The Role of the State

Daryl Lim explains that while there is some evidence that pricing algorithms facilitate collusion, there are reasons to be skeptical of their effectiveness. Lim advocates for compliance by design: firms should create algorithms that don’t collude on price, comply with reporting their algorithms transparently, and know that they will be held responsible for the actions the algorithm takes.

The Stigler Center for the Study of the Economy and the State hosted its annual antitrust and competition conference in late April. The following is a transcript of Nobel Laureate Oliver Hart's interview with ProMarket Managing Editor Brooke Fox.

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.

Grail and its competitors are developing tests which will save perhaps millions of lives. They will detect many different types of cancer very early—if they ever exist. All these tests need Illumina’s instruments. The FTC, reversing an administrative law judge, said Illumina could not buy Grail. If it did, the FTC said, it would not let Grail’s competitors use its instruments. Illumina has appealed, saying, among other things, that since the tests do not exist there is, for antitrust purposes, currently no market.  Yet while the tests may or may not exist in the future the Fifth Circuit has to decide this case now.

Anti-ESG rhetoric from conservative states conflates valid financial evaluations of company and industry prospects with the ideological values of political opponents. Politicians that pass legislation preventing businesses and state agencies from working with financial services with ESG standards will only harm their constituents. Instead, states should encourage competition and variety in financial services, writes Jennifer J. Schulp.

Companies increasingly use sophisticated computational tools to compete, particularly in digital markets. Giovanna Massarotto outlines how antitrust agencies must similarly modernize and adopt advanced technologies to address complex antitrust enforcement challenges effectively and remain relevant.

What happens when the goals of antitrust enforcers clash with regulators focused on issues of national security and public interest? A forthcoming book by Ioannis Kokkoris, Public Interest Considerations in US Merger Control, explores these tensions in the United States regulatory framework.

Section 2 defendants often interpret the holdings of the United States Court of Appeals for the District of Columbia in U.S. v Microsoft Corp...

Drawing on the theory of Albert O. Hirschman’s  Exit, Voice, and Loyalty, Brian Callaci argues non-compete clauses stifle the important channels of communication between employees and businesses necessary for improving firm competitiveness. The evidence also shows that, despite claims from businesses, non-competes harm rather than reward employees for their loyalty. 

Cary Coglianese lays out the potential, and the considerations, for antitrust regulators to use machine learning and artificial intelligence algorithms.