The Role of the State

The draft Merger Guidelines seek to reduce mergers and acquisitions, especially those that remove potential entrants. However, precluding acquisitions in those settings ignores both what incentivizes startups and investors to take initial risks, as well as the advantages that large incumbents have to parlay acquisitions into further innovation and an array of widely commercialized consumer products. The overall effect may dampen innovation, write Ginger Zhe Jin, Mario Leccese, and Liad Wagman.

Big Tech’s efforts to push Federal Trade Commission Chair Lina Khan and Assistant Attorney General Jonathan Kanter to recuse themselves from participating in lawsuits against the companies due to prior work have no legal basis and are naked efforts to weaken agency enforcement, writes Laurence Tribe.

Joshua Gray and Cristian Santesteban show how the Federal Trade Commission could have used its 2023 draft Merger Guidelines to focus its challenges against Microsoft-Activision and Meta-Within squarely on the pressing economic concern of protecting competition during critical technological transitions making full use of the law’s traditional incipiency standard.

Bruno Pellegrino and Geoff Zheng explain how their novel methodology combining survey data and economic modeling can be used to quantify major questions, such as the economic loss from government regulation. This loss, they find, amounts to $154 billion in seven European countries each year.

In this second article on real estate in the current high-interest-rate environment, Joseph L. Pagliari Jr. explores banks’ exposure to commercial real estate, who might help fill the credit void as bank funding dries up, how the work-from-home phenomenon impacts commercial real estate prices, particularly the office sector, and what risks large urban centers face with emptied office buildings.

There are concerns among bankers and economists that commercial real estate prices are at risk of decreasing substantially. Joseph L. Pagliari, Jr. explains how commercial real estate should be priced based on current and projected inflation and interest rates. A subsequent article will explore if concerns about bank and broader economic vulnerabilities to lower CRE prices.

Google is on trial for anticompetitive behaviors designed to protect its monopoly in internet search. Herb Hovenkamp analyzes several possible remedies the presiding court and Department of Justice could pursue and suggests which ones may succeed in reinforcing competition to protect consumer interests.

Using a household survey with information treatments conducted in the aftermath of the SVB’s collapse, we examine the potential for a large bank’s failure to trigger bank runs and the effectiveness of public communication in containing such a risk. We find that news about SVB’s collapse increases households’ propensity to withdraw bank deposits as people become more worried that their bank may fail and expect larger losses on deposits in case of bank failure. Communication by the Federal Reserve in support of the banking sector and information about FDIC deposit insurance can contain the risk of bank runs, while communication from politicians influences only their electoral base.

Politicians and governments in the United States and elsewhere have recently proposed or implemented wealth taxes to supplement revenue and reduce wealth inequality. In a new study, Samira Marti, Isabel Z. Martínez, and Florian Scheuer show how decreases in wealth taxes led to increases in wealth inequality in Switzerland, though they find that these decreases alone are not enough to explain the magnitude of widening disparities.

In new research, Enghin Atalay, Alan Sorensen, Christopher Sullivan, and Wanjia Zhu find that mergers and acquisitions often lead to the merged firm offering less product variety than when the two firms operated pre-merger.