They can (and do). What's the cost?Quote:
Originally Posted by CoccoBill
Printable View
They can (and do). What's the cost?Quote:
Originally Posted by CoccoBill
Nobody seems to know, but without a doubt there are some, depending on how the regulations are implemented. According to research it does seem though that at least in the US and the Netherlands the benefits outweigh the costs:
"The analysis showed, first, that competition is typically desirable. Second, it was found that without antitrust policy, firms could and would (permanently) exercise market power to the detriment of overall welfare as well as consumer welfare.
Subsequently, an estimation of the costs and benefits of antitrust enforcement suggested - at least for the United States and the Netherlands - that the realised benefits overtop the realised costs by far as long as overcharges/redistribution effects and deadweight losses are considered as welfare loss. However, under a total welfare approach, only the avoidance of deadweight losses can be considered as benefit of antitrust policy and then, the benefits estimated for cartel and merger enforcement under a disaggregate approach weren’t able to cover the derived cost estimate for the United States and the Netherlands. However, it should be kept in mind that the deterrence effect as an important benefit of antitrust laws and enforcement didn’t enter the quantification. Generally, it has to be reminded that some cost and benefit components can hardly be measured with satisfactory accuracy."
http://ftp.zew.de/pub/zew-docs/dp/dp08107.pdf
Conclusions on page 35.
Quantification is limited to modeling that shows a portion of effects.Quote:
Originally Posted by CoccoBill
He does a good job of showing the effects when modeling a slice of the whole.Quote:
but without a doubt there are some, depending on how the regulations are implemented. According to research it does seem though that at least in the US and the Netherlands the benefits outweigh the costs:
"The analysis showed, first, that competition is typically desirable. Second, it was found that without antitrust policy, firms could and would (permanently) exercise market power to the detriment of overall welfare as well as consumer welfare.
Subsequently, an estimation of the costs and benefits of antitrust enforcement suggested - at least for the United States and the Netherlands - that the realised benefits overtop the realised costs by far as long as overcharges/redistribution effects and deadweight losses are considered as welfare loss. However, under a total welfare approach, only the avoidance of deadweight losses can be considered as benefit of antitrust policy and then, the benefits estimated for cartel and merger enforcement under a disaggregate approach weren’t able to cover the derived cost estimate for the United States and the Netherlands. However, it should be kept in mind that the deterrence effect as an important benefit of antitrust laws and enforcement didn’t enter the quantification. Generally, it has to be reminded that some cost and benefit components can hardly be measured with satisfactory accuracy."
http://ftp.zew.de/pub/zew-docs/dp/dp08107.pdf
Conclusions on page 35.
Thanks. That was fun. I haven't seen the phrase deadweight loss in a while.
What variables not included in that model can you think of?
After 7 beers not a single one. :(
Perhaps finding ones that adjust for how peoples' behaviors change over time when there exists firms with the kind of market power that antitrust laws are made for.
Can you think of any situations where peoples' behaviors haven't or couldn't have changed?
Coercion tends to qualify for that.
True. What about not having viable options?
Our vast landscape of amazing goods and services is built on what looks like lack of viable options at first.
Should I interpret that as to mean the Atlantic article was all wrong, the prices actually aren't higher in the US, or that they'll be fixed by the markets soon?
The Atlantic article appears solid. Nobody can quantify the cost of antitrust regulation.
What we can do is qualify how goods and services grow and change.