Gregor Langus - Academia.edu (original) (raw)

Papers by Gregor Langus

SSRN Electronic Journal, 2022

We study the question whether a holder of standard essential patents (SEPs) should be allowed to ... more We study the question whether a holder of standard essential patents (SEPs) should be allowed to choose the level in the value chain at which to offer a FRAND license to its SEPs. We give a positive answer to this question for two reasons. First, the SEP holder and the social planner tend to choose the licensing level that, other things being equal, minimizes transaction costs. Second, the SEP holder maximizes total output, which is often aligned with social welfare maximization by the planner. These two factors make it likely that the SEP holder chooses the efficient level of SET licensing.

SSRN Electronic Journal, 2022

We identify features of interactions on online platforms that make an ad-funded business model at... more We identify features of interactions on online platforms that make an ad-funded business model attractive for the platform, but also for consumers. We then show that ad-funded platforms heavily rely on data for their ability to create value for their users. Formally, we show that data restrictions may trigger a switch away from ad-funded to fee-funded model, resulting in a loss of consumer welfare. We also argue that restricting the effort to increase data quality weakens competition to the detriment of consumers.

We estimate, using event study techniques, the impact of the main events in an antitrust investig... more We estimate, using event study techniques, the impact of the main events in an antitrust investigation on a firm’s stock market value. A surprise inspection at the firm’s premises has a strong and statistically significant effect on the firm’s share price, with its cumulative average abnormal return being approximately-2%. Further, we find that a negative Decision by the European Commission results in a cumulative average abnormal return of about-3.3%. Overall, the fine accounts for a relatively small fraction of this loss in value. Finally, if the Court annuls or reduces the fine, this has a positive (+2%) effect on the firm’s valuation. ∗A number of people helped us in various ways in this project. In particular, we

We model merger control procedures as a process of sequential acquisition of information in which... more We model merger control procedures as a process of sequential acquisition of information in which mergers can be cleared after a ?first phase of investigation. We fi?nd that the enforceability of clearance decisions at the end of the fi?rst phase is unattractive to the extent that it prevents the authorities to use their expectations as to whether evidence gathered in the fi?rst phase will be confi?rmed in the second phase. This deprives the ?first phase of its potential as an effective screening mechanism. We also fi?nd that when clearance decisions in the fi?rst phase are enforceable, a different (higher) standard in the fi?rst phase is only desirable when Phase I decisions are captured by merging parties (as opposed to complainants).

"Friesland Foods/Campina: a merger between two Dutch dairy cooperatives approved with a set ... more "Friesland Foods/Campina: a merger between two Dutch dairy cooperatives approved with a set of comprehensive remedies"* I. Introduction The Friesland Foods/Campinacase (M.5046), which concerned…

"The E.ON electricity cases: an antitrust decision with structural remedies"* I. Introd... more "The E.ON electricity cases: an antitrust decision with structural remedies"* I. Introduction On 26 November 2008 the Commission adopted a commitment decision addressed to E.ON AG for suspected…

(Still preliminary) This paper deals with the determinants of agents ’ acquisition of information... more (Still preliminary) This paper deals with the determinants of agents ’ acquisition of information. Our econometric evidence shows that the general index of Italian share-prices and the series of Italy’s financial newspaper sales are cointegrated, and the former series Granger-causes the latter, thereby giving support to the cognitive dissonance hypothesis: agents tend to buy the newspaper when share prices are high and not to buy it when share prices arelow. Instead,wedonotfind support for the hypothesis that the agents acquire information in order to trade in the stock-market: we find no relationship between quantities exchanged in the market and newspaper sales. ∗We are grateful to Armando Carcaterra, Claudio Mazzoli (Brainpower) and Hammad Nasar for their help with Italian stock-market data, to Sibilla Guzzetti (ADS) for help with

"Friesland Foods/Campina: a merger between two Dutch dairy cooperatives approved with a set ... more "Friesland Foods/Campina: a merger between two Dutch dairy cooperatives approved with a set of comprehensive remedies"* I. Introduction The Friesland Foods/Campinacase (M.5046), which concerned…

Seminaire Droit et Economie organise par la Revue Concurrences en partenariat avec Shearman & Ste... more Seminaire Droit et Economie organise par la Revue Concurrences en partenariat avec Shearman & Sterling et Compass Lexecon.

SSRN Electronic Journal, 2019

We set up a model to analyze the effects of mergers between sellers of complementary components w... more We set up a model to analyze the effects of mergers between sellers of complementary components where firms invest in compatibility and can engage in bundling. We consider the impact of merger on prices, investment and consumer surplus. We also analyse when the merged firm may have an incentive and ability to foreclose rivals. JEL-Codes: L130, L410.

SSRN Electronic Journal, 2015

We modify the UPP test of Farrell and Shapiro (2010) to take into account the possibility that a ... more We modify the UPP test of Farrell and Shapiro (2010) to take into account the possibility that a merger weakens (or eliminates) a vertical supply relationship. After deriving a general effect of the merger, we provide an example of simple estimation strategy when only prices, costs and market shares are available as a snapshot. JEL-codes: K210, L490.

SSRN Electronic Journal, 2021

Envelopment is an effective form of market entry that facilitates competition among platforms. Ne... more Envelopment is an effective form of market entry that facilitates competition among platforms. Nevertheless, many commentators have focused on the anticompetitive potential of envelopment, and some have argued for regulation of platforms because of that concern. These calls for regulation are not supported by robust formal analysis or comprehensive empirical evidence. We analyze a visible recent contribution by Condorelli and Padilla (2020a,b) and explain why the model that they put forward is not ripe for policy advice in relation to concerns with envelopment.

Competition Law & Policy Debate, 2020

We estimate, using standard event study techniques, the impact of various events in an antitrust ... more We estimate, using standard event study techniques, the impact of various events in an antitrust investigation on the firm's stockmarket value. The EC's surprise inspection of the firm's premises has a strong and statistically significant effect on the firm's share price, with its cu- mulative average abnormal return being approximately -2.2%. Further and somehow surprising we find that a negative Commission Decision results in a cumulative abnormal return of about -3%. Overall, the fine accounts for just a small part of this loss in value.

We model merger control procedures as a process of sequential acquisition of information and comp... more We model merger control procedures as a process of sequential acquisition of information and compare US and EU procedures. In the US, the authorities do not have to justify their decision to require further information (issue a second request), whereas in the EU, the authorities face a di_erent (enforceable) standard of proof in phase I relative to phase II. We _nd that in the absence of remedies, the US procedure is always superior in terms of expected consumer welfare. When we allow for remedies, we _nd that, compared to the US, merging parties in the EU have more scope to propose remedies in phase I that will preempt the authorities from uncovering unfavorable information in phase II, and this might reduce expected consumer welfare. However, the higher standard of proof in phase I can also in some circumstances act as a commitment not to accept remedies below some threshold and yield a higher expected consumer welfare in the EU. Our model also shows that for global mergers that h...

International Journal of Industrial Organization

International Journal of Industrial Organization

We set up a stylized oligopoly model of uncertain product innovation to analyze the effects of a ... more We set up a stylized oligopoly model of uncertain product innovation to analyze the effects of a merger on innovation incentives and on consumer surplus. The model incorporates two competitive channels for merger effects: the "price coordination" channel and the internalization of the "innovation externality". We solve the model numerically and find that price coordination between the two products of the merged firm tends to stimulate innovation, while internalization of the innovation externality depresses it. The latter effect is stronger in our simulations and, as a result, the merger leads to lower innovation incentives for the merged entity, absent cost efficiencies and knowledge spillovers. In our numerical analysis both overall innovation and consumer welfare fall after a merger.

Review of Industrial Organization

The Directorate General for Competition at the European Commission enforces competition law in th... more The Directorate General for Competition at the European Commission enforces competition law in the areas of antitrust, merger control, and state aids. This year's article provides first a general presentation of the role of the Chief Competition Economist's team and surveys the main achievements of the Directorate General for Competition over 2016/2017. The article then reviews the economic work undertaken in one merger case between Dow/DuPont, which raised & Tommaso Valletti

SSRN Electronic Journal

We set up a stylized oligopoly model of uncertain product innovation to analyze the effects of a ... more We set up a stylized oligopoly model of uncertain product innovation to analyze the effects of a merger on innovation incentives and on consumer surplus. The model incorporates two competitive channels for merger effects: the "price coordination" channel and the internalization of the "innovation externality". We solve the model numerically and find that price coordination between the two products of the merged firm tends to stimulate innovation, while internalization of the innovation externality depresses it. The latter effect is stronger in our simulations and, as a result, the merger leads to lower innovation incentives for the merged entity, absent cost efficiencies and knowledge spillovers. In our numerical analysis both overall innovation and consumer welfare fall after a merger.

SSRN Electronic Journal, 2022

We study the question whether a holder of standard essential patents (SEPs) should be allowed to ... more We study the question whether a holder of standard essential patents (SEPs) should be allowed to choose the level in the value chain at which to offer a FRAND license to its SEPs. We give a positive answer to this question for two reasons. First, the SEP holder and the social planner tend to choose the licensing level that, other things being equal, minimizes transaction costs. Second, the SEP holder maximizes total output, which is often aligned with social welfare maximization by the planner. These two factors make it likely that the SEP holder chooses the efficient level of SET licensing.

SSRN Electronic Journal, 2022

We identify features of interactions on online platforms that make an ad-funded business model at... more We identify features of interactions on online platforms that make an ad-funded business model attractive for the platform, but also for consumers. We then show that ad-funded platforms heavily rely on data for their ability to create value for their users. Formally, we show that data restrictions may trigger a switch away from ad-funded to fee-funded model, resulting in a loss of consumer welfare. We also argue that restricting the effort to increase data quality weakens competition to the detriment of consumers.

We estimate, using event study techniques, the impact of the main events in an antitrust investig... more We estimate, using event study techniques, the impact of the main events in an antitrust investigation on a firm’s stock market value. A surprise inspection at the firm’s premises has a strong and statistically significant effect on the firm’s share price, with its cumulative average abnormal return being approximately-2%. Further, we find that a negative Decision by the European Commission results in a cumulative average abnormal return of about-3.3%. Overall, the fine accounts for a relatively small fraction of this loss in value. Finally, if the Court annuls or reduces the fine, this has a positive (+2%) effect on the firm’s valuation. ∗A number of people helped us in various ways in this project. In particular, we

We model merger control procedures as a process of sequential acquisition of information in which... more We model merger control procedures as a process of sequential acquisition of information in which mergers can be cleared after a ?first phase of investigation. We fi?nd that the enforceability of clearance decisions at the end of the fi?rst phase is unattractive to the extent that it prevents the authorities to use their expectations as to whether evidence gathered in the fi?rst phase will be confi?rmed in the second phase. This deprives the ?first phase of its potential as an effective screening mechanism. We also fi?nd that when clearance decisions in the fi?rst phase are enforceable, a different (higher) standard in the fi?rst phase is only desirable when Phase I decisions are captured by merging parties (as opposed to complainants).

"Friesland Foods/Campina: a merger between two Dutch dairy cooperatives approved with a set ... more "Friesland Foods/Campina: a merger between two Dutch dairy cooperatives approved with a set of comprehensive remedies"* I. Introduction The Friesland Foods/Campinacase (M.5046), which concerned…

"The E.ON electricity cases: an antitrust decision with structural remedies"* I. Introd... more "The E.ON electricity cases: an antitrust decision with structural remedies"* I. Introduction On 26 November 2008 the Commission adopted a commitment decision addressed to E.ON AG for suspected…

(Still preliminary) This paper deals with the determinants of agents ’ acquisition of information... more (Still preliminary) This paper deals with the determinants of agents ’ acquisition of information. Our econometric evidence shows that the general index of Italian share-prices and the series of Italy’s financial newspaper sales are cointegrated, and the former series Granger-causes the latter, thereby giving support to the cognitive dissonance hypothesis: agents tend to buy the newspaper when share prices are high and not to buy it when share prices arelow. Instead,wedonotfind support for the hypothesis that the agents acquire information in order to trade in the stock-market: we find no relationship between quantities exchanged in the market and newspaper sales. ∗We are grateful to Armando Carcaterra, Claudio Mazzoli (Brainpower) and Hammad Nasar for their help with Italian stock-market data, to Sibilla Guzzetti (ADS) for help with

"Friesland Foods/Campina: a merger between two Dutch dairy cooperatives approved with a set ... more "Friesland Foods/Campina: a merger between two Dutch dairy cooperatives approved with a set of comprehensive remedies"* I. Introduction The Friesland Foods/Campinacase (M.5046), which concerned…

Seminaire Droit et Economie organise par la Revue Concurrences en partenariat avec Shearman & Ste... more Seminaire Droit et Economie organise par la Revue Concurrences en partenariat avec Shearman & Sterling et Compass Lexecon.

SSRN Electronic Journal, 2019

We set up a model to analyze the effects of mergers between sellers of complementary components w... more We set up a model to analyze the effects of mergers between sellers of complementary components where firms invest in compatibility and can engage in bundling. We consider the impact of merger on prices, investment and consumer surplus. We also analyse when the merged firm may have an incentive and ability to foreclose rivals. JEL-Codes: L130, L410.

SSRN Electronic Journal, 2015

We modify the UPP test of Farrell and Shapiro (2010) to take into account the possibility that a ... more We modify the UPP test of Farrell and Shapiro (2010) to take into account the possibility that a merger weakens (or eliminates) a vertical supply relationship. After deriving a general effect of the merger, we provide an example of simple estimation strategy when only prices, costs and market shares are available as a snapshot. JEL-codes: K210, L490.

SSRN Electronic Journal, 2021

Envelopment is an effective form of market entry that facilitates competition among platforms. Ne... more Envelopment is an effective form of market entry that facilitates competition among platforms. Nevertheless, many commentators have focused on the anticompetitive potential of envelopment, and some have argued for regulation of platforms because of that concern. These calls for regulation are not supported by robust formal analysis or comprehensive empirical evidence. We analyze a visible recent contribution by Condorelli and Padilla (2020a,b) and explain why the model that they put forward is not ripe for policy advice in relation to concerns with envelopment.

Competition Law & Policy Debate, 2020

We estimate, using standard event study techniques, the impact of various events in an antitrust ... more We estimate, using standard event study techniques, the impact of various events in an antitrust investigation on the firm's stockmarket value. The EC's surprise inspection of the firm's premises has a strong and statistically significant effect on the firm's share price, with its cu- mulative average abnormal return being approximately -2.2%. Further and somehow surprising we find that a negative Commission Decision results in a cumulative abnormal return of about -3%. Overall, the fine accounts for just a small part of this loss in value.

We model merger control procedures as a process of sequential acquisition of information and comp... more We model merger control procedures as a process of sequential acquisition of information and compare US and EU procedures. In the US, the authorities do not have to justify their decision to require further information (issue a second request), whereas in the EU, the authorities face a di_erent (enforceable) standard of proof in phase I relative to phase II. We _nd that in the absence of remedies, the US procedure is always superior in terms of expected consumer welfare. When we allow for remedies, we _nd that, compared to the US, merging parties in the EU have more scope to propose remedies in phase I that will preempt the authorities from uncovering unfavorable information in phase II, and this might reduce expected consumer welfare. However, the higher standard of proof in phase I can also in some circumstances act as a commitment not to accept remedies below some threshold and yield a higher expected consumer welfare in the EU. Our model also shows that for global mergers that h...

International Journal of Industrial Organization

International Journal of Industrial Organization

We set up a stylized oligopoly model of uncertain product innovation to analyze the effects of a ... more We set up a stylized oligopoly model of uncertain product innovation to analyze the effects of a merger on innovation incentives and on consumer surplus. The model incorporates two competitive channels for merger effects: the "price coordination" channel and the internalization of the "innovation externality". We solve the model numerically and find that price coordination between the two products of the merged firm tends to stimulate innovation, while internalization of the innovation externality depresses it. The latter effect is stronger in our simulations and, as a result, the merger leads to lower innovation incentives for the merged entity, absent cost efficiencies and knowledge spillovers. In our numerical analysis both overall innovation and consumer welfare fall after a merger.

Review of Industrial Organization

The Directorate General for Competition at the European Commission enforces competition law in th... more The Directorate General for Competition at the European Commission enforces competition law in the areas of antitrust, merger control, and state aids. This year's article provides first a general presentation of the role of the Chief Competition Economist's team and surveys the main achievements of the Directorate General for Competition over 2016/2017. The article then reviews the economic work undertaken in one merger case between Dow/DuPont, which raised & Tommaso Valletti

SSRN Electronic Journal

We set up a stylized oligopoly model of uncertain product innovation to analyze the effects of a ... more We set up a stylized oligopoly model of uncertain product innovation to analyze the effects of a merger on innovation incentives and on consumer surplus. The model incorporates two competitive channels for merger effects: the "price coordination" channel and the internalization of the "innovation externality". We solve the model numerically and find that price coordination between the two products of the merged firm tends to stimulate innovation, while internalization of the innovation externality depresses it. The latter effect is stronger in our simulations and, as a result, the merger leads to lower innovation incentives for the merged entity, absent cost efficiencies and knowledge spillovers. In our numerical analysis both overall innovation and consumer welfare fall after a merger.