Forest for the Trees: Economics of Joint Dominance

Recent court rulings, e.g., in the Gencor and Airtours cases, and the new EC Merger Regulation hint that the legal concept of joint dominance in oligopolistic markets should be interpreted as the economic concept of collusion. This is sensible and based on accepted economic theory. I discuss how competitive assessment in case law has taken some economics lessons seriously but ignored others. Economists and antitrust practitioners seem to speak past each other on these issues. This paper attempts to bridge the gap, and to clarify the concepts of joint dominance and coordination of market behavior. I discuss some recent advances in economic theory and empirical economic evidence related to joint dominance in order to draw policy conclusions.JEL Classification: L40, K21This article is a part of the joint research program of BRIE, the Berkeley Roundtable on the International Economy at the University of California at Berkeley, and ETLA, the Research Institute of the Finnish Economy (). Financial support from Nokia and the National Technology Agency (Tekes) is gratefully acknowledged. The article has benefited from comments by Ilkka Aalto-Setälä, Petri Kuoppamäki, Pekka Ylä-Anttila, and two anonymous referees. All opinions expressed and errors made are those of the author.     

China and Central Asia: a new Great Game or traditional vassal relations?

Central Asia and China have been closely intertwined in history and today that relationship has begun to re-emerge. This article analyses the reasons for the close cooperation which has re-emerged in the 1990s and boomed in the twenty-first century. Domestic and internal factors, as well as political and economic considerations are included in the search for an explanation for current relations and future expectations. Despite the fact that China has emerged as one of the world's most powerful states, its dependence on the Central Asian states in regard to oil and gas but also domestic security is intriguing. The future of Sino-Central Asian relations is deeply embedded in joint problems and common interests, but also in fear of domination and external intervention.     

Positive,Normative and Functional Schools in Law and Economics

During its relatively short history, the law and economics movement has developed three distinct schools of thought. The first two schools of thought, often referred to as the Chicago or positive school and the Yale or normative school, developed almost concurrently. The functional school of law and economics, which developed subsequently, draws from public choice theory and the constitutional perspective of the Virginia school of economics to offer a third perspective which is neither fully positive nor fully normative. Various important methodological questions have accompanied the debate between these schools concerning the appropriate role of economic analysis in the institutional design of lawmaking and the limits of methods of evaluation of social preferences and aggregate welfare in policy analysis. These debates have contributed to the growing intellectual interest in the economic analysis of law.JEL Classification: K00, B0, B5, B25, B41