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Book part
Publication date: 24 May 2021

Dennis L. Weisman and Soheil R. Nadimi

We examine a setting in which a vertically integrated provider (VIP) initially has a duty to deal with an independent rival at unregulated upstream and downstream prices…

Abstract

We examine a setting in which a vertically integrated provider (VIP) initially has a duty to deal with an independent rival at unregulated upstream and downstream prices. The duty to deal is subsequently terminated which enables the VIP to acquire the independent rival (or the expertise necessary to produce the rival's product) and then serve as a two-product monopolist in the downstream market. We find that the refusal to deal decreases rivalry but increases economic efficiency and is therefore presumptively “pro-competitive.” The paramount policy question concerns whether a refusal to deal that eliminates a rival and monopolizes the downstream market while increasing static efficiency should be considered a violation of Section 2 of the Sherman Act. This analysis also has implications for policies governing the unbundling of next-generation telecommunications networks.

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The Law and Economics of Patent Damages, Antitrust, and Legal Process
Type: Book
ISBN: 978-1-80071-024-5

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Book part
Publication date: 29 August 2018

Timothy J. Tardiff and Dennis L. Weisman

The competition and regulatory economics literature has developed indicators that detect whether a vertically integrated provider (VIP) is engaging in market exclusion in…

Abstract

The competition and regulatory economics literature has developed indicators that detect whether a vertically integrated provider (VIP) is engaging in market exclusion in the form of an anticompetitive price squeeze and non-price discrimination leading to sabotage of downstream competitors. Weisman integrates these indicators by developing a safe-harbor range within which a profit-maximizing VIP engages in neither form of market exclusion. Downstream retail competition that depends on the VIP’s inputs imposes upward pricing pressure on the downstream prices, with the amount of such pressure increasing as the downstream products become more homogeneous (closer substitutes). We analyze the implications of upward pricing pressure for antitrust evaluations of a duty to deal, regulatory policies mandating wholesale inputs for entrants, and vertical mergers. We find, for example, no basis to oppose a merger in which the VIP was previously required to supply inputs to rivals at unregulated prices.

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Healthcare Antitrust, Settlements, and the Federal Trade Commission
Type: Book
ISBN: 978-1-78756-599-9

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Book part
Publication date: 6 August 2014

Darren Prokop

This chapter examines the unique regulatory environment that trans-border air carriers work within. Using a U.S. perspective the concept of the bilateral air agreement is…

Abstract

This chapter examines the unique regulatory environment that trans-border air carriers work within. Using a U.S. perspective the concept of the bilateral air agreement is outlined and discussed. These agreements form the basis for how two countries decide to share their airspaces among their air carriers. The trend has been toward more liberal approaches. To explain this trend the concepts of the Freedoms of the Air and Open Skies are discussed. Other liberalization programs are also discussed; specifically, co-terminalization and cabotage. Finally, the air cargo transfer operations at Ted Stevens Anchorage International Airport are used as an example to highlight a rare example of unilateral liberalization on the part of the United States.

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The Economics of International Airline Transport
Type: Book
ISBN: 978-1-78350-639-2

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Book part
Publication date: 14 December 2018

Shinya Hanaoka

This chapter examines the issues of the low-cost carriers (LCCs) in Japan and their impact on the domestic and international aviation markets. “Genuine” LCCs, such as…

Abstract

This chapter examines the issues of the low-cost carriers (LCCs) in Japan and their impact on the domestic and international aviation markets. “Genuine” LCCs, such as Peach Aviation and Jetstar Japan, began their operations in 2012 to follow the new movement of low-cost and low-fare airlines, which are different from the “new emerging” airlines, such as Skymark and AIRDO that appeared in the late 1990s. We discuss the recent history of LCCs in Japan, the characteristics of each LCC, the competitiveness of the high-speed railway in the domestic market, the impact of open sky policies, and the contribution of inbound foreign visitors to the international passenger volume increase. As LCCs in Japan have recently begun operations, they can continue to play a significant role in the Japanese aviation market.

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Airline Economics in Asia
Type: Book
ISBN: 978-1-78754-566-3

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Book part
Publication date: 29 July 2019

Bruno S. Sergi, Elena G. Popkova, Aleksei V. Bogoviz and Julia V. Ragulina

This chapter analyzes the technological growth of the modern Russian economy through the prism of evaluating its effectiveness from the position of costs and profits. It…

Abstract

This chapter analyzes the technological growth of the modern Russian economy through the prism of evaluating its effectiveness from the position of costs and profits. It also determines the factors of this growth and develops recommendations for managing them in the interests of acceleration of rate and increase of effectiveness of technological growth of the modern Russian economy. While technological growth in Russia shows high effectiveness, the model of technological growth in Russia has its specifics, connected to the unconventional influence of a standard set of the factors on technological growth. The influence of the factor of the number of organizations that implement R&D is insignificant, and the influence of the number of personnel involved with R&D, volume of private expenditures for R&D, and the number of used leading production technologies is negative (reverse). We offer recommendations for increasing the effectiveness of technological growth of the modern Russian economy, which are connected to increase of the volume of state expenditures for R&D (recommended volume – USD 35.09, its growth as compared to 2018 constitutes 191.76%) and increase of the number of developed leading production technologies (recommended number of these technologies – 2350.05, its growth as compared to 2018 constitutes 62.34%).

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Tech, Smart Cities, and Regional Development in Contemporary Russia
Type: Book
ISBN: 978-1-78973-881-0

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Book part
Publication date: 14 December 2018

Achim I. Czerny, Xiaowen Fu, Guowei Hua, Zheng Lei and Kun Wang

The five countries in Central Asia, namely Uzbekistan, Kazakhstan, Turkmenistan, Tajikistan, and Kyrgyzstan, are landlocked and therefore rely critically on aviation for…

Abstract

The five countries in Central Asia, namely Uzbekistan, Kazakhstan, Turkmenistan, Tajikistan, and Kyrgyzstan, are landlocked and therefore rely critically on aviation for passenger travel and express cargo logistics. However, despite substantial growth in the past decade, the aviation market in the region is still not realizing its full potential. This chapter reviews the development status of the international air travel market from Central Asia, with an aim of identifying the key barriers for industrial development and growth, and possible remedies to address these challenges. Overall, our study suggests that international market growth from the region is significantly influenced by historical patterns and political ties with Russia. Whereas markets linking selected countries such as Turkey and the UAE have experienced substantial growth, further liberalization is needed for the region to achieve better connectivity with major trade partners and aviation markets.

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Airline Economics in Asia
Type: Book
ISBN: 978-1-78754-566-3

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Book part
Publication date: 22 March 2022

Dennis L. Weisman

This chapter integrates two separate branches of the law and economics literature to demonstrate the two-sided risk of market exclusion by a vertically integrated firm…

Abstract

This chapter integrates two separate branches of the law and economics literature to demonstrate the two-sided risk of market exclusion by a vertically integrated firm (VIF) with upstream and downstream market power. The ratio of downstream (retail) to upstream (wholesale) price-cost margins is key. A margin ratio that is “too low” can result in a vertical price squeeze, whereas one that is “too high” can create incentives for the VIF to engage in non-price discrimination or sabotage. A price squeeze occurs when a rival is inefficiently foreclosed because the upstream (input) price is too high relative to the downstream (output) price. Sabotage arises when the VIF raises its rivals' costs which, in turn, raises their prices and diverts demand from the rivals to the VIF. Displacement ratios delineate the range of safe harbor margin ratios within which neither form of market exclusion arises. The admissible range of these margin ratios is decreasing in the degree of product substitutability and reduces to a single ratio in the limit as the competing products approach perfect substitutes. The policy challenge is to apply these pricing constraints judiciously to prevent market exclusion in accordance with a consumer-welfare standard, while recognizing the risk that these protections can be appropriated and used strategically in the errant pursuit of a competitor-welfare standard. These issues may take on greater prominence in light of the recent release of the DOJ/FTC draft vertical merger guidelines.

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The Law and Economics of Privacy, Personal Data, Artificial Intelligence, and Incomplete Monitoring
Type: Book
ISBN: 978-1-80262-002-3

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Article
Publication date: 24 January 2022

Emre Kuvvet

The purpose of this study is to examine whether foreign firms pay disproportionately higher monetary penalties after controlling for factors that affect the sanctioning of…

Abstract

Purpose

The purpose of this study is to examine whether foreign firms pay disproportionately higher monetary penalties after controlling for factors that affect the sanctioning of the firm.

Design/methodology/approach

In this paper, a cross-sectional data analysis has been used to examine the enforcement actions of the Foreign Corrupt Practices Act (FCPA) against all private and public companies from 1978 to 2019.

Findings

The findings indicate that that foreign firms pay disproportionately higher monetary penalties than domestic firms after controlling for factors that affect the sanctioning of firms. On average, foreign firms pay $43.3m more to the US government than US firms pay. This is a considerable difference in monetary penalties and equal to 68.95% of the average monetary penalty.

Originality/value

This paper shows that the US government treats US firms more favorably than foreign firms in monetary sanctions. Because the FCPA is not applied equally, this is contrary to US government guidelines and to the rule of law. The government needs to reconsider the consequences of imposing disproportionately higher penalties on foreign firms. Given the lack of judicial scrutiny of the FCPA settlement amounts against foreign firms, prosecutorial harshness against them can be remedied by amending the FCPA to eliminate the unequal treatment of foreign entities.

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Journal of Financial Crime, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 13 December 2021

Matthew J. Behrend and Marshall K. Pitman

This study aims to investigate the effect of cash versus equity compensation on audit committee decision-making after the Public Companies Oversight Board’s 2007 censure…

Abstract

Purpose

This study aims to investigate the effect of cash versus equity compensation on audit committee decision-making after the Public Companies Oversight Board’s 2007 censure of Deloitte.

Design/methodology/approach

Using a sample of 2,588 firms, this paper uses two different compensation measurements to empirically examine the effect of audit committee compensation on decision-making.

Findings

The authors find that audit committee compensation effects the post-censure decision-making of Deloitte’s clients. The results support the hypothesis that cash compensation paid to audit committees influences audit committee members to retain their auditors post-censure. Additionally, there is some evidence to support the hypothesis that equity compensation increases the propensity to switch auditors post-censure.

Practical implications

This study will be of interest to regulators, policymakers and researchers as it provides further evidence in the area of audit committee decision-making and the effect of cash and stock compensation paid to audit committee members.

Originality/value

This study provides empirical evidence of the association between audit committee compensation and audit committee decision-making by investigating the effect of cash-based compensation and stock-based compensation on audit committee decision-making.

Details

Managerial Auditing Journal, vol. 37 no. 1
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 13 November 2020

John Maisch, Mihai Nica and Jeremy David Oller

This study aims to examine whether the introduction of wine or regular strength beer (B) sales in Tennessee grocery stores significantly increased the number of alcoholic…

Abstract

Purpose

This study aims to examine whether the introduction of wine or regular strength beer (B) sales in Tennessee grocery stores significantly increased the number of alcoholic beverages (AB) consumed or excise taxes collected in the state.

Design/methodology/approach

This study uses both a time series and a model-based approach to assess if a significant change in alcoholic beverage excise tax collections occurred after the natural experiment. The study evaluates monthly tax collections from B, mixed drinks and AB between January 1968 and September 2018 published by the Tennessee Department of Revenue.

Findings

The findings suggest that neither alcoholic beverage consumption nor excise taxes collected increased substantially in Tennessee as a result of the introduction of wine and regular strength B in grocery stores. It is likely, however, that some changes inside the industry were significant.

Originality/value

This study assists policymakers and analysts in determining whether allowing the sale of wine and regular strength B in grocery stores will have a substantial impact on the total amount of AB consumed or excise taxes collected by the jurisdiction.

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