Markets’ two-sidedness has been a much discussed topic in modern economic scholarship. Hundreds of academic papers have been written about it in the last ten years. The concept has also veered into antitrust policy, with applications in major jurisdictions such as the United States (“US”), China, and recently, the European Union (“EU”). At this juncture, the question arises whether the buzz aro...

How firms react to a given shock depends on whether rivals are present and potential entrants to that market exist (i.e., whether the market is contestable). This paper attempts to measure these effects in an international context by examining the price behavior of US exporters in Brazil's market when MERCOSUR and MFN trade liberalization take place. Using very detailed panel data on trade and ...

After a period of many expert reports on competition policy in digital markets, we are witnessing global race to regulate the activity large online companies, which European Union has joined with Regulation (EU) 2022/1925 Parliament and Council 14 September 2022 contestable fair markets sector known as Digital Markets Act. This is subject this study, that based solely Union’s harmonisation comp...

The European Commission's attempt to update the Electricity and Gas Directives to underwrite unbundling and full liberalisation coincides with the California electricity crisis. The paper argues that compared to the US, much of the EU lacks the necessary legislative and regulatory power to mitigate generator market power. Unless markets are made more contestable, transmission capacity expanded ...

The establishment of new environmental regulation, such as emissions taxes and tradable pollution permit markets, create rents that can be captured through a process of socially wasteful rent seeking. In this paper, we create a framework that compares social welfare under alternative market-based environmental policy instruments when agents lobby for the contestable rent. We show revenue raisin...

Wecharacterize the familyofnon-contestablebudget-monotone rules for the allocation of objects and money as those obtained by maximizing a min social welfare function among all non-contestable allocations. We provide three additional seemingly independent approaches to construct these rules. We present three applications of this characterization. First, we show that one can “rectify” any non-con...

Algorithmic pricing may lead to more efficient and contestable markets, but high-impact, low-probability events such as terror attacks or heavy storms price gouging, which trigger injunctions get sellers banned from platforms Amazon eBay. This work addresses how impact prices when set by an algorithm different markets be affected. We analyze mitigate these high-impact paying attention external ...

This paper examines the main structural and performance features of European banking. It shows that while banking markets have become increasingly concentrated and bank numbers have fallen, competition appears to have intensified. Given the large number of banks and branches in many countries there still remain indicators of excess capacity in the system and that the consolidation trend, especi...

We incorporate marginal cost savings from bundling, fixed costs of product offerings, and variation in customer preferences into a model of bundling and tying. To focus on cost effects, we assume perfectly contestable markets and analyze sustainable product offerings. Pure bundling can arise either because few people demand only one component or because, with high fixed costs, a single product ...