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Prior research on the structure‐performance relationship has not investigated all of the relevant relationships among market structure, profits, prices, and explicitly calculated measures of firm efficiency. This paper replicates the four approaches in the literature, adds several innovations, and applies the analysis to banking data. We find more support for the structure‐conduct‐performance hypothesis than for the relative‐market‐power and efficient‐structure hypotheses, although the data are not fully consistent with any of these theories. We also find support for Hick's quiet‐life hypothesis, which implies that firms with market power adhere less rigorously to efficiency maximization. J.E.L. Classification Numbers G21, G28, L41, L89 The opinions expressed do not necessarily reflect those of the Board of Governors or its staff. The authors thank Dean Amel, Jim Berkovec, Myron Kwast, Nellie Liang, LenNakamura, Steve Rhoades, and participants in the meeting of the Federal Reserve System Committee on Financial Structure and Regulation for helpful comments, and Ken Cavalluzzo, Jalal Akhavein, John Leusner, and Seth Bonime for outstanding research assistance.

Purpose – The author investigates how those who have engaged in political violence in the UK understand Prevent’s preemptive rationality, and how Prevent conceptualizes the trajectory toward “terrorism” in relation to the testimony of those who have engaged in “terrorist” violence and were convicted of terrorism offences.

Methodology/Approach – The author takes the assumptions that Prevent makes about risk (from the Prevent Strategy and other documents), and tests these against the testimony of former combatants from “the Troubles.”

Findings – Despite the trajectory toward violence not being considered to differ fundamentally nor demonstrated through evidence to operate differently from one era to the next, the premise of Prevent’s assumptions of the movement into violence and former combatant testimony are entirely foreign to each other.

Originality/Value – Although militants from “the Troubles” (a conflict ending in 1998) and Prevent (established in 2003) are speaking about the same country and narrating their “truth” within five years of each other, the differences in how former combatants and Prevent understand the trajectory toward violence have not been considered. This has remained a significant omission of terrorism scholarship.

John Kwoka’s Mergers, Merger Control, and Remedies is a meta-analysis of “retrospective” academic studies of consummated mergers and other horizontal arrangements. Based on this meta-analysis, Kwoka strongly criticizes federal enforcement policies, claiming that the agencies permit far too many anticompetitive mergers to go unchallenged, and are far too willing to accept remedies that fail to prevent a significant loss of competition. Kwoka claims further that this excessive leniency is the culmination of a trend reflecting deliberate policy choices made over the last several decades.

In a forthcoming critique, Vita and Osinski challenge Kwoka’s analysis and his conclusions, identifying serious flaws in the size, construction, and composition of his sample, and in the statistical analysis of the data drawn from that sample. In a published response to Vita and Osinski, Professor Kwoka offers a number of objections and counter-arguments. In this rejoinder, I respond to Professor Kwoka.

Mergers and acquisitions in the transportation sector are typically explained as attempts to capture economies of scale and scope through shared infrastructure and related cost-saving measures. In the airline industry, the past 15 years have seen an increasing number of international mergers and acquisitions that would have been blocked under prior regulatory regimes. This activity suggests that there are indeed gains from increasing airline size.

Such gains may be largely financial in nature. One benefit to a merged airline could be greater market power over particular routes and hubs after merger, as well as improved contract structure and bargaining power in operations, although greater de-regulation and more competition internationally makes these arguments less compelling. In many cases, gains may be unique to specific airlines or operational situations. Thus, the issue addressed in this chapter is whether, in general, increasing the size or scope of airline operations enables them to function more efficiently and whether this effect is sustained across all sizes of airline. More pointedly, the chapter examines whether there exist measurable efficiency gains that can help explain the variety of mergers and acquisitions in the industry.

This paper investigates the impact of refusal to deal by a monopoly supplier of an essential input on firms’ investments in product quality, consumer surplus, and net social welfare.

The paper uses a standard economic model of endogenous quality choice for horizontally differentiated products to compare market performance with and without refusal do deal.

Refusal to deal increases the payoff of the integrated firm and reduces equilibrium investment in quality, consumer surplus, and net social welfare if varieties are moderate or good substitutes. If varieties are poor substitutes, the integrated firm maximizes its payoff setting a wholesale price that allows the downstream rival a small economic profit.

The analysis presented here implies that it is actual rivalry in the development of high-quality substitute varieties that promotes consumer welfare, and that such rivalry is ill served by the exercise of market power in input markets and by the refusal of vertically integrated upstream firms to deal with their nonintegrated downstream rivals. Reliance on the lure of monopoly profit to get good market performance is misplaced.

After more than three decades of research and legal cases pursued by the European Commission (EC) and national regulators, interchange fees for four-party consumer card transactions are capped on December 9, 2015 across the European Union (EU). Since then, the development of card scheme fees has been a raising concern for merchants. Due to their nature, these fees have not been dealt with in research or covered by the Interchange Fee Regulation (IFR). This chapter aims to assess the recent development of card scheme fees within four-party card payment networks by relying on survey data obtained from 104 merchants across the EU. Findings show that for half of the merchant population card scheme fees have increased since the regulation. Further concerns related to transparency of fees, pass-through of savings to retailers and subsequently consumers, and the development of commercial cards are discussed. In light of the EC's scheduled review of the impacts of the policy intervention in 2019 (Article 17 of the IFR), this chapter evaluates alternative arrangements for the setting of card scheme fees with a focus on the legal basis for a potential regulation. Findings shall provide a ground for further interaction between academics, practitioners, and policymakers.

The purpose of this paper is to understand why managers, internal auditors and compliance staff (in financial firms specifically and using Malaysia as a concrete example) can want to ignore compliance-related legislation (a law on anticompetitive behaviour in this case).

The authors review, discuss and critique the literature on compliance and institutions in the light of existing data from Malaysia’s financial industry (literally confronting theory with data).

Legislative design can actually encourage managers and their auditors disobey/ignore the law for reasons which previous theories cannot explain.

This research does not use the regression techniques in vogue now. The findings, nevertheless, imply that attempts to explain phenomenon in management auditing should start with the laws governing managerial activity.

Auditors may use the methods used in this study to assess the extent to which financial services firms’ managers have incentives to comply with laws. Similarly, this research can quantify the extent to which internal auditors in these firms have incentives to find untoward conduct.

Poorly designed laws affecting managerial auditing derive from pre-existing social relationships, as well as help shape them (as shown using data). Identifying areas of non-compliance may actually signal deeper problems in the way businessmen and lawmakers make and enforce laws requiring compliance and self-assessment.

The authors know of no study looking at the economic incentives driving internal auditors’ behaviour – particularly in the area of antitrust. They show how law shapes management and auditors’ incentives, quantify these incentives and show how/why previous research fails to explain these incentives.

The paper aims to discuss the expected changes 5G will bring to the assessment of active mobile network sharing agreements from a competition policy point of view.

The paper distinguishes between current, early 5G networks and the fully-fledged 5G envisioned for the future, then focuses on the main competition concerns where 5G may bring the most significant changes in the evaluation compared to 4G.

The authors find that while network sharing for early 5G can be evaluated in a similar way to previous generations, fully-fledged 5G can raise new issues. The authors predict these main concerns to be service differentiation, cost commonality between the parties and the parties’ ability and incentives to grant access to critical inputs to downstream competitors. Due to the huge costs of 5G rollout, network sharing is set to become even more widespread than before. For each of the concerns, the authors show that they are not easy to substantiate and they may even become less serious than under 4G.

To the best of the authors’ knowledge, this paper is one of the first contributions to analyse the impact of fully-fledged 5G on mobile network sharing agreements’ competitive assessment.

What is the reaction to education by correspondence? Some know little or nothing about it. Others are resentfully critical of a form of education which they regard as unnecessary and which attracts students away from the face‐to‐face tuition which they could receive in college. There are also those who reflect gratefully on the help and guidance they have received from correspondence colleges in acquiring professional and academic qualifications or cultural interests which have made a great difference to their prospects and satisfaction in life. Whatever the reaction of individuals may be, it is not sufficiently realised that education by correspondence is a major educational activity in this country.

Under this heading are published regularly abstracts of all Reports and Memoranda of the Aeronautical Research Council, Technical Reports and Translations of the United States National Aeronautics and Space Administration and publications of other similar Research Bodies as issued.