‘What makes for prize-winning television?’

The CCP’s Spring seminar series continues on Friday 28th June as we welcome Chris Hanretty (CCP and PSI) who will be asking ‘What makes for prize-winning television?‘ The seminar presents findings from Chris’ collaborative research with Sara Connolly, Shaun Hargreaves-Heap and John Street. An abstract for his seminar can be found below.

Abstract

We investigate the determinants of success in four international television awards festivals between 1994 and 2012. We find that countries with larger markets and greater expenditure on public broadcasting tend to win more awards, but that the degree of concentration in the market and rates of penetration of pay-per-view television are unrelated to success. These findings are consistent with general industrial organisation literature on quality and market size, and with media policy literature on public service broadcasting acting as a force for quality. However, we also find that ‘home countries’ enjoy a strong advantage in these festivals, which is not consistent with festival success acting as a pure proxy for television quality.

Policy Briefing: The Impact of Competition Policy – What are the Known Unknowns?

BACKGROUND

Evaluations of competition policy are increasingly common and typically establish that the consumer benefits from detected cases easily outweigh the costs of competition authorities.

These assessments are often driven by data availability and only capture a small part of the total impact of competition policy because they sidestep the difficult issue of how to evaluate those cases that go unobserved because they are deterred. Assessments also ignore a second class of unobserved cases, those involving anti-competitive harm but which the competition authority fails to detect.

METHODOLOGY

The authors present a broader conceptual framework for the evaluation of competition policy which takes into account the deterred and undetected cases as well as those which are detected.

The analysis draws on stylised facts from existing academic and policy literatures, alongside what it is reasonable to infer from theory about what is not known, in particular, the nature of the underlying population of potential cases, and how samples are drawn from it, in the form of cases detected by the competition authority.

Numerical simulations are conducted within this framework.

KEY FINDINGS

The simulations suggest that, while the benefits of deterrence, especially for merger enforcement, are considerable, it is also likely that considerable harm may remain unremedied due to the non-detection of cartels.

Drawing on insights from economic theory, the authors argue that selection bias is likely to be substantial because the unobserved cases could well be those which are the most harmful. If so, the deterrence of anti-competitive mergers may have a much greater positive impact, but the effects of non-detected cartels may be more serious than is usually supposed.

FOR MORE INFORMATION

The full working paper 13-7 and more information about CCP and its research is available from our website: http://www.competitionpolicy.ac.uk

ABOUT THE AUTHORS

Peter Ormosi is a Lecturer in Norwich Business School and member of the ESRC Centre for Competition Policy

Stephen Davies is Professor of Economics in the School of Economics at UEA and member of the ESRC Centre for Competition Policy.

Policy Brief: Product Quality and Business Contracts – Intermediary Crude Oil Pricing in a Southwest-US

BACKGROUND

Crude oil plays an important role in the world economy. In the US, domestic oil production has increased, and increased in importance, and this holds the prospect of fundamentally changing the balance of power in the world crude market. This is turn lends importance to the determinants of performance in the US submarket of the world oil market.

There are four modes of transportation for US domestic crude oil: water tanker, pipelines, railways and motor transport. Pipeline is the predominant form but, for nearly two decades, motor transportation has continuously gained in importance.

METHODOLOGY

The authors study upstream and downstream prices, and the profit margin of crude oil, for the period 2007-08 in a Southwest-US regional crude oil intermediary market, where oil is transported by motor vehicle.

The analysis draws on a proprietary dataset from an intermediary firm that buys crude oil from well owners and transports it by motor vehicle to downstream buyers that are mostly oil refineries.

The authors estimate panel hedonic models to analyse (i) the effects of geographic variables, (ii) the characteristics of bilateral business deals between an intermediary and their upstream and downstream trading partners, and (iii) the quality components of the crude oil on prices and margins.

KEY FINDINGS

The analyses show that crude oil prices in this market may depend, not only on the market valuation of oil quality, but also on other transaction characteristics such as distance and business contracts.

In line with existing results, the authors find significant effects of quality components, such as basic sediment and water, sulphur content, and specific gravity, on buying and selling prices and on the profit margin, but only the effect of specific gravity is nonlinear.

FOR MORE INFORMATION

The full working paper 13-6 and more information about CCP and its research is available from our website: http://www.competitionpolicy.ac.uk

ABOUT THE AUTHORS

Subhasish M. Chowdhury is a Lecturer in Economics at the Centre for Behavioural and Experimental Social Science, and ESRC Centre for Competition Policy, University of East Anglia

Oindrila De, works in the Economics Area, Indian Institute of Management Indore

Stephan Martin is Professor of Economics at Purdue University,West Lafayette.

Policy Brief: Public and Private Enforcement of Competition Law

BACKGROUND

Most competition law enforcement systems are based on two enforcement pillars: public enforcement and private enforcement. Public enforcement means that antitrust rules are enforced by state authorities. Private enforcement refers to individually initiated litigation, either as stand-alone or follow-on action, before a court to remedy an infringement of antitrust law. Private enforcement is often treated as something new or at least only marginally important in Europe, but it has been the driving force of US antitrust enforcement since the middle of the 20th century. The European Commission published a Green Paper in 2005 and a White Paper in 2008 to incentivise private damages actions and remove perceived obstacles for victims of anticompetitive conduct.

METHODOLOGY

The authors develop a framework which takes into account the usefulness of each enforcement mode contingent on the type of anticompetitive conduct: horizontal agreements, vertical agreements and abuses of a dominant position. Several central determinants of an optimal enforcement mix are identified and characterised. These determine the value of the public and private modes in enforcing different antitrust laws.

KEY FINDINGS

A combination of public and private enforcement is likely to increase the benefits of competition law enforcement compared to the implementation of either a pure public or a pure private enforcement strategy. The costs and benefits for public and private enforcement actions may differ depending on the type of infringement.

With respect to horizontal agreements, public enforcement has to play the leading role due to the difficulties in detection and information gathering by private parties.

With respect to vertical agreements, the information possession and gathering advantages of private parties should lead to a more prominent role for private enforcement.

With respect to abuses of a dominant position, public enforcement should play the leading role as long as the victim does not have direct dealings with the infringer.

POLICY ISSUES

It is crucial to the design of an optimal competition law enforcement system to assess the incremental costs and benefits when private enforcement activities are added to an existing public enforcement system. Once the parameters for an optimal enforcement system are determined, policy makers can choose those effective legal mechanisms which will provide the incentives for public and private actors to take on the infringement they are respectively best suited to deal with.

FOR MORE INFORMATION

The full working paper 13-5 and more information about and more information about CCP and its research is available from our website: www.competitionpolicy.ac.uk

ABOUT THE AUTHORS

Kai Hüschelrath is Head, Competition and Regulation Research Group, ZEW Centre for European Economic Research, Coordinator, Mannheim Centre for Competition and Innovation and Assistant Professor, Industrial Organization and Competitive Strategy, WHU Otto Beisheim School of Management

Sebastian Peyer is a Post Doctoral Research Fellow, Centre for Competition Policy (CCP), University of East Anglia.

Live comments from the CCP Summer Conference 2013

This brings us to the end of this year’s CCP Summer Conference. It has been an exciting two days discussing importance issues on institutions in competition policy and their recent reforms.

We hope that you have enjoyed it and join us next year again.

Live comments from the CCP Summer Conference 2013

Sean Ennis (OECD) examines how the prioritisation of competition law and policy in emerging economies differs to developed economies due to the fundamentally different economic challenges that emerging economies face. He highlighted these differences by looking at World Bank data on GDP, percentage of poverty, income and access to finance. Also the rule of law, level of corruption and the regulatory environment has an impact. Generally one have to adopt competition policy to the local conditions (e.g. market shares, no effects analysis, changed burden of proof for certain elements of a case).

Live comments from the CCP Summer Conference 2013

Hassan Qaqaya (UNCTAD) dicsussed the problems and the effectiveness of competition policy in emerging economies. Problems can arise from the initial economic and social conditions, including the inadequacy of physical as well as institutional business infrastructure and insufficiently informed and organised civil societies. Emerging economies might need assistance in framing effective competition policies. Some younger competition agencies have the necessary budget but not the powers to enforce competition law against cartels. It is essential for emerging economies not only to create a comprehensive competition policy but a conducive economic environment to spur entrepreneurship and growth.

Live comments from the CCP Summer Conference 2013

Jacques Steenbergen (Leuven, Belgian Competition Authority) discussed the relative merits of inquisitorial and prosecutorial models in the design of institutions for competition policy focussing on the independence and efficiencies of the respective models. He comes to the conclusion that there is no one-size-fits-all model. It all depends on the present legal culture.  The prosecutorial model requires an appropriate court or tribunal whereas in the inquisitorial model the investigation and decision powers should be separated. However there are several ways to achieve this goal.

Live comments from the CCP Summer Conference 2013

Peter Freeman (CAT) advocates for judicial review of competition cases by a specialist competition tribunal such as the CAT as opposed to general courts. He highlighted the advantageous features of a specialised tribunal including. The court needs to have the expertise and experience to hear economic evidence. A specialised court is also speedier than in front of a general court. Flexible procedures tailored to competition cases are also beneficial  He especially emphasises that the independence of such a tribunal is paramount. However, this independence could be threatened if government regards the tribunal simply as part of the competition system rather than a court upholding the law.

Live comments from the CCP Summer Conference 2013

Alex Chisholm (UK CMA) provides interesting insights into the institutional reform in the UK and the new UK Competition and Markets Authority. He is currently is addressing the key questions of

  • Why now?
  • Why like this?
  • So what?

He generously provides us with a copy of his speech later which we will be allowed to post on this blog later today.