The institutional and regulatory environment affects market participants’ decisions on key economic variables such as prices and investments (e.g. expenses for advertising or research and development). Competition policy, for example, defines the broad rules for market interaction. Regulatory policies aim at improving the functioning of imperfectly competitive markets (such as financial markets and utilities) and institutions (e.g. banks) or at achieving wider objectives (environmental goals, health standards).
We evaluate and compare the relative performance of different approaches to regulation. Our approach to institutional design relies on the tools of game theory, information economics, and mechanism design, as well as on empirical methods using data collected in field research and laboratory experiments. We also develop these tools further by conducting basic research on game-theoretic models of market and non-market interaction.
Exemplary project: Channel 5 or 500? Vertical Integration, Favoritism, and Discrimination in Multichannel Television (G. Crawford, R. Lee, B. Vieira, M. Whinston)
The behavior of vertically integrated firms has attracted significant concern from competition authorities in recent years. In television, the merger between major U.S. cable television distributor Comcast and major television content provider NBC in 2011 prompted concerns that Comcast would favor NBC content over rival content. When examining the behavior of vertically integrated cable television operators, we find that integrated operators carry their own content 20% more frequently than non-integrated rivals and that they place their content 35 positions lower on their channel lineup that would otherwise be the case, increasing viewership (and thus advertising revenues) by approximately 10%. We find some cases where rival content is treated unfavorably in carriage or positioning by integrated operators, but other cases where it is treated similarly or even better.
Selected research projects
- How Does Competition Alter Fairness Perceptions? (B. Bartling)
- Regulation of Television Markets (G. Crawford)
- Contests (C. Ewerhart)
- Engineering Social and Economic Institutions
- Regulation of the Pharmaceutical Industry (U. Kaiser)
- Mechanism Design and Intentions (N. Netzer)
- Bank Bailout Menus (K. Nyborg)
- A Cost Benefit Analysis of Macro-Prudential Regulations (J.-C. Rochet)
- Role Models (M. Saez-Marti)
- R&D Tax Credits (K. Schmedders)
- Design of Matching Markets (S. Seuken)
- Competition and Innovation (A. Schmutzler)
- Do Research Joint Ventures Serve a Collusive Function? (M. Sovinsky)
Connections to courses
Competition and Regulation addresses students who are interested in the interplay between markets and policy institutions. Students who focus on this area will be well qualified to work in research institutions or in government agencies. Likewise, they can work in private-sector firms or act as economic consultants. Topic-related courses are particularly suited for students with a solid foundation and keen interest in microeconomics, game theory and/or microeconometrics. The following list provides examples of courses particularly related to Competition and Regulation.
List of courses
More detailed information on each module can be found by copying the 8-digit code into the search field of the University’s course catalogue.
|Introduction to Game Theory||BOEC0109|
|Prinzipien der Wirtschaftspolitik||BOEC0297|
|Vertrags- und Informationsökonomik||BOEC0249|
|Seminar in Competition Policy||BOEC0331|
|Umwelt- und Ressourcenökonomik||BOEC0216|
|Seminar in Auktionsökonomik||BOEC0334|
|Economics and Computation||BINF4225|
|Firm Boundaries and Competitive Analysis||MOEC0206|
|Industrial Organization and Competition Policy||MOEC0305|
|Groups in Economic Decision-Making||MOEC0304|
|Advanced Industrial Economics||MOEC0236|
|ME2: Microeconomic Theory of the Firm||MOEC0203|
|Economics and Computation||MINF4530|
|Computational Economics and Finance||MFOEC167|
|Microeconomics for Research Students I and II||DOEC0381|
|Econometrics for Research Students I and II||DOEC0379|
|Empirical Industrial Organization||DOEC0134|
|Internal Microeconomics Seminar||DOEC0448|
Faculty members involved
The following Faculty members research and/or teach in Competition and Regulation.