Research

The goal of antitrust policy is to protect and promote a vigorous competitive process. Effective rivalry spurs firms to introduce new and innovative products, as they seek to capture profitable sales from their competitors and to protect their existing sales from future challengers. In this fundamental way, competition promotes innovation. We apply this basic insight to the antitrust treatment of horizontal mergers and of exclusionary conduct by dominant firms. A merger between rivals internalizes business-stealing effects arising from their parallel innovation efforts and thus tends to depress innovation incentives. Merger-specific synergies, such as the internalization of involuntary spillovers or an increase in the productivity of R&D, may offset the adverse effect of a merger on innovation. We describe the possible effects of a merger on innovation by developing a taxonomy of cases, with reference to recent US and EU examples. A dominant firm may engage in exclusionary conduct to eliminate the threat from disruptive firms. This suppresses innovation by foreclosing disruptive rivals and by reducing the pressure to innovative on the incumbent. We apply this broad principle to possible exclusionary strategies by dominant firms.

How does integration between a dominant search engine and a publisher affect a search engine’s incentives to bias towards its own content? In addition, how does integration affect the quantity of ads on an integrated publisher’s site? In this paper, the authors develop a theoretical model to demonstrate the effects of no integration, partial integration, and full integration on search engine bias and quantity of publisher ads. The model also sheds lights on user and advertiser welfare after integration.

A revolutionary approach to data ownership and privacy, Solid is a tech stack developed by the founder of the World Wide Web, Tim Berners-Lee. Solid’s mission is to decentralize the web by doing away with huge data silos, providing users ownership over their personal data, and reshaping the nature of competition among digital companies.

This paper explores the relationship between two ubiquitous phenomena in the digital economy: online ad auctions and tracking cookies. The authors assess what happens to ad auction revenue when competing advertisers receive different kinds of information from their cookies. They find that the revenue to ad sellers like Google and Facebook changes dramatically based on ad auction structure and on the quantity and quality of information available to advertisers.

Following the advent of Amazon Web Services (AWS) in 2006, the cost of starting a new business substantially decreased, leading venture capital firms to adapt their investment approach. The authors analyze why investors are increasingly adopting the “spray and pray” investment approach in early stages, provide limited governance, and prefer businesses where the future potential is revealed quickly and cheaply. Additionally, they use the technological shock of AWS to explain the rise of new financial intermediaries such as accelerators.

The Yale Labor Survey (YLS) uses online panels to estimate the state of the US labor market in real time. It is designed to parallel the US government’s monthly labor force survey and present weekly information rapidly and inexpensively. Using an experimental design, the YLS estimates that the US unemployment rate peaked in late April and improved substantially by mid-June. The YLS unemployment rate in mid-June is estimated to be 15%, down about 2 percentage points from mid-May.

Antitrust enforcement against anticompetitive platform most favored nations
(MFN) provisions (also termed pricing parity provisions) can help protect competition in online markets. An online platform imposes a platform MFN when it requires that providers using its platform not offer their products or services at a lower price on other platforms. These contractual provisions may be employed by a variety of online platforms offering, for example, hotel and transportation bookings, consumer goods, digital goods, or handmade craft products. They have been the subject of antitrust enforcement in Europe but have drawn only limited antitrust scrutiny in the United States. Our Feature explains why MFNs employed by online platforms can harm competition by keeping prices high and discouraging the entry of new platform rivals, through both exclusionary and collusive mechanisms, notwithstanding the possibility that some MFNs may facilitate investment by limiting customer freeriding. We discuss ways by which government enforcers in the United States and private plaintiffs could potentially reach anticompetitive platform MFNs under the Sherman Act, and the litigation challenges such cases present. 

How does price salience, or when fees are listed more clearly upfront, affect the quantity and quality of the product purchased? In this paper, the authors use a dataset from the online ticketing platform StubHub to show the effects of hiding buyer fees until the checkout page on consumer decisions for product choice, total revenue, and possible forces that might influence salience.

Brave is an open-source, privacy-focused browser that blocks third-party ads and is able to load pages twice as fast as Chrome or Firefox. It was founded in 2015 by the creator of Javascript and the Mozilla Project. This summary explains how Brave operates a decentralized digital ad-exchange using its own cryptocurrency, the Basic Attention Token (BAT). The BAT ecosystem rewards users for viewing ads, funds advertisers, and helps make the user attention market more transparent and efficient.