Pressure on the Federal Reserve

Politicians often interfere with central banks, but it is not clear how to measure such political pressure systematically and therefore difficult to quantify its economic consequences. In new research, Thomas Drechsel finds that political pressure strongly and persistently raises inflation and inflation expectations but has little impact on economic activity.

Antitrust Needs To Draw on Computer Science To Detect Algorithmic Collusion

In new research, Giovanna Massarotto explains how collusion manifests differently in the digital economy. She argues that antitrust regulators, scholars, and courts need to incorporate lessons from computer science to update how they monitor markets and identify algorithmic collusion.

The Pervasive Influence of Political Affiliation on Circuit Court Decisions

In new research, Alma Cohen finds that the political affiliations of Circuit Court judges influence decisions in a much wider variety of cases than previously thought.

How Stricter Merger Guidelines Benefit Workers

Stricter merger policy guidelines will increase competition, leading to higher wages and welfare for workers, writes Kyle Herkenhoff and Simon Mongey. The authors use economic modeling to show that the stricter 2023 Guidelines will improve worker welfare, and that even tighter thresholds can be applied to labor markets to amplify worker welfare gains from antitrust policy.

Antitrust Scholarship Must Start Taking Predictability Seriously

Academic writings on the optimal design of antitrust rules fail to pay sufficient attention to enforcement predictability as a relevant factor. In new research, Jan Broulík analyzes the various ways in which predictability is disregarded and their possible underlying reasons.

Epic v. Google Offers Courts Chance To Correct Course on “Right To Repair”

Following the Federal Trade Commission’s 2021 publication of “Nixing the Fix: An FTC Report to Congress on Repair Restrictions,” private “right to repair” cases have multiplied against companies that leverage their market power in a “primary equipment market” (e.g., tractors) to force their customers also to purchase their offerings in “aftermarkets” (e.g., tractor repairs) that otherwise would be competitive. Daniel McCuaig argues that the application of the 1992 Supreme Court decision in Eastman Kodak Co. v. Image Technical Services, Inc. to these cases misunderstands that case and improperly shields monopolists from competitive pressures, including in Epic’s recent case against Apple.

The Privacy Fallacy

The following is an excerpt from Ignacio Cofone’s new book, “The Privacy Fallacy: Harm and Power in the Information Economy,” out now.

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