Mergers and Wages in Digital Networks: a Public Interest Perspective

Moussawi, Rabih; Yaylacicegi, Ulku

doi:10.1007/s10842-019-00297-1

Cited by 5 publications

(7 citation statements)

References 119 publications

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“…Prognosticating from results, the issue of whether firms' behavior is logical is important (see the discussion in Majumdar et al, 2019). For communications sector firms, broadband investments matter for competency building.…”

Section: Discussionmentioning

confidence: 99%

“…These entities acquired other horizontal operating company controllers owning several operating companies. Using data on all acquisitions (described in Majumdar et al, 2019) and all of the identity changes occurring due to the holding company acquisition deals (described in Majumdar, 2020), this analysis evaluates the moderating impact of evolving horizontal shareholding‐driven ownership concentration, occurring following sector acquisitions, on the technology diffusion and compensation link.…”

Section: Introductionmentioning

confidence: 99%

“…Acquisition mega‐deals, predicated by firms' cost‐cutting motivations, could result in States' losing offices, plants and jobs, impacting employment, and income in State and local economies. Described in extensive detail elsewhere (Majumdar et al, 2019), a California example, in defining a public interest standard, to evaluate acquisitions, is given in Section 854 of California's Public Utilities Code . The section of the code has required the State regulatory commission to: (a) find that a deal provides short‐term and long‐term economic benefits to ratepayers; (b) equitably allocates benefits so that ratepayers receive at least half of them; and (c) find that a merger does not adversely affect competition; and if so, (d) the commission is required to adopt measures to mitigate any adverse effects.…”

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confidence: 99%

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Horizontal shareholding, technology, and compensation: An evaluation

Majumdar

2021

Manage Decis Econ

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This note reports an evaluation of the impact of broadband deployment on average compensation levels, after accounting for the moderating impact of large, medium, and small levels of horizontal shareholding among US telecommunications firms. The moderating effect of large asset control on broadband deployment does not lead to any significant impacts on the technology diffusion and compensation relationship, but the moderating effect of medium asset control on broadband deployment leads to significantly negative impacts. The moderating effect of small asset control leads to a significant positive impact; overall, the net outcomes of labor market oligopsony have been significantly negative.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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confidence: 99%

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Horizontal shareholding, technology, and compensation: An evaluation

Majumdar

2021

Manage Decis Econ

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“…The courts have generally adopted a "rule of reason" standard for these practices, which means that they are judged on a case-by-case basis with earlier precedents in mind. 4 The Department of Justice investigates about 100 allegations of price fixing a year and often proceeds with indictments.…”

Section: Collusionmentioning

confidence: 99%

Does antitrust policy improve consumer welfare? Assessing the evidence

Crandall¹,

Winston²

2005

Governments, Competition and Utility Regulation

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hould the United States pursue a vigorous antitrust policy? Soon after the passage of the Sherman Antitrust Act of 1890, economists led by John Bates Clark (1901) argued that the enforcement of such laws should be informed by the prevailing economic theory on the merits of competition and the extent to which firms' conduct can enhance or weaken competition. However, economic theory since then has proven remarkably fertile in pointing out how various actions by firms may be interpreted as either procompetitive or anticompetitive. For example, when prices decline sufficiently so that no firm in an industry is earning economic profits and some firms exit, this outcome may reflect a highly competitive market adjusting to a condition of temporary oversupply, or it could indicate that a large competitor is employing a strategy of predatory pricing to drive out its rivals. Similarly, when a firm builds a large factory, it may be engaged in vigorous competition and new entry, or it may be creating excess capacity as an implicit threat to potential competitors that it may raise output and cut price quickly if circumstances warrant. Although economic theory can help organize analysis of the economic variables affected by antitrust policy, it often offers little policy guidance because almost any action by a firm short of outright price fixing can turn out to have procompetitive or anticompetitive consequences. Given this range of theoretical possibilities, the case for a tough and broad antitrust policy must rest on empirical evidence that shows that such policies have worked in the broad social interest. In this paper, we argue that the current empirical record of antitrust enforcement is weak. We start with an overview of the budgets and actions of the federal government's antitrust authorities. We then synthesize the available research regarding the economic effects of three major areas of antitrust policy and enforcement: changing the structure or behavior of

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“…The relative size of these two effects drives the final result concerning the merger profitability. A number of factors matter, including the initial and final (pre-and post-merger) market shares, the firms' choice variable(s), that is, the price or quantity competition (see McElroy, 1993), the competition along one or more dimensions (Pinto and Sibley, 2016;Brekke et al, 2017), the cost structure and the cost nature (Farrel and Shapiro, 1990;Fanti and Meccheri, 2012;Majumdar, 2019), and the product characteristics (e.g., Hsu and Wang, 1990). A literature review is provided by Faulì-Oller and Sandonis (2018).…”

Section: Introductionmentioning

confidence: 99%

Whom should I merge with? How product substitutability affects merger profitability

Cellini

2021

J. Ind. Bus. Econ.

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The paper presents a simple model of oligopoly, in which three firms supply differentiated products. The degree of product substitutability is not uniform across goods. We investigate the merger profitability, and we show that profitability depends on the degree of good differentiation. Contrary to what seems to emerge from different models, we find that merger between firms that supply "more similar" product is more profitable as compared to merger between firms supplying more differentiated goods.

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Mergers and Wages in Digital Networks: a Public Interest Perspective

Cited by 5 publications

References 119 publications

Horizontal shareholding, technology, and compensation: An evaluation

Horizontal shareholding, technology, and compensation: An evaluation

Does antitrust policy improve consumer welfare? Assessing the evidence

Whom should I merge with? How product substitutability affects merger profitability

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