Assessing Market Power: The Trade-off Between Market Concentration and Multi-Market Participation

This analysis reveals that traditional market power measuresare biased under the conditions of multi-market participationand demand interdependence. Specifically, when complementary(substitutable) demands dominate, traditional market power measuresare biased upward (downward). A similar bias carries over tothe evaluation of mergers. To wit, mergers that simultaneouslyincrease market concentration and multi-market participationcan result in lower prices even in the absence of merger economies.It follows that merger guidelines that place undue emphasison market concentration can lead policymakers to block (approve)mergers that enhance (diminish) consumer welfare.     

The effect of authority and social influence on eyewitness suggestibility and person recognition

This study investigated the influence of an authority figure on eyewitness identification. Participants watched a staged crime and then were administered a photo lineup by either an authority (policeman) or non-authority figure (civilian). Participants in the authority condition were more likely to choose a lineup member than those in the non-authority condition. There was no effect of authority, however, on the accuracy of the identification decisions. The lack of a deleterious effect suggests that the presence of a police officer during identification procedures does not create an unduly suggestive situation or have undesirable effects on eyewitness identification decisions. Although witnesses' choosing behaviors did not increase the rate of identification errors, the effect of the administrator's authority on choosing was reduced when unbiased instructions (vs. biased instructions) were presented to the witnesses. Thus, support was found for the use of neutral instructions during eyewitness identification procedures.     

Private sector shrinkage and the growth of industrialized economies: Reply

Further tests and thoughts on the OECD data lead me to conclude that, if anything, my 1986 paper underestimated the magnitude of the inverse relation between economic growth and government size. If one takes the nominal-based measure of government scale, as advised by Saunders, the significance levels, coefficient magnitudes and goodness of fits improve over what I found with my initial investigation. I would suggest that Saunders reconsider his reluctance to believe that the size of the public sector is unrelated to economic growth in OECD countries over this time period.One additional thought appears relevant to the current policy debate concerning budget deficits and economic performance within the major industrialized economies. The empirical work displayed here and in my 1986 paper suggests serious problems associated with the various proposals urging governments to raise taxes and/or ease fiscal policy. Elsewhere, I have suggested that available empirical evidence implies that plans to increase taxes as a way out of budget deficits are plans that carry the potential for raising government spending and possibly future deficits as well. Coupled with the evidence presented here, we should also recognize the potential of tax increases to raise the level of government participation in a country and, accordingly, exert inverse influences on its future economic performance as well. As suggested in my 1986 paper, the empirical evidence may suggest the following irony: While political participants may crave larger and larger non-market resource allocations, their future ability to satisfy that craving may very well be severely constrained by the satisfaction of that same appetite.     

Is medical care different? Old questions, new answers

This paper examines whether changes in medical markets may be making them more like other markets. The emergence of HMOs and other managed care systems appears to have increased the consumer's potential ability to make better comparative judgments about the price and quality of medical care, and also seems to have made medical care more like other goods. However, the evidence that medical care is a "reputation good" suggests that it is, in this respect, different from other goods. Finally, the social concerns about medical care use necessarily make medical care different.     

Fiji: country profile

Fiji is a country consisting of 300 South Pacific islands, of which the largest is Vitu Levu, which includes the capital, Suva. The islands are home to 700,000 people, of whom 50% are Indian, 46% Melanesian, and the rest Chinese or European. The official language is English, and the major religions are Hinduism and Christianity. Literacy is 79% for men and 64% for women, whose status is generally low in this patriarchal society. Infant mortality is 27/1000 live births, but life expectancy is 70 years. The British began sending missionaries and manufactured goods in the early 1800s and annexed the islands in 1874 as a source of sugar, for which they expropriated the land and imported the Indians as agricultural workers. Sugar remains the largest export along with coconut oil, gold, and timber. Manufactured goods, food, fuel, and chemicals are imported, and the national debt is over $200 million. Foreign investment, mostly by Australia, is $13.2 million. Inflation is 20%; 200,000 people are unemployed, and poverty is general except for the urban elite. The Fijian dollar is worth US. 80. Independence, granted in 1970, replaced colonial control with military governments, currently that of Colonel Rambuka, who refused to allow a democratically elected government to take office. Faced with a declining economy and the political power of the fascist Taukei movement, the Indians, who had been the shopkeepers, craftsmen and bureaucrats during the later period of colonial rule, have been emigrating en masse.     

Swaziland: country profile

Although Swaziland had been independent from colonialism for 20 years, a powerful monarch, King Mswati II, continues to control the country's political, religious, and social system. Swaziland has a population of 676,000, half of whom are under 15 years of age. The infant mortality rate is 105/1000 live births and 25% of children die before they reach their 5th birthday. Life expectancy is 54 years. Tribal chiefs, representing the king, hold and distribute about half of the national land. Most of the fertile land remains in the hands of white settler farmers. The concentration of income in foreign companies and urban centers has exacerbated poverty in rural areas. Depreciation of rand-linked local currency has boosted export earnings, but it has also raised the price of food and medical imports. Swaziland's main exports are sugar, wood pulp, chemicals, and fruit, most of which go to the UK and South Africa. The major food crops are maize, beans, groundnuts, and sorghum. About half of the working population is engaged in small-scale subsistence farming, but food yields are declining. The major producers are foreign companies attracted by Swaziland's low taxes and cheap labor supply.