Scholarship on competition policy has begun to explore the implications of learning from behavioral research and to challenge the assumption of profit maximization at the heart of neoclassical economic theory of the firm. This scholarship is briefly reviewed, focusing on merger control. Prospects for basing merger control entirely on data from actual mergers or laboratory experiments are explored. Also explored are implications of behavioral research for merger assessment in consumer-goods industries. The conclusion is that competition policy should continue to rely on neoclassical economic analysis based on the assumption of profit maximization.
{"title":"Behavioral Antitrust and Merger Control","authors":"G. Werden, Luke M. Froeb, Mikhael Shor","doi":"10.2139/ssrn.1612282","DOIUrl":"https://doi.org/10.2139/ssrn.1612282","url":null,"abstract":"Scholarship on competition policy has begun to explore the implications of learning from behavioral research and to challenge the assumption of profit maximization at the heart of neoclassical economic theory of the firm. This scholarship is briefly reviewed, focusing on merger control. Prospects for basing merger control entirely on data from actual mergers or laboratory experiments are explored. Also explored are implications of behavioral research for merger assessment in consumer-goods industries. The conclusion is that competition policy should continue to rely on neoclassical economic analysis based on the assumption of profit maximization.","PeriodicalId":340204,"journal":{"name":"Vanderbilt University Law School","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134103551","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the role of privatization on the cost of government-provided services. We examine data on the cost of housing public and private prisoners from all 50 states over the time period 1996-2004, and find that the existence of private prisons in a state reduces the growth in per prisoner expenditures by public prisons by a statistically significant amount. In 2004, the average Department of Corrections expenditures in states without private prisoners was approximately $493 million. Our findings suggest that if the "average" state in that group were to introduce the use of private prisons, the potential savings for one year in Department of Corrections expenditures for public prisons could be approximately $13 to $15 million for that particular hypothetical state. These savings on public prisons would be in addition to any direct savings from the use of private prisons by itself.
{"title":"Do Government Agencies Respond to Market Pressures? Evidence from Private Prisons","authors":"J. Blumstein, M. Cohen, S. Seth","doi":"10.2139/ssrn.441007","DOIUrl":"https://doi.org/10.2139/ssrn.441007","url":null,"abstract":"This paper examines the role of privatization on the cost of government-provided services. We examine data on the cost of housing public and private prisoners from all 50 states over the time period 1996-2004, and find that the existence of private prisons in a state reduces the growth in per prisoner expenditures by public prisons by a statistically significant amount. In 2004, the average Department of Corrections expenditures in states without private prisoners was approximately $493 million. Our findings suggest that if the \"average\" state in that group were to introduce the use of private prisons, the potential savings for one year in Department of Corrections expenditures for public prisons could be approximately $13 to $15 million for that particular hypothetical state. These savings on public prisons would be in addition to any direct savings from the use of private prisons by itself.","PeriodicalId":340204,"journal":{"name":"Vanderbilt University Law School","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128673221","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines sources of gender pay disparity and the factors that contribute to this pay gap. Many researchers question the role of discrimination and instead attribute the residual pay gap to gender differences in preferences. The main issue considered in this paper is whether gender differences in choices, especially with respect to the family and household, are indeed responsible for the gender pay gap, or whether discrimination plays a role. On balance, the evidence indicates that sex discrimination remains a possible explanation of the unexplained gender pay gap. This is consistent with the continuing high profile sex discrimination litigation suggestive of on-going inferior treatment on the basis of sex.
{"title":"Sex Discrimination in the Labor Market","authors":"J. Hersch","doi":"10.1561/0700000007","DOIUrl":"https://doi.org/10.1561/0700000007","url":null,"abstract":"This paper examines sources of gender pay disparity and the factors that contribute to this pay gap. Many researchers question the role of discrimination and instead attribute the residual pay gap to gender differences in preferences. The main issue considered in this paper is whether gender differences in choices, especially with respect to the family and household, are indeed responsible for the gender pay gap, or whether discrimination plays a role. On balance, the evidence indicates that sex discrimination remains a possible explanation of the unexplained gender pay gap. This is consistent with the continuing high profile sex discrimination litigation suggestive of on-going inferior treatment on the basis of sex.","PeriodicalId":340204,"journal":{"name":"Vanderbilt University Law School","volume":"260 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116269992","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Telecommunications regulation has experienced a fundamental shift from rate regulation to increased reliance on compelled access, perhaps best exemplified by the Telecommunications Act of 1996's imposition of no fewer than four new access requirements. Unfortunately, each access requirement is governed by a separate set of rules for determining both the scope and the price of access. The resulting ad hoc regime has created difficult definitional problems and opportunities for regulatory arbitrage. In this article we propose a system inspired by the discipline of mathematics known as graph theory that integrates all of the different forms of access into a single analytical framework. This system separates different access regimes into five categories: (1) retail access, (2) wholesale access, (3) interconnection access, (4) platform access, and (5) unbundled access. It also provides insights into how each type of access complicates the already difficult problems of network configuration and management and introduces inefficient biases into decisions about network capacity and design. The approach we propose also provides insights into the transaction cost implications of the different types of access. Drawing on the Coasean theory of the firm, our approach examines the tradeoffs between internal governance costs and the external transaction costs of providing access to offer a theory of network boundaries. This framework shows how access regulation distorts networks' natural boundaries and provides a basis for evaluating whether private ordering through markets would lead to more efficient network design.
电信监管经历了从费率监管到越来越依赖强制接入的根本性转变，也许最好的例子是1996年《电信法》(Telecommunications Act of 1996)强加了不少于四项新的接入要求。不幸的是，每个访问需求都由一组单独的规则控制，用于确定访问的范围和价格。由此产生的临时机制造成了难以界定的问题，并为监管套利创造了机会。在这篇文章中，我们提出了一个被称为图论的数学学科启发的系统，它将所有不同形式的访问集成到一个单一的分析框架中。该系统将不同的接入机制分为五类:(1)零售接入，(2)批发接入，(3)互联接入，(4)平台接入，(5)非捆绑接入。本文还深入介绍了每种类型的访问如何使本已困难的网络配置和管理问题复杂化，并在有关网络容量和设计的决策中引入了低效的偏差。我们提出的方法还提供了对不同类型访问的交易成本含义的见解。利用科斯公司理论，我们的方法考察了内部治理成本和提供访问的外部交易成本之间的权衡，从而提出了网络边界理论。该框架显示了准入监管如何扭曲网络的自然边界，并为评估通过市场进行的私人排序是否会导致更有效的网络设计提供了基础。
{"title":"Network Regulation: The Many Faces of Access","authors":"Daniel F. Spulber, C. S. Yoo","doi":"10.2139/ssrn.740297","DOIUrl":"https://doi.org/10.2139/ssrn.740297","url":null,"abstract":"Telecommunications regulation has experienced a fundamental shift from rate regulation to increased reliance on compelled access, perhaps best exemplified by the Telecommunications Act of 1996's imposition of no fewer than four new access requirements. Unfortunately, each access requirement is governed by a separate set of rules for determining both the scope and the price of access. The resulting ad hoc regime has created difficult definitional problems and opportunities for regulatory arbitrage. In this article we propose a system inspired by the discipline of mathematics known as graph theory that integrates all of the different forms of access into a single analytical framework. This system separates different access regimes into five categories: (1) retail access, (2) wholesale access, (3) interconnection access, (4) platform access, and (5) unbundled access. It also provides insights into how each type of access complicates the already difficult problems of network configuration and management and introduces inefficient biases into decisions about network capacity and design. The approach we propose also provides insights into the transaction cost implications of the different types of access. Drawing on the Coasean theory of the firm, our approach examines the tradeoffs between internal governance costs and the external transaction costs of providing access to offer a theory of network boundaries. This framework shows how access regulation distorts networks' natural boundaries and provides a basis for evaluating whether private ordering through markets would lead to more efficient network design.","PeriodicalId":340204,"journal":{"name":"Vanderbilt University Law School","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125300872","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
How does the need to signal quality through price affect equilibrium pricing and profits, when a firm faces a similarly-situated rival? In this paper, we provide a model of non-cooperative signaling by two firms that compete over a continuum of consumers. We assume "universal incomplete information;" that is, each market participant has some private information: each consumer has private information about the intensity of her preferences for the firms' respective products and each firm has private information about its own product's quality. We characterize a symmetric separating equilibrium in which each firm's price reveals its respective product quality. We focus mainly on a model in which the quality attribute is safety (so that the legal system is brought into play) and quality is unobservable due to the use of confidential settlements; a particular specification of parameters yields a common model from the industrial organization literature in which quality is interpreted as the probability that a consumer will find the good satisfactory. We show that the equilibrium prices, the difference between those prices, the associated outputs, and profits are all increasing functions of the ex ante probability of high safety. When quality is interpreted as consumer satisfaction, unobservable quality causes all prices to be distorted upward, and lowers average quality and ex ante expected social welfare, but increases ex ante expected firm profits (when either the probability of high quality or the extent of horizontal product differentiation is sufficiently high). When quality is interpreted as product safety, the foregoing results are modified in that for some parameter values ex ante expected social welfare is higher under confidentiality because such legal secrecy lowers expected litigation costs.
{"title":"Competition and Confidentiality: Signaling Quality in a Duopoly When There is Universal Private Information","authors":"A. Daughety, Jennifer F. Reinganum","doi":"10.2139/ssrn.566823","DOIUrl":"https://doi.org/10.2139/ssrn.566823","url":null,"abstract":"How does the need to signal quality through price affect equilibrium pricing and profits, when a firm faces a similarly-situated rival? In this paper, we provide a model of non-cooperative signaling by two firms that compete over a continuum of consumers. We assume \"universal incomplete information;\" that is, each market participant has some private information: each consumer has private information about the intensity of her preferences for the firms' respective products and each firm has private information about its own product's quality. We characterize a symmetric separating equilibrium in which each firm's price reveals its respective product quality. We focus mainly on a model in which the quality attribute is safety (so that the legal system is brought into play) and quality is unobservable due to the use of confidential settlements; a particular specification of parameters yields a common model from the industrial organization literature in which quality is interpreted as the probability that a consumer will find the good satisfactory. We show that the equilibrium prices, the difference between those prices, the associated outputs, and profits are all increasing functions of the ex ante probability of high safety. When quality is interpreted as consumer satisfaction, unobservable quality causes all prices to be distorted upward, and lowers average quality and ex ante expected social welfare, but increases ex ante expected firm profits (when either the probability of high quality or the extent of horizontal product differentiation is sufficiently high). When quality is interpreted as product safety, the foregoing results are modified in that for some parameter values ex ante expected social welfare is higher under confidentiality because such legal secrecy lowers expected litigation costs.","PeriodicalId":340204,"journal":{"name":"Vanderbilt University Law School","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123499283","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The traditional view of corporate law as arising from state law, with federal law in a supporting role no longer describes the post Sarbanes-Oxley world. This paper presents modern corporate governance as a collaborative process between the federal government (mostly acting through the SEC), state law (mostly acting through the Delaware courts, but also including its legislature and those in other states) and the self-regulatory organizations such as the stock exchanges. The focus is on the third source, particularly the listing requirements of the New York Stock Exchange. The Reforms announced in 2002 portend a dramatic increase in the role of the listing requirement in defining American corporate governance. The interaction between the NYSE and state and federal law is heavily tilted toward its overlap with federal law. The pattern of NYSE regulation of the last decade is that the SEC chair makes a speech or a telephone call identifying a problem, the Exchange convenes a committee of experts and proposes a solution that is sent to the SEC and the various interested parties engage the Exchange and the SEC in discussions about what the law should be. Prominent examples include requirements for independent directors, shareholder approval of stock options, audit committee procedures and one share/one vote rules. This is a different process than what occurs in state law or in direct SEC regulation and it is becoming a larger part of American corporate governance.
{"title":"Collaborative Corporate Governance: Listing Standards, State Law and Federal Regulation","authors":"R. Thompson","doi":"10.2139/SSRN.429621","DOIUrl":"https://doi.org/10.2139/SSRN.429621","url":null,"abstract":"The traditional view of corporate law as arising from state law, with federal law in a supporting role no longer describes the post Sarbanes-Oxley world. This paper presents modern corporate governance as a collaborative process between the federal government (mostly acting through the SEC), state law (mostly acting through the Delaware courts, but also including its legislature and those in other states) and the self-regulatory organizations such as the stock exchanges. The focus is on the third source, particularly the listing requirements of the New York Stock Exchange. The Reforms announced in 2002 portend a dramatic increase in the role of the listing requirement in defining American corporate governance. The interaction between the NYSE and state and federal law is heavily tilted toward its overlap with federal law. The pattern of NYSE regulation of the last decade is that the SEC chair makes a speech or a telephone call identifying a problem, the Exchange convenes a committee of experts and proposes a solution that is sent to the SEC and the various interested parties engage the Exchange and the SEC in discussions about what the law should be. Prominent examples include requirements for independent directors, shareholder approval of stock options, audit committee procedures and one share/one vote rules. This is a different process than what occurs in state law or in direct SEC regulation and it is becoming a larger part of American corporate governance.","PeriodicalId":340204,"journal":{"name":"Vanderbilt University Law School","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128937669","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Extended collective licensing. also known as extended repertoire, originated in the Nordic countries. It may be useful to accelerate the acquisition of licensing authority by Collective Management Organizations. This paper considers the pitfalls to avoid and the international legal context.
{"title":"Application of an Extended Collective Licensing Regime in Canada: Principles and Issues Related to Implementation","authors":"D. Gervais","doi":"10.2139/SSRN.1920391","DOIUrl":"https://doi.org/10.2139/SSRN.1920391","url":null,"abstract":"Extended collective licensing. also known as extended repertoire, originated in the Nordic countries. It may be useful to accelerate the acquisition of licensing authority by Collective Management Organizations. This paper considers the pitfalls to avoid and the international legal context.","PeriodicalId":340204,"journal":{"name":"Vanderbilt University Law School","volume":"147 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121100864","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Federal securities law and enforcement via securities fraud class actions today has become the most visible presence in regulating corporate governance. State law, long at center stage in discussions of corporate governance, continues to provide the legal skeleton for the corporate form and state fiduciary duty litigation continues as a frequent means to monitor managers. Yet, in today's world, state law does so almost entirely in the specific contexts of decisions about acquisitions or in self-dealing transactions. The empirical evidence in this Article illustrates that corporate governance outside of these areas has passed to federal law and in particular to shareholder litigation under Rule 10b-5. The Sarbanes-Oxley Act of 2002, passed by Congress in the wake of the current corporate accountability scandals, provides new evidence of the expanded role of federal law. But, the move to federal corporate governance is broader than that law and has a longer history than the current scandals. The ascendancy of federal law in corporate governance reflects at least three factors. First, disclosure has become the most important method to regulate corporate managers and disclosure has been predominantly a federal, not a state, methodology. Second, state law has focused largely on the duties and liabilities of directors, and not officers, and federal law has increasingly occupied the space defining the duties and liabilities of officers. Officers have become the fulcrum of governance in today's corporations. Third, federal shareholder litigation based on securities fraud has several practical advantages over state shareholder litigation based on fiduciary duty that have contributed to the greater use of the federal forum. As a result of these trends, federal law now occupies the largest part of the legal corporate governance infrastructure in the 21st century. The outpouring of suggested reforms that have followed in the wake of Enron and WorldCom have focused on federal law and on the conduct of officers and directors, rather than state law, which in practice, focuses mainly on directors. Indeed, the discussions about reforms have excluded state law almost entirely. In this article, we develop the idea of federal law as corporate governance in three parts organized around history, empirical data, and analysis. In Part I, we begin with the traditional legal template. State corporate law is the focus and federal securities law plays a supporting role. In Part II, we present empirical data on the use of both federal and state litigation to regulate corporate governance. We begin with a data set we have developed of securities fraud class action complaints filed in 1999. Our analysis of those complaints shows that securities fraud class action litigation is being used mostly in areas that relate to the managers' operation of the business. Not surprisingly, for example, many of the complaints raise concerns about the ways in which managers have recognized re
{"title":"Securities Fraud as Corporate Governance: Reflections Upon Federalism","authors":"R. Thompson, Hillary A. Sale","doi":"10.2139/SSRN.362860","DOIUrl":"https://doi.org/10.2139/SSRN.362860","url":null,"abstract":"Federal securities law and enforcement via securities fraud class actions today has become the most visible presence in regulating corporate governance. State law, long at center stage in discussions of corporate governance, continues to provide the legal skeleton for the corporate form and state fiduciary duty litigation continues as a frequent means to monitor managers. Yet, in today's world, state law does so almost entirely in the specific contexts of decisions about acquisitions or in self-dealing transactions. The empirical evidence in this Article illustrates that corporate governance outside of these areas has passed to federal law and in particular to shareholder litigation under Rule 10b-5. The Sarbanes-Oxley Act of 2002, passed by Congress in the wake of the current corporate accountability scandals, provides new evidence of the expanded role of federal law. But, the move to federal corporate governance is broader than that law and has a longer history than the current scandals. The ascendancy of federal law in corporate governance reflects at least three factors. First, disclosure has become the most important method to regulate corporate managers and disclosure has been predominantly a federal, not a state, methodology. Second, state law has focused largely on the duties and liabilities of directors, and not officers, and federal law has increasingly occupied the space defining the duties and liabilities of officers. Officers have become the fulcrum of governance in today's corporations. Third, federal shareholder litigation based on securities fraud has several practical advantages over state shareholder litigation based on fiduciary duty that have contributed to the greater use of the federal forum. As a result of these trends, federal law now occupies the largest part of the legal corporate governance infrastructure in the 21st century. The outpouring of suggested reforms that have followed in the wake of Enron and WorldCom have focused on federal law and on the conduct of officers and directors, rather than state law, which in practice, focuses mainly on directors. Indeed, the discussions about reforms have excluded state law almost entirely. In this article, we develop the idea of federal law as corporate governance in three parts organized around history, empirical data, and analysis. In Part I, we begin with the traditional legal template. State corporate law is the focus and federal securities law plays a supporting role. In Part II, we present empirical data on the use of both federal and state litigation to regulate corporate governance. We begin with a data set we have developed of securities fraud class action complaints filed in 1999. Our analysis of those complaints shows that securities fraud class action litigation is being used mostly in areas that relate to the managers' operation of the business. Not surprisingly, for example, many of the complaints raise concerns about the ways in which managers have recognized re","PeriodicalId":340204,"journal":{"name":"Vanderbilt University Law School","volume":"56 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126603431","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Recent mergers and academic commentary have placed renewed focus on what has long been one of the central issues in media policy: whether media conglomerates can use vertical integration to harm competition. This Article seeks to move past previous studies, which have explored limited aspects of this issue, and apply the full sweep of modern economic theory to evaluate the regulation of vertical integration in media-related industries. It does so initially by applying the basic static efficiency analyses of vertical integration developed under the Chicago and post-Chicago Schools of antitrust law and economics to three industries: broadcasting, cable television, and cable modem systems. An analysis of the market structure of these industries reveals that the preconditions recognized by both Schools as necessary for vertical integration to harm competition do not exist. In addition, the cost structure of these industries suggests that vertical integration may well lead to efficiencies sufficient to justify allowing such integration to occur. A dynamic efficiency analysis also suggests that attempts to regulate vertical integration in these industries are probably misguided. Growing reliance on compelled access to redress the problems purportedly caused by vertical integration threatens to dampen investment incentives in technologically dynamic industries in which such incentives are particularly important. Not only does forcing a monopolist to share an input deviate from the system of well-defined property rights needed to promote efficient levels of investment, it also deprives new entrants seeking to compete directly with the supposed monopoly bottleneck of their natural strategic partners. The Article also engages a complex web of arguments involving the extent to which technological innovation is affected by market concentration, standardization, and network externalities. A close review of the economic literature reveals that the relationship between these factors is too ambiguous to support the type of simple policy inference needed to prohibit vertical integration as a regulatory matter. The Article concludes with an analysis of the intellectual and institutional obstacles for adopting a more integrated economic approach to vertical integration in these industries.
{"title":"Vertical Integration and Media Regulation in the New Economy","authors":"C. S. Yoo","doi":"10.2139/SSRN.319122","DOIUrl":"https://doi.org/10.2139/SSRN.319122","url":null,"abstract":"Recent mergers and academic commentary have placed renewed focus on what has long been one of the central issues in media policy: whether media conglomerates can use vertical integration to harm competition. This Article seeks to move past previous studies, which have explored limited aspects of this issue, and apply the full sweep of modern economic theory to evaluate the regulation of vertical integration in media-related industries. It does so initially by applying the basic static efficiency analyses of vertical integration developed under the Chicago and post-Chicago Schools of antitrust law and economics to three industries: broadcasting, cable television, and cable modem systems. An analysis of the market structure of these industries reveals that the preconditions recognized by both Schools as necessary for vertical integration to harm competition do not exist. In addition, the cost structure of these industries suggests that vertical integration may well lead to efficiencies sufficient to justify allowing such integration to occur. A dynamic efficiency analysis also suggests that attempts to regulate vertical integration in these industries are probably misguided. Growing reliance on compelled access to redress the problems purportedly caused by vertical integration threatens to dampen investment incentives in technologically dynamic industries in which such incentives are particularly important. Not only does forcing a monopolist to share an input deviate from the system of well-defined property rights needed to promote efficient levels of investment, it also deprives new entrants seeking to compete directly with the supposed monopoly bottleneck of their natural strategic partners. The Article also engages a complex web of arguments involving the extent to which technological innovation is affected by market concentration, standardization, and network externalities. A close review of the economic literature reveals that the relationship between these factors is too ambiguous to support the type of simple policy inference needed to prohibit vertical integration as a regulatory matter. The Article concludes with an analysis of the intellectual and institutional obstacles for adopting a more integrated economic approach to vertical integration in these industries.","PeriodicalId":340204,"journal":{"name":"Vanderbilt University Law School","volume":"59 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116711400","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Labor unions are aggressively using their ownership power to push corporate-governance reforms. So far, much of their activity is tactical. Lasting changes in corporate governance can occur if unions develop a more strategic model of their role in corporate governance. A stretegic model would require unions to concentrate on areas where their interests coincide with other shareholders and where they can demonstrte that their actions will increase firm value. This requires that labor unions adopt a platform of maximizing long-term growth for shareholders and other stakeholders, as well as for themselves. In particular, unions must convince other shareholders that they are acting in areas where they have an informational advantage about the corporation's and management's operations. If labor can demonstrate to other sharholders that it is using its monitoring advantagaes to take actions to increase firm value by policing management shirking and reducing the agency costs of equity, then other shareholders will be more willing to follow its lead in future voting initiatives. This opens up the possibility that labor union shareholders could reinvigorate some currently ineffectual corporate-governance systems. These might include the policing of securities fraud and other types of corporate misconduct through the use of existing litigation techniques.
{"title":"Realigning Corporate Governance: Shareholder Activism by Labor Unions","authors":"Stewart J. Schwab, Randall S. Thomas","doi":"10.2139/SSRN.1729348","DOIUrl":"https://doi.org/10.2139/SSRN.1729348","url":null,"abstract":"Labor unions are aggressively using their ownership power to push corporate-governance reforms. So far, much of their activity is tactical. Lasting changes in corporate governance can occur if unions develop a more strategic model of their role in corporate governance. A stretegic model would require unions to concentrate on areas where their interests coincide with other shareholders and where they can demonstrte that their actions will increase firm value. This requires that labor unions adopt a platform of maximizing long-term growth for shareholders and other stakeholders, as well as for themselves. In particular, unions must convince other shareholders that they are acting in areas where they have an informational advantage about the corporation's and management's operations. If labor can demonstrate to other sharholders that it is using its monitoring advantagaes to take actions to increase firm value by policing management shirking and reducing the agency costs of equity, then other shareholders will be more willing to follow its lead in future voting initiatives. This opens up the possibility that labor union shareholders could reinvigorate some currently ineffectual corporate-governance systems. These might include the policing of securities fraud and other types of corporate misconduct through the use of existing litigation techniques.","PeriodicalId":340204,"journal":{"name":"Vanderbilt University Law School","volume":"28 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1993-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129022913","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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