Chillin’Competition celebrates 1st Year
We hadn´t realized, but yesterdat chillingcompetition turned 1 !
It was on October 2oth that we started spreading the word around about the existence of this blog. Nicolas probably knew what to expect after the hotchpotch experience, but I´ve been frankly surprised by the reach of this tool.
Chillingcompetition has had nearly 70.000 visits; its daily visits are currently in the order of 350 (and constantly increasing).
Moreover, its visitors are from very varied places (check the map on the lower right side of the web, right now showing visits from all over Europe, the US, China, Colombia. Kenya, Thailand, Indonesia, Japan, India or Dubai).
We are proud that some people might find the posts here interesting, and we´re committed to improving all the many things that surely can be done better.
Thanks for your trust and interest in our stories!
Nicolas / Alfonso
Belgian Competition Day
My way of celebrating the Belgian competition day: I am off to France for the day.
I’ll be presenting my recent papers to Frederic Marty and his fellows from GREDEG (in Nice Sophia Antipolis).
In addition, I have been told I would have the opportunity to meet a legend of French competition economics, Prof. Michel Glais.
Cost(e)s
Two important clarifications:
- In reading students dissertations, i keep being confronted with the erroneous view that a sunk cost is almost necessarily a fixed cost. This is simply untrue: when firms hire additional staff to increase their production scale, they incur training investments, which are sunk, variable costs.
- Also, students apparently fail to understand why marginal costs typically increase. This is because contrary to what is often said, firms face in the long term decreasing returns: diminishing productivity, costly access to input when quantities purchased increase, etc. (also, in the long run, additional fixed costs must be incurred)
(Image possibly subject to copyrights: source here)
Satisfaction
In the past both Nicolas and I have resorted to this blog to express our views on the issue of competition lawyers who can get no satisfaction (jobwise) (see here and here). It now seems that U.S. Law Schools are reacting to the perception of lawyers being unhappy by offering their students the chance to study this phenomenon in depth with a view to coming up with some sensible solutions.
Those are good news. There are many of us who, although enjoying what we do (or precisely because of this), believe that many things could be done differently and better within the legal profession. The best lawyers deserve better. In the long term, outstanding legal skills and excellent client service can only be offered by satisfied lawyers. Otherwise, our profession risks losing new generations of not so short-sighted and highly skilled lawyers.
New BSC Module starting on Friday
So far so good. The first BSC seminars were a great success. Simon Bishop (and B. Durand) are truly great speakers.
As some of you may have seen, we have decided to offer the BSC seminars on a modular basis. Because we are capacity constrained (we already have a good bunch of students), we can only accomodate a few registrations.
The next seminar is starting this Friday. J. Ysewyn and E. Sakkers will teach the law and econs of cartels for 15 hours.
For more info, please contact Pierre Sabbadini at psa@vbo-feb.be
OFT and Competition Commission to merge
There had been rumours about it in the past few weeks, but it now appears to be confirmed: the Office of Fair Trading and the Competition Commission will be merging as part of the British coalition government´s plan to cut costs (the monopoly in the enforcement of the competition rules is justified on the basis of its alleged efficiencies).
Despite its apparent complexity and notwithstanding certain duplication of tasks between the two agencies, the British enforcement system has until now worked extremely well. According to press reports, some regard this move as a negative one, fearing that it will endanger the reputation of the system. I (obviously not an expert on British competition law ) see no major objections to it. Does anyone have strong feelings about it?
Unrelated: I´ve just learnt via a communication from the ABA that you run the risk of being disbarred if you charge $3.500/hour fees, call a court clerk a “f…. bitch” and suggest that the judge in front of you is a pedophile. I suppose we´ll all have to adapt and change our argumentative techniques..
AmCham
There’s only a few excellent speakers on the AT conference circuit. I though I knew most of them.
At yesterday’s Amcham annual conference, I had the great pleasure to meet Bill Batchelor (Baker McKenzie).
Bill is certainly one of the best speakers I met in the past months. Lively, funny and to the point. He made an excellent presentation on a very complex, and possibly borying, subject, i.e. tying and rebates.
I attach his slides below.
Bill Batchelor – AMCHAM – TYING REBATES
(PS: for my part, I had the difficult task of delivering a talk just after him. I talked about tying-law post Microsoft. A paper, that I am co-writing with my assistant Norman Neyrinck, will shortly be released on this website).
Teaser
I attach the slides of our ppt. presentation on judicial review in competition law cases (delivered at the GCLC annual conference last week). A paper will shortly be posted on ssrn.
Slides DG – JUDICIAL REVIEW IN EUROPEAN UNION COMPETITION LAW
A French poll, non-profit-maximizing behavior and tacit collusion
A poll that appeared last Friday on Le Monde offers some interesting data regarding issues that have attracted our attention in the past.
The poll´s main finding is that 71% of French consumers would not switch to a competing internet provider in the event of a price increase. This further confirms that, as priorly discussed here, assuming profit-maximizing behavior on the part of consumers -although perhaps inevitable and irreplaceable as a proxy – is a hell of an assumption.
28% of those who would not switch in response to the hypothetical price increase in the order of 2-3 euros a month seem not to perceive such increase as a big change. These consumers could be regarded as the per se inelastic part of demand.
If I refer to per se inelasticity it’s because it seems that there´s a greater source of inelasticity derived from consumers expectations with regards to the parallel behavior of competitors: 38% of those who would not switch argue that switching would be pointless given that all undertakings would simultaneously increase their prices too. Interestingly, past experiences of conscious parallelism could thereby be enhancing the rigidity of the market and the individual market power of certain undertakings.
The data reflects a, certainly justified, disbelief on the part of consumers regarding competition law’s ability to face the oligopoly problem (see here for a controversial exception). A chap you might know has written a bit on this topic.
(Thanks to Napoleón Ruiz for the pointer!)
Chillin'Competition 
