Economics 224: Regulation and Antitrust: Government and the Market

Professor Christiaan Hogendorn
Spring 2007
Prof. Hogendorn's Homepage Course Policies

Syllabus

VHV = W. Kip Viscusi, Joseph Harrington, and John Vernon, Economics of Regulation and Antitrust, Fourth Edition, MIT Press, 2005.
Numbered readings are required, other readings are extra.

I. Introduction
Jan. 25 Th 1. Organization
  1. VHV, Chapter 1
Jan. 30 T 2. Monopoly
  1. VHV, Chapter 4.
  • George J. Stigler, "Perfect Competition, Historically Contemplated," Journal of Political Economy, 65(1), 1957: 1-17.
Feb. 1 Th 3. Economies of Scale
  1. Joseph Stiglitz and Carl Walsh, Chapters 7-8 in Economics, 3rd edition, Norton, 2002.
  • Emek Basker, "The Causes and Consequences of Wal-Mart's Growth" November 2006 (University of Missouri Department of Economics Working Paper 06-11), forthcoming, Journal of Economic Perspectives.
  • Chandler, Alfred, "Scale, Scope, and Organizational Capabilities," Chapter 2 in Scale and Scope: the Dyanimics of Industrial Capitalism, Harvard University Press, 1990.
  • Liza Featherstone, "Mean or Green?" The Nation, 9/11/2006, Vol. 283 Issue 7, p31-34.
  • Michael Pollan, "Mass Natural," New York Times Magazine, June 4, 2006. pg. 15.
Feb. 6 T 4. Public Goods and Externalities
  1. Edward Mansfield and Gary Yohe, "Public Goods, Externalities, and the Role of Government," Chapter 18 in Microeconomics: Theory/Applications, Norton, 2004.

II. Antitrust
Feb. 8 Th 5. Laws
  1. VHV, Chapter 3.
  • Massimo Motta, "Competition Policy: History, Objectives, and the Law," Chapter 1 in Competition Policy: Theory and Practice, Cambridge, 2004.
  • Dennis Carlton and Randal Picker, "Antitrust and Regulation," Working Paper, 2006, introduction and sections I and II.
Feb. 13 T 6. Oligopoly, Collusion, and Antitrust
  1. VHV, Chapter 5. Focus on pp. 106-112 and 121-147.
Feb. 15 th 7. Market Structure and Strategic Competition (Entry)
FIRST QUIZ: Quiz    Answers
  1. VHV, Chapter 6
  • Richard J. Gilbert, "The Role of Potential Competition in Industrial Organization," Journal of Economic Perspectives, 3(3), 1989: 107-127.
  • Barry Lynn, "Breaking the Chain [Wal-Mart Antitrust Cases]," Harper's Magazine, July 1, 2006.
Feb. 20 T 8. Mergers
  1. VHV, Chapter 7
  • Serdar Dalkir and Frederick Warren-Boulton, "Prices, Market Definition, and the Effects of Merger: Staples-Office Depot (1997)," Case 2 in John Kwoka and Lawrence White, eds., The Antitrust Revolution, 4th edition, Oxford, 2004.
Feb. 22 Th 9. Vertical Mergers and Vertical Restraints
  1. VHV, Chapter 8
  • Michael Riordan and Stephen Salop, "Evaluating Vertical Mergers: A Post-Chicago Approach," Antitrust Law Journal, Winter 1995.
  • Massimo Motta, "Vertical Restraints and Vertical Mergers," Chapter 6 in Competition Policy: Theory and Practice, Cambridge, 2004. (Especially GE/Honeywell section.)

III. Common Carriage
Feb. 27 T 10. Common Carriers
  1. Richard Epstein, "Common Carriers," Chapter 10 in Principles for a Free Society, Perseus, 1998.
  • Dennis Carlton and Randal Picker, "Antitrust and Regulation," Working Paper, 2006, introduction and section III and Conclusion.
  • Eli Noam, "Beyond liberalization II: The impending doom of common carriage." Telecommunications Policy, 1994.
March 1 Th 11. Interconnection and Telecommunications
  1. VHV, Chapter 9
  • Brett Frischmann. "An Economic Theory of Infrastructure and Commons Management," Minnesota Law Review, 89 April 2005.
  • #Gerald Faulhaber, "Access and Network Effects in the 'New Economy': AOL-Time Warner (2000)," Case 18 in John Kwoka and Lawrence White, eds., The Antitrust Revolution, 4th edition, Oxford, 2004.
  • Puffert, Douglas, "The Standardization of Track Gauge on North American Railways, 1830-1890," The Journal of Economic History, 60(4), 2000: 933-960.
  • Nicholas Economides, "Economics of the Internet," NET Institute Working Paper, 2007.

IV. Economic Regulation
March 6 T 12. Introduction to Economic Regulation (Including Capture)
  1. VHV, Chapter 10.
  • David Newberry, "Theories of Regulation," Chapter 4 in Privatization, Restructuring, and Regulation of Network Utilities, MIT, 1999.
  • David Landes, "What Do Bosses Really Do?" Journal of Economic History, 46(3), 1986: 585-623.
  • Robert Pear, "Bush Directive Increases Sway On Regulation," The New York Times, Jan 30, 2007: pA1.
March 8 Th 13. Natural Monopoly
  1. VHV, Chapter 11
  • VHV, Chapter 15
SPRING BREAK
March 27 T 14. Natural Monopoly Regulation and Electric Power
  1. VHV, Chapter 12.
  • Severin Borenstein, "The Trouble with Electricity Markets: Understanding California's Restructuring Disaster," Journal of Economic Perspectives, 16(1), 2002: 191-211.
March 29 Th 15. Franchise Bidding (and Cable Television)
  1. VHV, Chapter 13.
  • Jose Gomez-Ibanez, "The Evolution of Concession Contracts: Municipal Franchises in North America," Chapter 7 in Regulating infrastructure : monopoly, contracts, and discretion, Harvard University Press, 2003.
April 3 T 16. Transportation
    VHV, Chapter 17.
  • Severin Borenstein, "The Evolution of U.S. Airline Competition," Journal of Economic Perspectives, 6(2), 1992: 45-73.
  • Jose Gomez-Ibanez and John Meyer, "The Rediscovery of Private Contracts: U.S. Railroad and Airline Deregulation," Chapter 8 in Regulating infrastructure : monopoly, contracts, and discretion, Harvard University Press, 2003.
April 5 Th 17. Energy
SECOND QUIZ: Quiz    Answers
  1. VHV, Chapter 18.

V. Health, Safety, and Environmental Regulation
April 10 T 18. Valuing Life and Other Hard to Value Things
  1. VHV, Chapter 20.
April 12 Th 19. Healthcare
  1. VHV, Chapter 19.
  • John Goddeeris, "Health Care," Chapter 10 in Walter Adams and James Brock, The Structure of American Industry, Pearson, 2005.
April 17 T 20. Environmental Regulation
  1. VHV, Chapter 21.
April 19 Th 21. Product Safety and Food Safety
  1. VHV, Chapter 22.
  • Sinclair
April 24 T 22. Workplace Health and Safety (and Consumer Perceptions)
  1. VHV, Chapter 23.
  • Starbucks
  • Food Working Conditions

VI. Agriculture and Quality of Life
April 26 Th 23. Agriculture and Price Instability
  1. Daniel Suits, "Agriculture," Chapter 1 in Walter Adams and James Brock, The Structure of American Industry, Pearson, 2005.
  2. The Common Agricultural Policy Explained, European Commission Directorate General for Agriculture, 2004.
May 1 T 24. European Food and Drink Regulations
  • William Adams, "Beer in Germany and the United States," Journal of Economic Perspectives, 20(1), 2006: 189-205.
May 3 Th 25. The Countryside / The Cityscape
  • Jerry Muller, "Justus Moser: The Market as Destroyer of Culture," Chapter 4 in The Mind and the Market, Knopf, 2002.
  • Jonathan Leape, "The London Congestion Charge," Journal of Economic Perspectives, 20(4), 2006: 157-176.
May 8 T 26. Review
THIRD QUIZ