Competition Policy: History, Objectives, and the Law Introduction Brief History of Competition Policy Anti-Trust Law in the United States Competition Laws in the European Union Objectives of Competition Policy and Other Public Policies Objectives of Competition Policy Other Public Policy Factors Affecting Competition. Competition Policy: A Definition The Main Features of European Competition Law Article 81: Horizontal and Vertical Agreements Article 82: Abuse of a Dominant Position Mergers Market Power and Welfare: Introduction Overview of the Chapter Allocative Efficiency Market Power: A Definition The Allocative Inefficiency of a Monopoly Rent-Seeking Activities Productive Efficiency Additional Welfare Loss from Productive Inefficiency Why Is a Monopolist Less Efficient? Number of Firms and Welfare 2.3.4 Conclusions Competition and Productive Efficiency Dynamic Efficiency The Lower Incentives to Monopolist Innovation Incentives to lnvest in R&D Models of Competition and Innovation Public Policies and Incentives to Innovate Ex Ante y. Ex Post: Property Rights Protection Essential Facilities Price Controls and Structural Remedies Internal y. External Growth Monopoly: Will the Market Fix it Al!? Durable Good Monopolist Contestable Markets Monopoly and Free Entry Summary and Policy Conclusions Exercises Solutions to Exercises Market Definition and the Assessment of Market Power Introduction Market Definition Product Market Definition Geographic Market Definition The Assessment of Market Power Traditional Approach: (Indirect) Assessment of Market Power Econometric Techniques: (Direct) Assessment of Market Power* Collusion and Horizontal Agreements What is Collusion? Factors That Facilitate Collusion Structural Factors Price Transparency and Exchange of Information Pricing Rules and Contracts Analysis of Collusion: Conclusions Factors That Facilitate Collusion Advanced Material** Credibility of Punishment and Optimal Penal Codes Cartels and Renegotiation** The Green — Porter (1984) Model** Symmetry and Collusion* Practice: What Should Be Legal and What Illegal? Standards of Proof: Market Data y. Hard Evidence Ex Ante Competition Policies against Collusion Ex Post Competition Policies against Collusion Joint-Ventures and Other Horizontal Agreements Joint-Ventures Research Joint-Ventures Other Forms of Co-Operation Regarding Technology Co-Operative R&D* A Case of Parallel Behavior: Wood pulp Horizontal Mergers Unilateral Effects Absent Efficiencies, a Merger Increases Market Power Variables Which Affect Unilateral Market Power Efficiency Gains Modelling Unilateral Effects of Mergers* Pro-Collusive Effects Factors which Affect Collusion (Reminder) Efficiency Gains and Pro-Collusive Effects A More General Model The Model Unilateral Effects, without Efficiency Gains Efficiency Gains from Mergers Efficiency Offence: When the Merger Leads to the Exit of the Outsiders Proofs Merger Remedies Divestitures Behavioral Remedies Merger Policy in the European Union Dominance Test The Treatment of Efficiency Gains How to Proceed in Merger Cases Nestlé/Perrier ABB/Daimler-Benz Vertical Restraints and Vertical Mergers What are Vertical Restraints? Intra-Brand Competition Double Marginalisation Horizontal Externality: Free-Riding in the Provision of Services A More General Treatment Other Efficiency Reasons for Vertical Restraints and Vertical Mergers Vertical Restraints, Vertical Mergers, and the Commitment Problem Conclusions lnter-Brand Competition Strategic Effects of Vertical Restraints Vertical Restraints as Collusive Devices Anti-Competitive Effects: Leverage and Foreclosure Anti-Competitive Effects: Exclusive Dealing Exclusionary Effects of Vertical Mergers Conclusions and Policy implications Cases General Electric/Honeywell Ice-Cream Predation, Monopolisatíon, and Other Abusive Practices Introduction Predatory Pricing Predation: Search for a Theory Recent Theories of Predatory Pricing Models of Predatory Pricing Practice: How to Deal with Predatory Pricing Allegations Non-Price Monopolisation Practices Strategic Investments Bundling and Tying Incompatibility and Other Strategic Behaviour in Network Industries Refusal to Supply and Exclusive Contracts (Reminder) Raising Rivals’’ Costs Price Discrimination Welfare Effects of Price Discrimination Price Discrimination 7,5 US y. Microsoft A Short Description of the Case Monopolisation Attempted Monopolisation Tying Remedies Conclusions The District Court Judgment on Remedies A Toolldt: Game Theory and Imperfect Competition Models Monopoly Single-Product Monopoly Multi-Product Monopoly An Introduction to Elementary Game Theory Nash Equilibrium Dynamic Games and Sub-Game Perfect Nash Equilibrium Oligopoly 1: Market Competition in Static Games Product Market Competition with Homogenous Goods Product Market Competition with (Exogenously) Differentiated Goods Repeated Product Market Interaction Oligopoly 11: Dynamic Games Strategic Investments