B03: Consumer protection and competition policy

Competition policy and consumer protection are classical instruments to regulate product markets. In this project, we investigate the performance and design of regulatory policies aimed at improving consumer welfare and market efficiency. Our project consists of three work packages.

In the first work package, we develop methods that can be used to address applied questions pertaining to competition policy and consumer protection. One focus is on studying delegated agency problems where a regulator sets out approval criteria, and firms seek approval, for example, for a merger or to market a product. Another focus is on studying the foundations of oligopoly theory, with an emphasis on market power in differentiated-goods industries, as well as industries characterized by production in advance (“all-pay oligopolies”).

The second work package advances the literature on competition policy, most notably merger control. One goal is to develop a general framework for the analysis of merger remedies, which are frequently imposed in practice as pre-conditions for approving mergers. We also outline a theory of merger screens and investigate the long-run effects of merger policy on innovation incentives, especially in conjunction with patent policies. Moreover, we develop a framework to investigate the potential coordinated effects of mergers and common ownership. A further focus of the work package is the study of the (anti-) competitive effects of vertical restraints such as dual pricing.

The third work package involves the study of consumer protection policies, focusing on the interaction between consumer-protection measures and firms’ policy responses. Adopting an information-design approach, we investigate the regulation of information disclosure and labelling duties. We also study consumer protection in markets with boundedly rational consumers, especially in search markets. Finally, we analyze how firm-level policies that are aimed at dealing with intra-firm conflicts of interest affect consumer welfare and call for regulatory intervention.