To What Extent are Cost Savings Passed on to Consumers? An Oligopoly Approach

Competition policy often asks whether a “fair share” of the benefits from cost savings obtained through mergers or agreements is passed on to the consumers. We assess the factorsthat determine cost pass-on in some partial-equilibrium oligopoly models, and show that, although the strength of the pass-on varies from one situation to another, there are some rules of thumb that give a first approximation of the pass-on rate. We also show that, contrary to common belief and to what is written about the subject in the European Commission's guidelines on the application of Article 81(3), in most circumstances cost pass-on does not depend on the price elasticity of demand nor on the market share of the cost saver, and that with competition the pass-on of firm-specific cost savings is weaker than without. JEL Classification: C72 (non-cooperative games), D43 (oligopoly), L40 (antitrust policy)     

Roadside oral fluid testing: comparison of the results of drugwipe 5 and drugwipe benzodiazepines on-site tests with laboratory confirmation results of oral fluid and whole blood

Drugged drivers pose a serious threat to other people in traffic as well as to themselves. Reliable oral fluid screening devices for on-site screening of drugged drivers would be both a useful and convenient means for traffic control. In this study we evaluated the appropriateness of Drugwipe 5 and Drugwipe Benzodiazepines oral fluid on-site tests for roadside drug screening. Drivers suspected of driving under the influence of drugs were screened with the Drugwipe tests. Oral fluid and whole blood samples were collected from the drivers and tested for amphetamine-type stimulant drugs, cannabis, opiates, cocaine and benzodiazepines by immunological methods, GC and GC-MS. The performance evaluations of the tests were made by comparing the results of the Drugwipe tests with laboratory GC-MS confirmation results of oral fluid or whole blood. In addition to the performance evaluations of the Drugwipe tests based on laboratory results, a questionnaire on the practical aspects of the tests was written for the police officers who performed the tests. The aim of the questionnaire was to obtain user comments on the practicality of the tests as well as the advantages and weak points of the tests. The results of the performance evaluations were: for oral fluid (sensitivity; specificity; accuracy) amphetamines (95.5%; 92.9%; 95.3%), cannabis (52.2%; 91.2%; 85.1%), cocaine (50.0%; 99.3%; 98.6%), opiates (100%; 95.8%; 95.9%), benzodiazepines (74.4%; 84.2%; 79.2%) and for whole blood accordingly, amphetamines (97.7%; 86.7%; 95.9%), cannabis (68.3%; 87.9%; 84.9%), cocaine (50.0%; 98.5%; 97.7%), opiates (87.5%; 96.9%; 96.6%) and benzodiazepines (66.7%; 87.0%; 74.4%). Although the Drugwipe 5 successfully detected amphetamine-type stimulant drugs and the police officers were quite pleased with the current features of the Drugwipe tests, improvements must still be made regarding the detection of cannabis and benzodiazepines.     

Predatory bidding in competitive tenders: A Swedish case study

Public procurement by competitive tendering is an important part of European policies to encourage competition in network industries previously dominated by public companies. In recent years, the appearance of very low bids has become an issue in several countries. We discuss predatory bidding from a theoretical, practical and legislative point of view. A case of tendering for train services in Sweden is used to illustrate the possibilities to detect an abnormally low bid. An analysis of projected costs and revenues is complemented with a method using historical data on previous tenders. One conclusion is that there is scope for reform in national competition policies in European Union member states concerning multinational enterprises participating in local tenders. JEL Classification K21 · K23 · L12 · L43 · L92     

The Logic of Private and Collective Action

Since Mancur Olson's Logic of Collective Action (1965), it is impossible for political scientists to conceive of political participation without reference to his powerful argument linking numbers of participants, public goods, and participatory outcomes. What is puzzling is the poor empirical support for this argument in the domain where it should work best, namely explaining business political activity. Olson thought his arguments principally applicable to economic groups, and for the empirical development of his arguments Olson drew heavily on business interests, the most active segment of the interest group community. We explore these arguments with business political activities data by examining the statistical performance of various measures of market structure in determining business political activity, and find little empirical support. We do offer an alternative basis for business behavior lodged in both private and collective goods that preserves business rationality and also helps explain not only the amount of business political participation but the modes of business participation .